The rising unemployment in India is an alarming reality. With the demographic transition resulting in more than 65% of the people in the working age from 2019-2029; it is necessary for the both the private as well as the public sector to continuously create new jobs to cater to the humongous youth supply. In spite of being a pivotal issue for a common man, the topic has largely been overshadowed by communal discourse in the electoral debates. But the recent leak of the 68th National Sample Survey Organisation’s (NSSO) Periodic Labour Force Survey (PLFS) has placed the topic of joblessness in the centre of political discourse again. Although the said NSSO report has not been resulted formally by the government, the report pegs the unemployment rate at 6.1% which is the highest rate in the last 45 years. With the general election ahead, the government is facing an all-out attack from the opposition parties for its absolute failure in providing jobs to the people. While the government is dismissing the report as a ‘draft one’; there is no doubting the glaring menace of joblessness which stares the youth in its face. Mounting the pressure on the government to provide jobs, various youth organisations have thronged Jantar Mantar in Delhi to call-for-action. In pure economic terms, the nation is witnessing what is called as the phenomenon of ‘Jobless Growth’ where the constant economic growth solely in terms of Gross Domestic Product (GDP) is being experienced without an adequate consequential increase in the employment creation. The article will dwell into the findings of the report along with the clarification given by the government. The reasons for this ‘Jobless Growth’ will also be covered in the article for presenting a comprehensive assessment of the reasons stated in the report.
Controversy over Findings of the Report
The latest data showing the overall unemployment rate to be 6.1% in the nation has been reflected in the 68th NSSO report of Periodic Labour Force Survey (PLFS). The data shows that while the unemployment rate in 2011-12 stood at 2.2% in 2011-12, it has mounted to 6.1% for the year 2017-18. The report also stated that the urban youth employment is worse at 18.7% for males and 27.2% for females. The main reasons for this dismal statistics are the limited avenues for manual labour in urban regions along-with huge inwards migration to the cities from the neighbouring rural areas in search of jobs. The report is also critical of the demonetisation and failure of monsoons in the recent years. The report claims that the demonetisation has led to loss of jobs especially in the informal sector with the daily wagers being the worst hit. While the report exposes the dismal reality of the times, it is indeed sad that the government has not released the report for public scrutiny.
A major political controversy over the report erupted when the two members of the National Statistical Commission (NSC) tasked with the responsibility of advising the government over the statistical collection quit over the non-release of the report by the government. The two members including the Chairman have alleged interference by the government in its work, despite it being an independent body. In an interview given to the Livemint.com, post his resignation, P.C. Mohanan, the former chairman of NSC dismissed the contention of the government that the report is only a ‘draft one’. He said that the procedure is that NSSO compiled the data and presented it before NSC for ratification. He clarified that the report has been cleared by the NSC on 5th December, 2018 but the government is halting its release. He also alleged that in November, 2018 when the GDP back series (to correct the GDP data in consonance with inflation and currency valuation) was to be released; the NITI Ayog was tasked with its release. The NSC should have been given the task to prepare GDP back series as it is an independent body, while the NITI Ayog is only a political body. He also stated that when the national policy for statistics was to be prepared, the government had not consulted the NSC in spite of it being the nodal advisory body on statistics in India. He therefore, decided to resign as it was the only option available to him to lodge his protest. It is indeed deplorable that the independence of National Statistics Commission has been seriously compromised by the present NDA government. With the resignation of the two members of the NSC, only two persons remain its members namely NITI Ayog Chief and Principle Secretary to the Department of Finance, both being ex-officio members. The suppression of the report has also been criticised by Kaushik Basu (former Chief Economist of the World Bank), he has said that the NSSO reports are amongst the most accurate data source on the topic of unemployment and its suppression by the government is very sad.
Prime Minister Modi’s Clarification
Ever since the publication of the NSSO report in the media, the Union government has been in the defensive trying to contain the damage it is likely to cause. After the report was leased in the media, the NITI Ayog said that the report was not final and only a ‘draft one’. But the former NSC Chairman had made it clear that the report has already been approved by the National Statistics Commission and the government is not making it public. When the PM’s Economic Advisor, Bibek Debroy was asked about the findings of the report, he said that the government will bring out a new report to clear the situation on employment. It is indeed ironic that while most of the eminent economists like Kaushik Basu have called NSSO report to be an accurate source of data, Bibek Debroy is challenging its validity. It would also amount to ‘Cooking the Books’ by the government if it brings out a new report on employment statistics with contrasting results.
The controversy as regards the mounting unemployment led to the Prime Minister responding to it in the Lok Sabha on 7th February, 2019 in his Motion of Thanks speech. He said that in the nation, there is no formal system for collecting job data. He also mentioned that in the Indian economy around 85-90% jobs are in the informal sector and there is no credible data in their regards. He only provided clarification as regards the 10% of the jobs which are in the formal sector. It is indeed pitiful that in spite of the fact that the majority of the jobs are in the informal sector, the government in its past four years of tenure has not put any system in place to collect its data. Considering the population of the country, 85% of the jobs would translate into around 60 crores of the people, and most of them are vulnerable as they exploited at the workplace as they are devoid of labour laws protection, casual leave, medical benefit or any social security cover in the old age. The Prime Minister then quoted the increase in the Employee Provident Fund (EPF) and National Pension Scheme (NPS) membership in the past four years to establish job creation. While the experts agree to the increase in the jobs, they also state that the increase in the EFP data could also be due to increase in coverage of the existing units as well and not necessarily due to new job creation. Modi said that around 6.25 lakh new professionals have filed income tax returns in the past 4 years. But this claim could not fully substantiate into the argument of new job creation and could be the result of increased tax coverage of the existing professionals. He also defended his government’s record in the informal sector by stating that in the past years more than one crore persons have attained skill development courses and more than 64 lakh new commercial vehicles have been registered. His reasoning that on every sale of commercial vehicle 5 persons would get employment is highly doubtful. The truth is that the educated youth with even Post Graduate degrees have been forced to drive trucks due to extreme paucity of jobs. An example of the recent recruitment for the post of sweeper in Lucknow could be cited. In the recruitment, the minimum qualification for the post was Matriculation, but due to the joblessness in the Indian economy, many Ph.D., lawyers, MBA and Masters Candidates have been forced to apply for the same.
Students’ Organisations protest at Jantar Mantar
The leakage of the NSSO report in the media citing the unemployment rate at 6.1%, the highest in the past 45 years has led to the various students’ organisations taking to the streets in the Capital to protest against the joblessness in India. It is indeed ironic that when the Prime Minister Modi was trying to defend his government on the issue of unemployment, around 1.5 lakhs students from all over the nation were protesting against the government and tried to march up to the Parliament. Citing the disappointment over the working of the Modi government, N Sai Balaji President Jawaharlal Nehru University Students Union said that the PM has ruined the future of the youth in the nation. He also demanded that around 10% of the GDP must be spent on education, gender and social justice. Various organisations like Youth for Swaraj, Young India Adhikar March and Yuva Hulla Bol have been protesting in Delhi over the rising unemployment in the nation. They alleged that in spite of the fact that around 4 lakh jobs is lying vacant in the Union Government, no effort has been made to fill them. They also accused the PM Modi of extreme insensitivity over the issue of joblessness.
The students criticised the infamous remark of PM Modi made in the TV interview on Zee News that “even a person selling pakoras and earning Rs.200 daily must be considered as employed”. The students said that when the minimum daily wage for even unskilled labour is around Rs.220, how could a person earning Rs.200/ day be considered as employed by the government? They reasoned that they have spent years for attaining academic qualifications of Masters, Bachelors, etc. and are not ready to sell pakoras for their livelihood. They demanded that Rs.18,000 unemployed allowance must be paid by the government to every educated youth till he is given a job. The government had constituted an Expert Committee under the Chairmanship of Anoop Satpathy to look into the issue of minimum wages. The Committee gave its report on 14th February, 2019 and has recommended doubling the minimum wages at Rs.375 per day. The committee said that the monthly minimum wages must be Rs.9,750 with the inflation index of July, 2018. While the recommendations of the committee are both timely as well as gratuitous, it is unlikely that they would be followed in the nation. The minimum wages is a ‘State Subject’ under the Schedule 7 of the Constitution of India and the states might not be inclined to raise the wages. The threat of demand push inflation with the sudden increase in wages is very realistic. But the workers cannot be condemned to work at wages below the subsistence levels in order to stop inflation. The solution would lie in the phased increase in the wages in order to ultimately commensurate with the recommendations of the expert committee.
Economic Remedies needed to increase Employment
While the discourse about the increased joblessness has largely been political in nature, the solution to the problem would lie with the economic remedies. India is at present witnessing a situation of ‘Jobless Growth’ where the economic development doesn’t lead to a consequent creation of jobs. Many European nations and even USA has been witnessing the same in the recent years. But the social security coverage in those nations ensures that the unemployed are not forced to starve. The large population of India is a major impediment in the goal of providing jobs to the people. The need of the hour is to seriously deliberate on a population control law. China had in the year 1979 able to enforce the ‘One Child Norm’ which has resulted in its spectacular growth due to reduced population pressure. Sadly, the topic of population control does not feature on the agenda on any political party. Another aspect of the joblessness has been the lack of spending of funds on education and vocational courses. The candidates with post graduate degrees also find it very difficult to secure a job in the private due to poor learning and technical levels. The emphasis should be on opening ‘quality’ educational institutions with robust curriculum and excellent teaching practises. The mere providing of skill training to one crore people without any stringent quality control would not increase their employability. The government is also investing a lot of funds of highways, railways and airports. The funds must be channelized towards the human resource development, rather than just concentrating on the physical capital. The government must fill the vacant seats immediately in view of rising unemployment in the nation. Mere jugglery of job data along with chicanery of the politicians would not solve the problem. If the government is able to pay heed to the demands of the people, only then the directive of inclusive development and social justice could be achieved.
ENS Economic Bureau. (2019, February 8). Crores of jobs created sys Narendra Modi, cities PF and tax data. The Indian Express. Retrieved from: https://indianexpress.com/article/india/crores-of-jobs-created-says-pm-narendra-modi-cites-pf-and-tax-data-5574641/
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PTI. (2019, January 31). NSSO report citing unemployment rate at 45 year high not final, says NITI Ayog. Business Today. Retrieved from: https://www.businesstoday.in/current/economy-politics/nsso-report-citing-unemployment-rate-at-45-year-high-not-final-says-niti-aayog/story/315753.html
PTI. (2019, February 7). Student Leaders say no talks of jobs in the Interim Budget. The Money Control. Retrieved from: https://www.moneycontrol.com/news/business/economy/student-leaders-say-no-talk-of-jobs-in-interim-budget-will-march-to-parliament-on-february-7-3489071.html
PTI. (2019, February 15). Expert Committee fixes need based National minimum Wage at Rs.375 per day. The Times of India. Retrieved from: https://timesofindia.indiatimes.com/business/india-business/expert-committee-fixes-need-based-national-minimum-wage-at-rs-375-per-day/articleshow/68000669.cms
Image Credit: The Telegraph
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