The great Indian job debate

The narrative of achhe din (good times) promised by the Modi government dwells a lot on the creation of jobs for the millions who are struggling. Yet another assessment of employment by the Centre for Monitoring Indian Economy (CMIE) has stated that India’s unemployment levels are at a 15-month high. “The unemployment rate increased to 6.1 per cent in February 2018. It was 5 per cent in January and less than 5 per cent in the preceding two months. The 6.1 per cent unemployment rate is, in fact, the highest monthly rate in the past 15 months,” wrote Mahesh Vyas, CEO, CMIE, in his report.

With barely a year to go before national elections, the debate rages on about the Modi’s government’s success in enhancing job creation across the country. In the last few months, the government has taken several steps under many programmes to ensure that job creation gathers momentum. Several studies and reports have been attempted to get a clear picture of how many jobs have been created or lost in the last four years under the government.

“The February data seems to suggest that there is a migration of people who had evinced no interest in working till recently to an expression of interest in joining the labour force. This migration is eloquent. It possibly holds a promise, no matter how small, of a turnaround in the economy somewhere,” Vyas writes.

Has this promise of a turnaround been triggered by the government programme to loan funds for small and medium enterprises? Another study by the Skoch Group seems to suggest so. The report though does not just look at payroll figures, but defines job as “a gainful vocation that enables” a livelihood. The reports have assessed the impact of job creation solely from the MUDRA scheme that offers easy credit to small businesses up to Rs 1 million per borrower. This credit effort led to a boost in employment generation. “Job creation has jumped three times between March 2016 to December 2017. Total 6.8 crore (68 million) jobs created till December 2017,” says the Skoch report.

A study that has been quoted extensively was done by Dr Pulak Ghosh, professor at the Indian Institute of Management (IIM) Bangalore and Dr Soumya Kanti Ghosh, Group Chief Economic Advisor, State Bank of India. The report has assessed payroll data to say that jobs are being created at a healthy pace. The study says, “Based on all estimates, payroll of 5.9 lakh (i.e. 7 million annual) is generated every month in India in current fiscal.”

Though positive, this study paints a partial picture of the employment situation in India. It recognises that jobs are  being created but also says that the labour survey done by the government is not adequate. The Labour Survey “fails to portray the extent of job growth. We need to change this,” the report argues. The authors have asked for the creation on a payroll report for authentic information on employment. “Research has revealed that the US non-farm payroll numbers have the most profound impact of all high frequency economic reports on not only the US, but global financial markets, too. We must endeavour to create a payroll report in India.”

Creating a deep rooted process of capturing employment data has been neglected for decades by various governments. Not only is the data delayed but is incomplete. The best data on labour is currently from 2011. But no government can create policy for the future on information that is more than seven years old. Especially in a time when technology is accelerating the need for new skills and talent. India has to worry not just about creating employment for new job seekers but also preparing those who are rapidly becoming unemployable as their skills become redundant in the age of 3D printing, blockchain and artificial intelligence.

As the 2019 elections come closer, the debate on job creation will become sharp and ugly. Those who want to criticise the Modi government will quote a set of figures and studies that seek to demonstrate a job crisis in the country. On the other hand, the government’s supporters will offer their own set of numbers carved from different databases to prove that not just jobs, but work and livelihood options have increased since 2014. With 90% of the workforce in the informal sector, it will be difficult to make arguments about formal job creation. In the new age, the app economy is creating steady incomes for millions in a way that government and academics have not been able to capture with certainty.

Irrefutable data can happen only when a strong, new system of capturing jobs and work is created. Until then debates on employment and livelihoods will throw up incomplete glimpses based on partial views of the situation. This is much like trying to count people in a large hall with a dim candle.

Since data on job creation is conflicting, the Modi government’s success will be felt by those who have improved their earnings or livelihoods — whether through formal employment, informal jobs, part time work or seasonal earnings. At this point, there are general positive indicators, but no clear picture. The turn-around in the economy is taking shape now and will be felt by job seekers much before anyone else. This will determine the final verdict on the success of the Modi government.

The writer is an economic analyst and author of Kranti Nation: India and The Fourth Industrial Revolution. Views expressed are personal.