Playing a spoilsport to the chest thumping by the Modi Government over country’s rising Gross Domestic Product (GDP) growth which stood at 7.4 and 8.2 percent for 2014-15 and 2015-16 respectively, the Reserve Bank of India (RBI) has released numbers painting a worrisome picture of growth of jobs in the country.
According to the latest report by KLEMS India database, a research project supported by the RBI, far from jobs being created employment in the country shrank by 0.2 percent and 0.1 percent in 2014-15 and 2015-16 respectively.
The country’s economy is facing a grave threat of joblessness contrary to the drum beating statements made by Prime Minister Modi on creating 2 crore jobs per year as per the statistics on Indian economy by the multinational data research initiative KLEMS [capital (K), labour (L), energy (E), material (M) and services (S)].
Joblessness and Distressed Sectors
The KLEMS report which evaluated economic data from 1981-82 to 2015-16, indicates that key employment generating sectors of the country suffered a major decline despite higher growth rates. In fact, since 2014-15, job creation saw a negative growth in three financial years during 2012-13 (-0.50 percent than previous year), 2014-15 (-0.16 percent than previous year) and 2015-16 (-0.08 percent than the previous year).
It was just a few months back that finance minister Arun Jaitley went on to praise India’s performance in the ‘Business Accessibility Index’ where the country jumped 30 places, but dismissing these claimseconomic experts are suggesting that the situation has in fact deteriorated since BJP took over so far as job creation is concerned.
Jayati Ghosh, Professor at Centre for Economics and Planning, Jawaharlal Nehru University criticised the government for reducing formal jobs and said that such a trend creates a negative multiplier effect in the economy. Professor Ghosh said, “India has never had a formalized workforce and regular jobs were occupied by only about four percent of all the workers in the country. Government’s both at the Centre and States have been reducing formal workforce since the last decade. This entails a slower economic growth because fewer workers have economic stability and decent salaries creating a vacuum in the demand in the rest of the economy as less will people are there to create effective demand for the produced goods.”
The academician’s claim can be ascertained by the Government’s own data on shrinking permanent jobs. According to the Labour Bureau’s Quarterly Economic Survey’s (QES) 7th round report,released by the Ministry of Labour and Employment, regular jobs shrank to only 65 thousandbetween July 1st to October 1st, 2017 over 1.39 lakh between October 1st, 2016 to January 1st, 2017. It may be noted that the decrease in regular jobs during the mentioned period has been as high as 53.23 percent.
In fact, according to the Labour Bureau’s report, only 1.39 lakh new jobs were created in eight crucial sectors (which were included in the survey during the period of 1st July to 1st October, 2017-18),whereas during the last quarter of 2016-17 the figure was 1.85 lakh.
Negative job growth and agriculture
Shrinking jobs come in the wake of higher economic growth in recent years, which the government has often bragged about. Already stressed by demonetisation and shoddy implementation of Goods and Services Tax (GST), agricultural distress added to the worry substantially.
Since 2005, farm employment has been witnessing a declining trend, however, during 2013-14, 2014-15 and 2015-16 the decline was much steeper. And, 2015-16 and 2016-17 being drought years, agrarian productivity was negligible which in return reduced employment in the sector. As a result people were forced to migrate to urban areas in search of work.
Debunking governments’ employment generation schemes like Skill India, Make in India, Vijoo Krishnan, Joint Secretary of All India Kisan Sabha (AIKS) said that the government is neglecting its duty of employment generation. “On one hand, the government is pushing the agrarian community out of its profession and on the other hand it has failed to generate opportunities in other sectors”, he said.
“In spite of massive land acquisition, there is hardly any employment generating organisation investing in the country. One such example is the state of Odisha where 92 percent of acquired land under Special Economic Zone (SEZ) remains barren as no factory has been set up there”, lamented the farmer’s leader.
Instead of creating and promoting permanent jobs where employees get welfare benefits the government is moving towards contract based workforce model at a dangerous pace slashing concerns over social securities of the labour force.
The government has recently introduced the category of “fixed term employee” in the Schedule attached to the Industrial Establishment Standing Order’s Act, 1946. A closer look into the terms and conditions of the employment reveals that these employees can be kicked-out at any point of time during lean seasons or as and when their respective companies dub them as “extra burden”.
While ministers such as the Railway Minster Piyush Goyal see decrease in employment opportunities as a “good sign” pushing people into entrepreneurship, economists remain worried about shrinking jobs and the lax attitude of the government towards it terming such statements outright “stupid” to borrow from Prof Ghosh.