Modi will do well if he keeps in mind that jobless growth became UPA’s Achilles heel
Employment and job creation may not be the strongest point of this government and certainly not a talking point. Its track record in generating jobs over the last three years remains a chimera.
Prime minister Narendra Modi seems to have realised this huge gap in the delivery vis-à-vis promise of creating 10 million jobs in the run up to Lok Sabha elections in 2019. This has triggered a review of the jobs scenario to enable the government to adopt some sort of a mid-course correction of its policy formulation before Modi gets ready to face the electorate again in 2019.
While the sweepstakes are huge for Modi in person and the ruling BJP, there’s no empirical data to prove the claims of treasury benches that no productive jobs have been created which are commensurate with the over seven per cent annual GDP growth reported for the last three years.
Jobless growth turned out to be the Achilles heel for the erstwhile United Progressive Alliance regime during their 10-year regime. Modi will do well in taking the market indications very seriously on prevailing ‘jobless growth’ at the review this Sunday.
BJP’s claims of 60-65 per cent mudra loans worth over Rs 7.5 lakh crore disbursed to small businesses translated to more than six crore jobs is subject to public scrutiny. There’s no scientific data that supports this claim. For instance, the last comprehensive survey done in 2012 by NSSO and CSO reflected measly three per cent cumulative jobs growth during 2004-12 when UPA was in power. After that, there’s hardly any rounded data to support the BJP bosses unverified excessive claims.
On the contrary, the 2016-17 economic survey admitted that job growth was sluggish. Based on the labour ministry’s unemployment and employment survey reports, the unemployment rate was on a steady rise beyond five per cent annually in the last two years.
As per official data, six major sectors like manufacturing, trade, construction, health, education, information technology, transportation, hotels and restaurants added 641,000 jobs during July 2014–December 2016. This does not include the jobs created during January-March 2016 for which the data was not available. However, demo demolished jobs in the unorganised sector as many daily wagers were laid off, this has been corroborated by the labour ministry’s own statistics.
ManpowerGroup Employment Outlook Survey released a few days back pointed to slow hiring activity across sectors for the sixth quarter in a sequence. The survey based on 4,910 major employers in the country, did not report any optimism in the current quarter as well. Sharp decreases expected in hiring at 28 and 26 per cent across sectors like services and manufacturing during July-September 2017 send out ominous signals for the Modi government. Jobs outlook in particular seem to be weak or in deceleration mode across sectors like finance, insurance, real estate, transportation, utilities, mining and construction.
But, there may be a ray of truth in Niti Aayog’s argument that most of the jobs and hiring that happened in the informal sector and small businesses may not have been captured to present a more comprehensive picture. Its vice chairman Arvind Pangariya had not only discounted the labour ministry data but also offered an alternative formulation for capturing the work opportunities created on a wider matrix. While investing in jobs data collection was required urgently, the government can still depend on EPFO and ESIC inputs to capture a larger picture.
Most frustrating is that the jobs scenario continues to be bleak notwithstanding over
$62 billion foreign direct investment inflows, continued investments by portfolio investors in stock markets and front-ending of public investments.
Unless corrective measures are taken on a war footing to create productive and paying jobs, Modi is bound to lose the plot and the political narrative. Modi cannot under estimate peoples’ uneasiness and restlessness on unavailability of jobs.