Mains Paper 3: Economic Development| Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
From UPSC perspective, the following things are important:
Prelims level:Various reports and survey on employment data
Mains level: Contradictions regarding employment data and why it should be an electoral issue.
A charter by major trade unions reflects discontent on issues of jobs, minimum wage. The promises of the past years have created a situation where labour market issues such as disparities in income and the controversial jobs crisis will figure hugely in the forthcoming elections.
Controversies regarding job market
- The controversies surrounding the jobs crisis largely arise out of two facts
- The administrative failure of the central government to design credible periodic labour force surveys in place of the then-existent quinquennial National Sample Survey data, whose most recent database pertains to 2011-12, as soon as the National Democratic Alliance (NDA) assumed power
- Delaying the release of the results of the periodic labour force survey.
Data And facts as reported by various reports
- The leaked National Sample Survey Office (NSSO) report on jobs surely does not show the government in glory as unemployment, especially unemployment of youth, has arguably peaked and reports of “cleaning” of the jobs data as was done with the gross domestic product (GDP) data have considerably weakened the historically credible statistical architecture in India.
- Various data sources such as the Employees Provident Fund Organisation (EPFO), MUDRA scheme on the one hand and private data sources like the Centre for Monitoring of Indian Economy database and the recently released CII report on jobs in the MSME sector have provided an often conflicting picture on jobs created during NDA rule.
Growth and jobs conundrum
- The arguments that growth cannot be unaccompanied by jobs or that if the job crisis were so acute there should have been major social unrest sound weak for two reasons.
- Jobless growth is not new in India (since the 1980s it has figured in the debate) and growth numbers itself are surrounded by doubts because of revisions.
- The government has effectively snuffed out official data on strikes and lockouts and hence no macro profile of labour unrest could be understood.
Unrest in labour market
- The major central trade unions have come up with a 43-point charter that reflects discontent on issues such as unemployment and minimum wage.
- The CII’s claim of jobs creation is hollow on two grounds, viz. they base the job growth in a small segment of the economy, i.e. MSMEs, and extrapolate the numbers to cover the entire workforce of around 450-500 million workers (including a huge agricultural sector) and make extrapolations of growth of employment of 13-15 millions jobs per annum during the last four years.
- Aanecdotal and research evidence on the adverse effects of demonetization and GST seem to challenge the findings of the CII survey—the Tamil Nadu government has admitted in June 2018 that close to 50,000 MSME firms shut shop in 2017-18.
Influencing Elecotral politics
- In an economy where labour supply is more than demand, people cannot remain unemployed.
- Election outcomes are difficult to gauge but the narrative based on primordial identities such as caste and religion is most likely to be moderated by economic controversy, perhaps for the first time in the electoral history of India.