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UPA’s legacy: jobless growth

UPA’s legacy: jobless growth
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First Published: Sat, Jun 25 2011. 12 55 AM IST

Updated: Sat, Jun 25 2011. 12 55 AM IST
New Delhi: Key economic data released by the government on Friday shows that the first stint of the Congress-led United Progressive Alliance (UPA) generated a mere 400,000 jobs a year, compared with 12 million jobs annually during the tenure of the Bharatiya Janata Party (BJP)-led coalition, the National Democratic Alliance (NDA).
During the period 2004-05 to 2009-10, growth in the economy averaged 8.43%, delivering the politically uncomfortable message: jobless growth.
This revelation comes at a time when the UPA is battling charges of corruption during its second tenure and will lend fresh political ammunition to its critics. More importantly, it challenges the very notion of inclusive growth ideology that had helped elect the UPA to power in 2004.
The data released by the National Sample Survey Office (NSSO), the ministry of statistics, is part of the 66th round survey conducted between July 2009 and June 2010. NSSO conducts surveys on employment and unemployment. The last quinquennial survey was conducted between July 2004 and June 2005.
According to NSSO data, the employment rate has actually declined in the five-year period ended 2009-10 to 39.2% from 42% in 2004-05. In fact, the latest available employment rate is actually lower than the 39.7% reported in 1999-2000 by NSSO.
In other words, if the growth in population is factored out, there has been a decline in employment in absolute terms in the first tenure of the UPA. Since jobs are the most sure way of generating inclusive growth, the political implications of the employment data are apparent.
Using the NSSO employment statistics along with the Census of India population projections, it comes about that between 2004-05 and 2009-10, only 2 million jobs were added—compared with 55 million who joined the workforce aged between 15-59 years. The same calculation shows that between 1999-2000 and 2004-05, the economy generated 62 million jobs.
This is particularly ironic since the UPA is credited with changing the prevailing development paradigm by forcing a shift to an entitlement regime. Accordingly, it has legislated the Right to Education and the Right to Employment, and is now considering the Right to Food. The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), the social safety net of the UPA that guarantees 100 days employment a year for each rural household, is credited in ensuring the UPA a second tenure in office.
Mani Shankar Aiyar, a former Union minister and Rajya Sabha member from the Congress, held the government to task over the findings of NSSO. “I’m not least (bit) surprised. This single-minded chase after the GDP (gross domestic product) growth, without referring to all other dimensions of development, is the weakest and the most dangerous element of the reform process adopted over the last two decades. Accelerated growth is definitely leading to widening disparities, and this is dangerous for democracy and disruptive to development. As far as deputy chairman, Planning Commission (Montek Singh Ahluwalia), is concerned, the single biggest failure of the 11th Plan has been its failure to secure inclusive growth.”
No Congress spokesperson was available for comment.
The political opposition was quick to seize the moment and attacked the government.
“It is in tune with the neo-liberal trajectory of the economic reforms followed by the UPA government. That is why we have been forcing the government on schemes like MGNREGS and the tribal rights Act [Traditional Forest Dwellers (Recognition of Forest Rights) Act] to protect the marginal section from being more vulnerable,” said Sitaram Yechury, a Communist Party of India, Marxist politburo member.
The Left parties were allies, giving outside support, to the government in the first term of the UPA.
Arguing similarly, Yashwant Sinha, a senior BJP leader and former finance minister in the NDA government, said: “This government is nothing but a useless loudspeaker. One of the major issues during the NDA rule from 1999-2004 with which every Congress leader berated the NDA government in Parliament was employment generation. The then prime minister A.B. Vajpayee had announced we would generate 10 million jobs every year... Now the figures prove that.”
According to him, the impressive growth trend registered during the UPA regime was not leading to employment generation. “And this is because infrastructure development during the UPA regime has suffered heavily. All these sectors were where growth was neglected. Further, the government did not move a little finger in terms of labour reforms. Organized labour became a big impediment to creation of job opportunities, but the government did nothing about it.”
Liz Mathew and Ruhi Tewari contributed to this story.
Photograph by India Today/Getty Images
anil.p@livemint.com
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First Published: Sat, Jun 25 2011. 12 55 AM IST