Can Modi govt create 50 million jobs by 2020?
Union labour minister Bandaru Dattatreya’s claims of generating 10.25 million jobs every year inspire little confidence
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Union minister for labour and employment, Bandaru Dattatreya, said at a press conference this month that the Centre will ensure jobs for 50 million unemployed people in the country by 2020. This will be achieved via digital solutions and regular job fairs, the minister said.
This translates into an average requirement of over 10.25 million job creation annually between 2017 and 2020. Are such targets feasible? Statistics suggest otherwise.
Census data on workers is classified into three categories: main workers, marginal workers and non-workers.
Main workers are defined as those who have worked for more than six months in a year, marginal workers are those who have worked for less than six months in a year and non-workers comprise those who are either not looking for jobs or want to work but do not have a job.
As is obvious from these definitions, a significant section among marginal workers is likely to be looking for jobs. Total number of persons available for work among marginal workers and non-workers in 2011 census was more than 110 million.
Census data shows that share of marginal workers in the total population has increased between 2001 and 2011, which underlines the increasing ad-hocism in employment creation in the country. Even the share of those who are looking for jobs among non-workers has increased between the two census rounds.
A Plainfacts column published last year had shown that two out of every five persons above 60 years of age are still working in India. This is likely to further complicate the employment generation challenge in the days to come as a significant number of older cohorts are unlikely to quit their existing jobs and employing fresh entrants to the workforce would require creating new jobs.
If one were to take a more short-term view, government’s own statistics show that employment creation in India has suffered in the recent past. The labour bureau, which looks at quarterly statistics of employment generation in eight key sectors of the economy, shows that after witnessing a slight uptick of 0.5% in 2014, employment creation saw a slump of 67% in 2015.
In absolute numbers, increase in employment has declined by more than half between 2009 and 2014.
The latest report for the second quarter of 2016 by the Labour Bureau, shows that the eight sectors of manufacturing, construction, trade, transport, accommodation & restaurant, IT/ BPO, education and health, added merely 77,000 jobs in the April to June period. However, this should be viewed with caution as data collection on employment in India is ad-hoc and patchy.
Another evidence of poor employment generation can be seen from government figures on job creation under various government schemes. Barring the Mahatma Gandhi Rural Employment Guarantee Scheme, employment creation under programmes such as Prime Minister’s Employment Generation Programme, Pt. Deen Dayal Upadhayay Gramin Kaushalya Vikas Yojna etc. are very low.
To be sure, these numbers would not capture employment numbers in India’s vast informal sector. However, it is also true that demonetisation has adversely affected India’s non-farm employment in both rural and urban areas. Given these realities, it is imperative that the government focuses on reviving job creating private investment rather than make tall claims, which do not stand up to scrutiny.