Employment grew by 13.9 mn in two years ended 1 Jan 2012, but women’s labour force participation rate fell
New Delhi: In what should be heartening news for the Congress-led United Progressive Alliance (UPA) ahead of elections, India has witnessed a dramatic turnaround in overall employment.
Employment grew by 13.9 million in the two years ended 1 January 2012, according to the 68th round of survey by the National Sample Survey Office (NSSO).
This is significant since it has come about in a period when the Indian economy slowed from a growth rate of 9.3% in 2010-11 to 6.2% in 2011-12 in the aftermath of the global economic crisis.
Employment growth in the five-year span ended 2009-10 was 1 million in a period when the economy expanded by an average of 9% per year, inviting the politically uncomfortable charge of jobless growth—especially since the previous five years, coinciding with the tenure of the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA), saw the economy create 60.1 million jobs.
In comparison, the ability of the economy to create jobs under the stewardship of the UPA is still a cause for worry—in seven years the economy has only generated 14.6 million jobs, with nearly 14 million accruing in the last two years.
The same is the case with the quality of jobs. Most of the jobs generated during the UPA’s tenure have been in the less desirable segment of casual labour.
Planning Commission data had earlier showed that most of the increase in job creation in the second half of the previous decade (between 2004-05 and 2009-10) was in construction while employment in the manufacturing sector actually fell.
The NSSO data reiterates the worrying trend about the diminishing presence of women in the workforce. Women’s labour force participation rate (LFPR or the proportion of labour force to total population) fell from 29.4% in 2004-05 to 23.3% in 2009-10 and then even lower to 22.5% in 2011-12.
If fewer women are joining the labour force, even fewer are being employed. The worker participation rate (WPR or workforce to population) fell from 28.7% in 2004-05 to 22.8% in 2009-10 and then even lower to 21.9% in 2011-12.
The initial political reaction was along predictable lines, with each grouping seeking to draw attention to their interpretation of the data. While the Congress party lauded the recovery in employment, the opposition dismissed the claims.
“One of the criticisms against the government was the growth it has achieved did not produce jobs," Congress spokesperson P.C. Chacko said. “This data shows that we are on the right track and it is a befitting reply to our critics. The jobs could be created because the policies supported investment in infrastructure and the employment generation mostly happened due to the activities in the construction field."
However, Brinda Karat, senior leader and politburo member of the Communist Party of India (Marxist) said, “This is job loss growth because the jobs in organized sector are not growing, and the contractualization and lack of protective condition of workers has become an intrinsic part of the Indian economy."
Similarly, the BJP was critical and claimed that failure to generate employment was one of the biggest failures of the UPA.
“This is a story in contrast," BJP spokesperson Prakash Javadekar said. “The way the NDA took growth forward with a pro-people policy, the UPA has made jobs a casualty."
Though the level of employment is far below the desired level and the quality of jobs is also questionable, it is a fact that in aggregate the outlook is not as bleak as it was two years ago.
“This data shows we are very much on track to meet the 12th Plan projections and we may even surpass them," economist and chairperson of the National Statistical Commission Pronab Sen said.
“The one percentage point reduction in the unemployment rate by current daily status approach is an indicator that while those entering the labour force may not all be getting jobs, workers are seeing lesser underemployment," Sen added.
Separately, NSSO also released household consumption expenditure data from the 68th round, which showed that consumption expenditure in 2011-12 was about 1.3 times that in 2009-10 across rural and urban areas.
Household monthly consumption expenditure data is used to estimate poverty by the Planning Commission.
After facing criticism for fixing the per capita, per day poverty line at ₹ 22.42 in rural areas and ₹ 28 in urban areas, as being too low, the government set up the committee on the methodology of arriving at the poverty line in May.
The committee, headed by chairman of the Prime Minister’s economic advisory council C.Rangarajan, was expected to submit its report in June, but has now sought additional time, said a senior government official who declined to be named.
Average monthly per capita consumption spending was around ₹ 1,430 for rural areas and about ₹ 2,630 for urban areas, a government statement said on Thursday.
Experts said the data showed that the consumption gap between urban and rural areas also seemed to have come down.
“Consumption expenditure in rural areas has grown faster annually than urban consumption expenditure in real terms," said Jawaharlal Nehru University professor Amitabh Kundu.
Liz Mathew, Anuja and Remya Nair contributed to this story.