Opinion | Jobs, labour market politics to dominate electoral discourse in 2019 Polls

Ordinarily economic variables such as jobs do not often enter into the election arena at the national level as primordial identities like caste, religion and nationalism play a significant role in India.

However, Prime Minister Narendra Modi right from the 2014 elections has set high expectations on the creation of jobs, and redistribution of black money by putting money into the accounts of common people (equity aspiration). 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.

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, and delaying the release of the results of the periodic labour force survey.

The leaked National Sample Survey Office (NSSO) report on jobs surely does not show the NDA rule 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.

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.

However, media reports on labour conflicts, the farmers’ protest marches, and several all-India strikes involving around 200 million workers should give an idea of the unrest in the 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.

Further, anecdotal 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.

The jobs debate is at best muddled. It is possible that jobs have been created given that economic activities of various types have been taking place—formal or informal. In an economy where labour supply is more than demand, people cannot remain unemployed, but how decently they are employed is the question to ask. 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.

K.R. Shyam Sundar is a labour economist and professor at XLRI, Jamshedpur.