Has Modi Govt Succeeded On the Jobs Front? It’s Not So Simple
The EPFO data only talks about the organised sector, leaving out the informal.
One of the biggest promises that Narendra Modi made during his campaign speeches in 2014 was that of employment generation. The party manifesto promised 25 crore jobs over 10 years. That is 2.5 crore jobs a year. In 2013, he had promised 1 crore jobs every year.
Cut to 2019, BJP’s official Twitter handle has tweeted an image, #YouthWithModi. The image details how the government expanded employment opportunities for the youth.
One of the claims made by the government is that it created 73.50 lakh jobs between September 2017 and November 2018. Another one says 1.4 crore new jobs were created between 2014-17.
Both these claims are misleading and here’s why.
EPFO Data Not Reliable
Apart from the fact that the figure projected is nothing close to the promised 2.5 crore jobs a year, it also ignores the discrepancies in the EPFO payroll data that seems to have been the source of information.
The EPFO data only talks about the organised sector, leaving out the informal. A firm with 20 employees comes under the gambit of EPFO, according to law.
So, if a firm with 19 employees adds one more employee, all 20 will be registered under EPFO, giving us the false impression that there has been an addition of 20 people to the task force.
Also, according to a report in Livemint, in 2017, GST, demonetisation and the amnesty scheme made many companies push for registration under EPFO, making the subscriber base 60 million in 2018 from 45 million a year before.
Sketchy Unemployment Data
One should also take into account the fact that most of India’s unemployment data is sketchy, and some are contradictory.
Modi had himself admitted in 2017 that there is a lack of data on jobs. For a government who won votes harping on the issue of unemployment, this itself seem a little weird.
The government also discontinued the annual employment surveys of Ministry of Labour and Employment in 2016 . Since then, the organisation conducts quarterly surveys for enterprises employing 10 or more workers.
Findings of Labour Bureau Quarterly Survey
The data from the Labour Bureau Quarterly Employment Survey shows that the rate of job creation in the formal sector has slowed dramatically since the last decade. According to a report in The Times Of India, the number of formal sector jobs created between 2014 and 2015 was less than 2.5 lakh.
On the contrary, between January 2010-2011, under UPA rule, the number of jobs created touched around 5.5 lakh, the highest in 7 years.
Between 2015 and 2016, there was a sharp decline in the number of jobs, with figures plunging below thousands.
Though the government managed to better the situation slightly, employment generation took a huge blow in 2016, after demonetisation, figures show. Until January 2017, the number of jobs created was less than 2.5 lakh.
The data further shows that the slowdown of job creation in the formal sector began in the last few years of UPA2 government and is continuing under the Modi government.
The Centre for Monitoring Indian Economy, a think tank that tracks business and economic data reports suggest that there has been a rise in unemployment and a serious job crisis.
While the unemployment rate in the country rose from 3.39 per cent in July 2017 to 6.23 per cent in March 2018, according to the CMIE data, the International Labour Organisation (ILO) has projected unemployment in India at 18.6 million in 2018, a little higher than 18.3 million in its 2017 report, reported Economic Times.
While the unclear data on employment provide space for political parties to throw around figures and claim that more jobs have been created, the reality is more complicated than that.
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