RBI sees jobs as worry, but govt gropes in the dark

By 2020, India will have the world’s largest young workforce. We are quite close to hitting the deadline. For Prime Minister Narendra Modi-led government, employment growth has been a priority ever since it came to power in 2014. But, three-and-a-half years down the line where are we?

The Reserve Bank of India’s survey released just last week paints a near-gloomy picture. It says employment situation has been the biggest cause of worry for respondents of its survey with sentiment plunging further into the “pessimistic zone”. The outlook on employment has also weakened in the last two rounds of its survey conducted since June this year.

A the same period, the data released by Centre for Monitoring Indian Economy (CMIE), country’s premier independent consultant, says India’s urban unemployment rate in the week ended October 8 is 8.2%, the highest in the past 11 months. The CMIE also says that the rise in labour participation rate and the unemployment rate shows that labour is returning to the labour markets but it is not finding jobs. According to the agency, the fall in labour participation rate began soon after demonetisation.

A recent youth employment-unemployment survey has said that with rising education levels, unemployment rate has also gone up in the age group of 18-29.

India does not have reliable jobs data yet. Conventionally, the jobs data that comes from the labour bureau enterprise survey covers a minuscule percentage of the total employment. The National Sample Survey Organisation (NSSO) generates a comprehensive data base. But that comes with a lag. Sensing the problem, the government set up a task force headed by former Niti Aayog vice-chairman Arvind Panagariya to evolve a methodology to generate timely and reliable employment data. But this came only in May this year when the government had already moved into its fourth year.

Lack of jobs data

Panagariya in his recommendations suggested that the government conduct employment surveys more often and also suggested use of database of the vast GST network to arrive at reliable estimates of employed or unemployed. It suggested that a central facility on the lines of RBI should be created to collate data concerning employment from different ministries.

In addition, it also advocated for an increase in the frequency of household surveys. At present, the household survey is done every five years. He said it should be done every year.

Subsequently, in August, Panagariya quit the Niti Aayog midway his tenure and thereafter very little is in public domain about what happened to that task force and whether or not the government wishes to appoint a new head to that body.

We are now in October of 2017. Five months since the task force was set up, we are still crying about lack of good jobs data. On October 11, when the Chairman of newly set up Prime Minister’s Economic Advisory Council, Bibek Debroy was asked about job’s scenario, he merely said India does not have good jobs data.

“Whether we like it or not, we don’t have good data on employment. In a country like India, you cannot get good data on employment and jobs from enterprises. The labour bureau enterprise survey covers less than 1.5% of total employment. The last NSSO data is of 2011-12 only, the next set of data will not come before 2018,” he said.

Debroy has always been demanding the government to put in place a system for timely and reliable job data. But what happened to the Niti Aayog Task Force which was tasked to evolve a methodology to generate timely and reliable jobs data. Debroy may not have been a member of that task force but he was a member of Niti Aayog when the task force was created under its the then vice chairman.

He continues to be a member of Niti Aayog even now after taking over the charge of PMEAC.

After taking over the chair of PMEAC, Debroy has taken upon himself the task of recommending the Prime Minister “implementable solutions” to 10 problems. ‘Employment and job creation’ comes top on his priority list alongside ‘economic growth’. But the question is for a labour market as vast as India’s, how long should we confine ourselves only to data generation activities? India has a vast informal economy and according to estimates, informal sector accounts for close to 75% jobs.

The labour bureau survey confines itself to the organised sector. It is only expected out of the Debroy-led PMEAC to suggest how to generate better data and how soon to do it in order to capture the informal sector. Because, the deadline of 2020 may be more than two years away but the government may not have the luxury of time till then. An estimated 18 million people, who enter the work force every year, may give them time only till 2019, when India goes into elections.