Prakash Javadekar’s claim and defence on India’s unemployment problem rings hollow from the word go
By playing down the unemployment problem, Javadekar hasn’t done nothing but what is expected of him
Javadekar said labour ministry gives only partial data on which unemployment figures should not be based
Between 2013 and 2015, there has been an 89 percent fall in direct recruitment in central govt ministries and departments
There is also a 90 percent decline in the direct recruitment of reserved category candidates in the central government jobs in 2015
According to the Centre for Monitoring Indian Economy, some 11 million jobs have been lost in 2018 alone
Union Human Resource Development (HRD) minister, Prakash Javadekar has been quoted as saying that the government provided enough job opportunities in the last five years and those who don’t work out of choice cannot be counted as unemployed.
Javadekar further said labour ministry gives only partial data on which unemployment figures should not be based. These comments come shortly after a series of reports highlighted disappointing trend on employment situation in the country, especially mounting job losses in the post-demonetisation period.
HRD Minister @PrakashJavdekar: Govt Has Provided Enough Job Opportunities In Last 5 Years
People Who Don't Work Out Of Choice, Cannot Be Considered Unemployed pic.twitter.com/FFHCNJeELW
— BTVI Live (@BTVI) January 15, 2019
Now, defending the government’s performance is the least a senior minister could do. By playing down the unemployment problem, Javadekar hasn’t done nothing but what is expected of him. There is hardly any surprise in his remarks. But his claims and justifications on employment/unemployment situation in the country deserve a fact-check, which will then tell us that minister’s hypothesis is far from the reality on the ground and is wrong for the following reasons:
1) The claim that the government has provided enough jobs for the youth in the past five years is highly questionable.
The number of government jobs has been falling over the years. Between 2013 and 2015, there has been an 89 percent fall in direct recruitment in central govt ministries and departments, according to data presented in Parliament. Total appointments made through direct recruitment have slid down from 1,51,841 in 2013, 1,26,261 in 2014 to 15,877 in 2015 which is a sharp decline of 89 percent as compared to the year 2013, according to the data presented in the House.
There is also a 90 percent decline in the direct recruitment of reserved category candidates in the central government jobs in the year 2015 as compared to 2013.
In fact, neither the government nor the private sector has generated enough jobs during this period.
The private sector has not received enough investments to set up new shops that could generate employment. The shift to more automated factories added to less requirement of jobs.
2) There have been massive job losses instead. According to the Centre for Monitoring Indian Economy, some 11 million (1.1 crore) jobs have been lost in 2018 alone. The CMIE report points out that the fall in employment began some 13 months back—in November 2017.
“Employment declined in each of the nine months between November 2017 and September 2018. Employment is estimated to have fallen by 10.3 million during this period. And, in the volatile last four months, it fell by another 2.2 million,” the report said.
3) It isn’t correct to dismiss the employment-unemployment survey from the labour bureau calling it a partial data. As of now, this is the best available survey that captures the employment trends in the country by surveying households.
For instance, for the 2015-16 survey, the ministry surveyed a total sample of 1,56,563 households has been covered with a break up of 88,783 households in the rural sector and 67,780 households in the urban sector. From the households covered, 7,81,793 members were inquired, out of which 4,48,254 respondents reside in rural households and rest 3,33,539 in urban households.
In the absence of better payroll data, this remains the best indicator available. And that doesn’t tell us a promising story yet. A Business Standard report on 2016-17 Labour Bureau's Sixth Annual Employment-Unemployment Survey shows that unemployment in India rose to a four-year high in 2016-17 at 3.9 percent as against 3.7 percent in 2015-16 and 3.4 percent in 2013-14.
Assuming the findings of this report is true (the government hasn’t released the data yet), we have a serious problem in hand. It confirms the fears that note ban indeed took the breath out of cash-intensive industries and forced several small shops to shut down.
4) It is even more incorrect to say on the part of the minister that unemployment data is an overstatement of the actual problem since those people who don’t work out of choice can’t be counted unemployed. To begin with, unemployment is a situation when those who are willing to work and skilled to work don’t get enough opportunities, which is the case here.
Millions of educated youngsters are entering the job market every month and there aren’t enough jobs. Unlike the minister seems to suggest, India doesn’t have too many in its population who ‘don’t work out of choice’.
There is plenty of evidence around to prove this. In August last year, some 93,000 candidates, including 3,700 PhD holders, applying for peon jobs in Uttar Pradesh made headlines. What does this mean? India is stepping into a zone where there is an oversupply of qualified youngsters but not enough jobs to accommodate them.
Post-demonetisation, which broke the back of many cash-intensive industries, there was at least a 60 percent spike in people rushing for NREGA jobs. All this shows, the problem of big unemployment figures is not due to people who don’t work out of choice but eligible people who aren’t getting any jobs.
To sum up, India’s unemployment problem is real and present. It is not a fictional story. An even bigger problem is when the ruling government pretends that the problem doesn’t exist and start doubting the quality of even the labour ministry surveys.
The government can’t escape the onus of employment creation particularly when some of its experimental policies such as the harebrained demonetisation added to job woes. This fact is supported by the findings of the recent NBER working paper co-authored by Gabriel Chodorow-Reich, Gita Gopinath, Prachi Mishra, and Abhinav Narayanan that showed demonetisation indeed lowered the GDP (gross domestic product (GDP) growth by at least 2 percent in the near-term post-demonetisation.The least this government could do is to admit the problem and work on a resolution plan.
To keep watching India’s No. 1 English Business News Channel – CNBC-TV18, call your Cable or DTH Operator and ask for the Colors Family Pack (inclusive of 24 channels), available for Rs. 35/- per month, or subscribe to the channel for Rs. 4/- per day.
To keep watching the Leader in Global Market & Business News – CNBC-TV18 Prime HD, call your Cable or DTH Operator and ask for the Colors Family HD Pack (inclusive of 25 channels), available for Rs. 50/- per month, or subscribe to the channel for Rs. 1/- per day.