By Ruma Dubey
This is a question often asked by foreign fund houses, brokers and investors, “what is India’s unemployment rate?”
And we always sheepishly say, “Its high but we have no data to tell us the rate.”
This answer gets an incredulous and baffled look – a country which tracks CPI, WPI, IIP, Fiscal deficit, GDP, forex kitty and so obsessed about growth – how come this macro data is simply not considered to be important enough?
Well, there is one small way in which we can save our face – Center for Monitoring Indian Economy (CMIE) provides a day-to-day unemployment data – it is displayed on the BSE website, right above the Sensex ‘up and down’ data – right on the masthead! And yet, few of us pay any attention to it.
So as per the latest data put out by CMIE, our unemployment rate is at 6.12%. CMIE is a very credible source of data and if they say, this is the rate, we believe it.
CMIE put out a report on the 27th of Feb’18 stating that the total number of unemployed is around 3.1 crore people – the highest since Oct’16. It had spiked up over 7% in last week of Feb and the best data in past couple of years – low of 3.4% in July’17. Nothing to cheer about that because this was the impact of demonetization where unemployed sat out of the workforce and focused their attention on building other skills to enable survival in a tougher economic climate.
Modi had promised in 2014 that he would create 2 crore jobs by 2019; that was a hugely aspirational target but it helped him win the elections. There is a study which says that in current fiscal, 5.9 lakh jobs were created every month till Nov’17 and extrapolating this to entire fiscal, some 70 to 71 lakh people would be employed by end of 31st March 2018. This data was calculated based on the memberships at Employees' Provident Fund Organisation (EPFO), Employees' State Insurance Corporation, General Provident Fund and National Pension System.
The Govt of India too calculates the rate of unemployment – the primary source being the National Sample Survey Organisation (NSSO). But its data was not really reliable as it does the survey every 5 years – it is only now that it has been mandated to do this every year.
Then there is the Labour Bureau, under the Ministry of Labour and Employment. Its sample size is very small as it covers very few sectors like textiles, metals, automobiles, gems and jewellery, transport, information technology/business process outsourcing, and mining – more about export oriented sectors. The “latest” survey is available up to September 2015.
The Central Statistics Office (CSO), the same agency that does the IIP also published very precious and in depth jobs data. It covers manufacturing – every unit which employs 10 or more with power and 20 or more without power. Once again, it’s outdated – this comes every five years with the “latest” being for 2013–14. The next one would be due in FY19.
There are many more Govt agencies which give data on jobs – EPFO, Department of Public Enterprises (DPE), Department of Industrial Policy and Promotion (DIPP), National Technical Manpower Information System (NTMIS). But none of them publish anything which gives us an accurate and current data on jobs. We wonder why this data, like IIP cannot be given monthly – the Govt did away with the Five years Planning Commission so why no work was done on this very important data collection in 5 years?
And it is this hotpotch collection of data and multiple sources which presented a wrong unemployment picture to Modi before he set the target of 2 crore jobs by 2019. A small example presented by CMIE – its estimations on unemployment at end of FY16 was 3.8 crore while the Labour Bureau’s data said 2.3 crore. In addition to that, CMIE stated that 4 crore were “marginally unemployed.” ‘Unemployed’ are those who were actively seeking jobs but could not get anything and ‘marginally unemployed’ are those who were not looking out for a job but were jobless. That means, at end of FY16, collectively, some 8 crore people were unemployed. And with about 20 lakh people getting added every month to the employment stock, all above the age of 14 years, means we do have a huge unemployment problem at hand.
We keep on harping about the great demographic advantage India enjoys but if this energy and intellect of the youth is not being harnessed, we could have a disaster on hand. Paul Krugman is absolutely right – if India does not create manufacturing jobs soon, our growth story could go phut!