Dismal failure on job front

BRP Bhaskar

Gulf Today

Prime Minister Narendra Modi strode into office in 2014 with the slogan of Development and promised the people achche din (good days). As he prepares to seek a new mandate, he is troubled by bad news from the economic front.

His predecessor, Manmohan Singh, had moved slowly on economic reforms despite pressure from the World Bank and international business interests. Modi pulled the plugs, and in the World Bank’s Ease of Doing Business index India jumped up from the 142nd place in 2014 to the 77th last year. 

The World Bank was pleased but some measures the government took hit the economy badly. One of them was introduction of Goods and Services Tax, on which the Manmohan Singh government had been dragging its feet. Another was demonetisation of currency notes of the value of Rs 1,000 and Rs 500.

In both cases, action was initiated without adequate preparations. This became evident when the government repeatedly revised GST rules and rates and offered various explanations for demonetisation. That the ill-planned measures had caused damage to the economy was known for some time, but the extent of the damage has come into view only now.

The unravelling began with the resignation of two non-official members of the National Statistical Commission, PC Mohanan and JV Meenakshi. Mohanan was also its acting chairman

The NSC, with a chairman and six members, two of them officials, was set up by the Manmohan Singh government in 2005 with a mandate to ensure data collection without bias so as to restore the people’s confidence in the figures released by the government from time to time.

The non-official members were unhappy with the Modi administration’s tweaking of figures, sometimes with retrospective effect, to show its own performance in a better light than that of its predecessor. When non-official members quit, the government did not fill the vacancies. After the departure of Mohanan and Meenakshi, it is just a rump with only two official members.

When Mohanan and Meenakshi left the NSC was holding on to the report of the first Periodic Labour Force Survey conducted by the National Sample Survey Organisation.

The Business Standard reported that the survey had shown that the unemployment rate had shot up from 2.2 per cent in 2011-12 to 6.1 per cent in 2017-18, the highest in 45 years.

It also revealed that joblessness was higher in urban areas (7.8 per cent) than in rural areas (5.3 per cent).

Jobless growth has been a feature of development in several countries in the age of globalisation. The most disturbing aspect of growth under the Modi dispensation has been loss of jobs in several sectors. Critics linked this directly to demonetisation and GST roll-out.

Congress President Rahul Gandhi said the unemployment rate was a national disaster. Modi had failed to keep his 2014 promise to create 20 million jobs and it was time for him to go, he added.

Government spokesmen immediately began a damage control exercise. Amitabh Kant, CEO of Niti Ayog, the policy formulating body of which the Prime Minister himself is the president, said that since the labour force survey had been conducted on the basis of a new methodology it would not be proper to compare its findings with earlier data.

The Prime Minister’s Economic Advisor, Bibek Debroy, indicated the government had plans to tweak the employment figures. He said the National Sample Survey Organisation would come up with a new report on employment which would show “a substantial increase” in jobs. 

Cornell University Professor of Economics Kaushik Basu, who is a former Chief Economic Advisor to the government of India and Chief Economist of the World Bank, quipped, “The government can hide data but not the truth.”

To add to the government’s worries, economic inequality is also on the rise.

In a report released ahead of last month’s World Economic Forum meeting at Davos, Oxfam, the international NGO, said, “India’s top 10 per cent of the population holds 71.4 per cent of the total national wealth. The contrast is even sharper for the top one per cent that holds 51.53 per cent of the national wealth, while the bottom 60 per cent, the majority of the population, own merely 4.8 per cent of the national wealth.”

Popular perception on issues like jobs and economic disparity is likely to be determined by felt experience rather than official statistics. 

In the budget presented in the Lok Sabha last week the government offered a number of sops to those hit by its schemes. Critics dubbed the budget the Bharatiya Janata Party’s election manifesto. --Gulf Today, February 5, 2019.