LABOUR LAWS AMENDMENTS: Part 15

RISING UNEMPLOYMENT 

Cooking up numbers 

T.K. RAJALAKSHMI 

No amount of chicanery and juggling with numbers can show that the government has been able to generate decent employment at living wages to the majority of the the masses 

ON September 5, nearly two lakh people representing the industrial and agricultural working class of the country marched to the national capital with a very basic demand—a guarantee of decent livelihood. Sections of the law and order machinery in Delhi admitted to the media that they had not witnessed such a large gathering of people in recent months at least. 

Notwithstanding the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government’s claims of job growth, the overall situation on the employment front is dismal. This is corroborated by surveys other than the much-awaited employment-unemployment survey of the National Sample Survey O!ce (NSSO), the findings of which are yet to be made public. While surveys project an academic reality, the continuous protests in the past four years, by unorganised and organised sector workers on the one hand and by farmers and agricultural workers on the other, are symbolic of the anxiety on the ground. 

The government has been at pains to assert that employment has been generated or that jobs have been created, to the extent that it tried to pass o" heightened numbers of Employees’ Provident Fund subscribers as evidence of jobs having been created. Till date, the government has not been able to pinpoint the sectors where employment has grown by leaps and bounds or where new industries have been set up or employment has been generated on the scale claimed by it. In fact, job losses have characterised much of the tenure of the Narendra Modi-led government, first on account of demonetisation and then owing to the implementation of goods and services tax (GST). 

According to KLEMS India database, a project supported by the Reserve Bank of India (RBI), employment shrunk by 0.2 per cent in 2014-15 and 1 per cent in 2015-16. The Centre for Monitoring Indian Economy (CMIE), which does Consumer Pyramids household surveys (covering both unorganised and organised sectors), as against quarterly surveys of the Central Statistical Organisation (CSO), also found that employment estimates were at variance with gross domestic product (GDP) estimates. While GDP grew by 8.2 per cent, employment dipped by 1 per cent for a year–on-year comparison in the first quarter of 2018-19. There was a definite deceleration of employment in the unorganised sector. 

The CMIE also pointed out that employment “deteriorated” further in the second quarter of the present financial year. The decline has been on since November 2017. The number of persons employed in July this year was 1.4 per cent lower than the figure in July 2017. August too registered a decline. On the other hand, the number of persons joining the labour force has been going up, but this does not mean that they are getting what can be called regular, decent employment. 

The labour force, wrote Mahesh Vyas, managing director of CMIE, shrank after demonetisation, from 444 million in October 2016 (just before demonetisation on November 8) to 417 million in July 2017. From July onwards it started rising, reaching up to 428 million in August 2018. This was an indicator that the labour force was returning, but was it getting jobs was the question. The expanded labour force, wrote Vyas, was not getting jobs and as a consequence unemployment rate grew. The author drew a comparison with Kerala where migrant labour had to leave following the massive floods; comparatively, the exodus in the country was much higher during demonetisation. 

The CMIE report estimated that the unemployment rate had risen to 6.4 per cent in August which was higher than the 5.6 per cent in July and much higher than the 4.1 per cent in August 2017. It is quite likely, Vyas wrote, that the labour force and the labour participation rate will keep rising. Nine months after demonetisation, people had started coming back in the hope of finding jobs but they had di!culty getting absorbed. Su!cient jobs had not been generated. 

The latest available government data are Labour Bureau data. The quarterly survey by the Labour Bureau of eight key industries, from April 2016 until October 2017, showed that only 5.56 lakh jobs had been created. This was the latest establishment survey done by the Labour Bureau. In 2016, the Labour Bureau estimated that nearly 35 per cent of the workforce did not find work through the year or was forced to work in very low-paid casual employment. But in 2017, Labour Bureau data and methodology were questioned by pro- government economists in the NITI Aayog. 

In the absence of latest employment-unemployment data from the NSSO, there are those who believe that the Labour Bureau data adequately reflect and approximate reality. Santosh Mehrotra, professor of economics and Chairperson in the Centre for Informal Sector Labour Studies at Jawaharlal Nehru University, told Frontline that Labour Bureau data had a sample size larger than the NSSO’s. The questionnaire was almost similar. He said that just because the annual survey of the Labour Bureau was done at di"erent months of the year, it did not mean that they were not comparable with the NSSO. 

Mehrotra found the data of the Labour Bureau credible and said it more or less coincided with the findings of the CMIE’s own quarterly surveys. “There is an increase in the rate of the educated unemployed. The GDP growth rate by whatever measure is lower than what it was between 2004-05 and 2011-12. The connection of the state of the economy and jobs is thus. We had the rate of investment falling, credit o"-take falling, exports stagnating, and capacity utilisation until late 2017 falling (although they have recently picked up). So, I am not surprised that jobs have also been falling. At least, they are not growing at a rate close to the rate at which the young are entering the labour force. Since the young entrants are much better schooled than a decade ago, the rate of educated unemployed has risen sharply for the youth,” he said. 

There were attempts to mislead on employment figures. When the Employees’ Provident Fund Organisation (EPFO) released provisional estimates of payroll that showed that there were 3.11 million additions to the payrolls database in the six months from September 2017 to February 2018, it was projected as if new jobs had been created. NITI Aayog issued a press release where it said the data were “an eye opener and put an end to all speculations and conjectures regarding job creation in the economy”. Mahesh Vyas wrote in his column in May that these were not employment data—the growth in EPFO enrolments largely reflected the conversion of hitherto informally employed people into formal employment. The 60 million EPFO members accounted for less than 15 per cent of the total employment in the country, he wrote. 

The mystery behind the alleged jump in job creation got clearer when, following an amnesty scheme between January and June 2017, EPFO membership went up by 10 million in four months, from 38 million in March 2017 to 48 million in July 2017. The amnesty scheme announced by the Ministry of Labour and Employment was titled “Employees Enrolment Campaign 2017”, which gave an opportunity to employers to voluntarily come forward and declare details of all such employees who were entitled for PF membership between April 1, 2009 and December 2016 but who could not be enrolled for some reason. 

The declaration was to be made between January 1, 2017, and March 31, 2017. Employers were given incentives for this; they were exempt from paying damages as well as administrative charges. For the employee, his or her share of contribution, if not declared by the employer, would be waived. Clearly, there was a spurt in EPFO registrations. For the government, the declaration was enough; it did not seek further verification. This was nothing but formalisation of the labour force as argued by Vyas, Mehrotra and others. Vyas further explained in an article that the “EPFO monthly series was a lead indicator of the health of the economy but not an indicator of employment”. 

The BJP had, under the leadership of Narendra Modi, promised to create 10 million jobs if elected to power. But the government has not been filling its own vacancies. In February this year, Parliament was informed by Labour Minister Santosh Singh Gangwar that there were 412,752 vacant posts as of March 2016 in various government departments. It is estimated that nearly 17 million people enter the job market each year though placements from the exchanges have been fewer than 1 per cent. In the first nine months of 2015, for which data are available, it was 0.57 per cent only. There are an estimated 45 million job seekers registered in the country. Mehrotra said it was likely that jobs had been created but it was questionable whether they were increasing at the rate at which people were joining the workforce. 

“The government needs to be asked as to why they are withholding the NSSO survey on employment and unemployment. It is more than due. Statistical organisations used to be kept independent of the government. We cannot be certain the same principle applies with this government. Everyone is quoting different figures of employment. The Prime Minister in an interview to a magazine said 47 lakh jobs had been created, the same year the Pradhan Mantri Rozgaar Protsahan Yojana was announced. Finance Minister Arun Jaitley says that 70 lakh jobs have been created. There are varying figures for job generation from di"erent persons in the same government,” Tapan Sen, general secretary, Centre of Indian Trade Unions (CITU), said. On September 5, the CITU, along with peasant and agriculture worker organisations, organised a two-lakh-strong rally in the national capital with a common set of demands. These included decent regular employment and a minimum wage of not less than Rs.18,000 a month. Sen said that jobs in the Central government had declined consistently since 2014. The year the BJP-led NDA assumed o!ce, employee strength in the Central government was 33.28 lakh. It dipped to 33.06 lakh in 2015, 32.85 lakh in 2016 and 32.53 lakh in 2017. “Around 75,000 government jobs had just disappeared. The trend is continuing,” he said. 

In addition, from 16.91 lakh persons employed in the 330 public sector enterprises, the number had come down to 15.24 lakh in 2017, a loss of almost 1,67,000 jobs in about three years. In public sector banks, an increase was observed in employment; jobs went up from 7.25 lakh in 2014 to 9.47 lakh in 2015, but the sector saw reversals with 35,000 people in the clerical and subordinate categories losing their jobs. 

There have been predictions that on account of automation, artificial intelligence and robotics, the Indian banking sector may see huge job cuts in the coming years. The recent merger of three state-owned banks has also resulted in employees worrying about probable rationalisation of operations and downsizing. Trade unions pointed out that the previous merger of five associate banks with the State Bank of India had resulted in the closure of branches, increase in bad loans and reduction of staff. 

Similarly, Startup India also did not take o" in the manner it was expected. Many start-ups shut down too owing to either lack of funding or poor market response. A NASSCOM study of start-ups in 2017 found a very high mortality rate among them. The majority of start-ups “died” within 1.6-1.9 years of inception. The mortality rate of start-ups between the years 2012 and 2017 was between 20 and 25 per cent. The main reasons were scalability (failure to scale business, low market demand and sales, strong competition) and funding- and cash-related issues (inability to raise funds and a high cash-burn rate). In fact, 45 to 50 per cent died even before “seed stage funding”, stated the NASSCOM report. 

If Startup India was stuck, a similar fate awaited other government schemes like Skill India or Pradhan Mantri Kaushal Vikas Yojana where only 6.15 lakh, or 15 per cent, of the 41.3 lakh people trained in three years got placement. This was nowhere near the promise of generating 10 million jobs. Even the Mudra loans to the tune of Rs.4.6 lakh crore that were disbursed to 10.38 crore people averaged only around Rs.44,000 per person. 

The issue at hand is that no amount of number juggling and chicanery can show that the government has been able to generate decent employment at living wages to the majority of the masses.