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Sunday, January 20, 2019

WHERE ARE JOBS IN PUBLIC AND PRIVATE SECTORS Mr PRIME MINISTER?

By on Sunday, January 20, 2019

Despite being the world’s fastest-growing major economy, India’s employment rate declined from 43.5% in January 2016 to 40.6% in March 2018, a recent report by the credit ratings agency CARE states.
The growth rate has tapered. In financial year 2018, for instance, employment grew at a mere 3.8%, compared with 4.2% in the previous fiscal. India’s unemployment rate shot up to 7.4 per cent in December 2018. This is the highest unemployment rate we’ve seen in 15 months.
The rate has increased sharply from the 6.6 per cent clocked in November. The climb to 7.4 per cent also indicates that the small fall in the unemployment rate seen in November was possibly an aberration in a trend that indicates a steady increase in the unemployment rate. The 30-day moving average of the unemployment rate had climbed up much ahead by January 6 2018, to 7.8 per cent. The count of unemployed has been increasing steadily.
Over the year ended December 2018, it increased by a substantial 11 million. Correspondingly, the count of the employed is declining. In December 2018, an estimated 397 million were employed. This is nearly 11 million less than the employment estimate for December 2017.This is a very large fall in employment. Note that the sample of December 2018 is broadly the same as the sample of December 2017.
Therefore, the difference in employment is not because of a difference in the sample. In terms of employment prospects, beneficiaries of the 10 per cent reservation for economically weaker sections in the general category, which was passed in Parliament last week, will face a steadily shrinking jobs pool in the central government, Central Public Sector Enterprises (CPSEs) and even banks, official figures show.
The latest data compiled by the Department of Personnel and Training (DoPT) on recruitment over the last three years through the main agencies — Union Public Service Commission (UPSC), Staff Selection Commission (SSC), Railway Recruitment Board (RRB) — show a declining trend in selection and recruitment, from 1,13,524 cumulatively in FY2015 to 1,00,933 in FY2017.Separate data from the Ministry of Heavy Industries and Public Enterprises show that the number of employees in CPSEs declined from 16.91 lakh in FY2014 to 15.23 lakh in FY2017. But for a small increase in FY2017, there is a steady decline in the numbers over the last four years.

TABLE-1 RECRUITMENT THROUGH UPSC, SSC, RRB/RRC IN LAST THREE YEARS

YEAR
NUMBER OF UPSC
CANDIDATES
NUMBER OF SSC
CANDIDATES
NUMBER OF RRRB/RRCs
CANDIDATES
TOTAL
2014-15
8,272
58,066
47,186
1,13,524
2015-16
6,866
25,138
79,803
1,11,807
2016-17
5,735
68,880
26,318
1,00,933
SOURCE-DoPT
TABLE-2 NUMBER OF PERSONNEL EMPLOYED IN CENTRAL PUBLIC SECTOR ENTERPRISES (CPSEs)

YEARS

NUMBER OF EMPLOYEES(IN LAKH)
2013-14
16.91
2014-15
15.87
2015-16
15.21
2016-17
15.23
SOURCE-MINISTRY OF HEAVY INDUSTRIES AND PUBLIC ENTERPRISES TABLE-3 GROUPWISE DISTRIBUTION OF EMPLOYEES IN BANKING SECTOR
YEAR
OFFICERS
CLERKS
SUBORDINATES
2014-15
7,29,964
3,76,608
1,84,970
2015-16
7,71,064
3,61,531
1,68,339
2016-17
8,28,594
3,60,381
1,60,916
SOURCE- COMMERCIAL BANK RETURNS
However, if the number of contractual and casual workers were to be excluded the number of those employed by CPSEs was 11.31 lakh in FY2017 compared to 11.85 lakh in FY2016, a reduction in employee strength by 4.60 per cent.
The government does not maintain a centralised database on jobs created or employees retired. In the case of banks, RBI data show that while the total employment has increased by about 4.5 per cent, the hike was on account of the hiring of officers. Recruitment in the two other job categories namely, clerks and subordinate staff has gone down nearly 8 per cent between FY2015 and FY2017.

WHY PRIVATE SECTORS ARE NOT PRODUCING ENOUGH JOBS

A report from rating agency CARE, released in October 2018, revealed that India's employment scenario is not looking good. It said job growth in corporate India moderated to 3.8 % in fiscal year 2018, from 4.2 % in the previous fiscal and the problem is most severe with smaller companies.
The report, based on an analysis of over 1,600 corporates, said smaller companies with net sales of less than Rs. 500 crore have witnessed a contraction in employment growth, while larger companies with over Rs 500 crore sales had a positive employment growth in 2017-18.
This comes on the heels of GDP growth projections, both by global and domestic agencies, placing India at the top of the world growth chart and is giving us Goosebumps with the thought that once again India is set to beat China on growth rate. But the fact is GDP figures do not make much sense to the common man if there aren’t enough jobs to go around.
The problem is going to multiply manifold if the jobs are not generated with sufficient pace in smaller companies, as the CARE survey says because that's where the majority in the economy of 1.3 billion people are employed. The CARE figures confirm the fears of a jobless growth in the economy, which is a political setback for Narendra Modi who is set to seek the public's mandate in less than four months from now.
A decline in the job numbers would also give room to multiple questions--What happened to the famed start-up promotion our PM has been advocating from Day One, the Skill India campaign that intended to generate jobs, the numerous calls to foreign investors to put more money on the table on stalled projects to revive the economic momentum. The private investment scenario too doesn't look good.
Recently, economy monitoring agency, CMIE, said private sector investments continue to remain low. Logically, this has had an adverse impact on stalled projects, which according to CMIE is on the rise. Its data says Indian companies announced new projects worth Rs 1.49 lakh crore in the quarter ended September 2018, down 41% from the previous quarter, and 12% lower than in the same period last year.
If one looks deeper at the numbers, the problem is mainly in the private sector, which is refusing to put fresh money on the table. That is the root of unemployment because unless fresh money comes to the economy, the question of new jobs doesn’t have much relevance.
The fact is new projects aren’t taking place because investors aren’t too optimistic about the economic scenario on the ground. Crucial land, labour reforms are pending even now. The current situation, in a way, is reminiscent of UPA’s period of ‘jobless growth’ characterized by a phase of high GDP growth, but with no corresponding job creation on the ground. Critics pointed out then that unless the fruits of high economic growth reach the job seeker, the whole growth-talk is a farce.
 The displeasure on the ground on account of lack of jobs is a nightmare to any incumbent who is seeking a public mandate to return to office. Acknowledging the job problem is important, as one of Modi’s ministers did recently in the context of agitations in Maharashtra. But, many of the top ministers at the Centre continue to downplay the problem often picking up convenient data points that aren’t widely accepted. If not properly addressed, for a large economy like India, the dissent on the ground on rising unemployment can be unsettling. The tag of the world’s largest growing major economy may not be enough to calm job seekers.
UMA SHANKER SINGH IFS, PhD