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
