By Dr. Gyan Pathak
Prime Minister Narendra Modi’s claims made on Saturday, July 13 in Mumbai that around 8 crore new jobs have been created in the country in the last 3-4 years, that these figures have silenced those who spread false narrative about rising unemployment, and that the narrators of rising unemployment opposed investment, infrastructure, and the country’s development are now being exposed, are totally false.
First, because any definitive assertion on the basis of any provisional data is false. Since PM Narendra Modi has referred to the Reserve Bank of India’s (RBI) KLEMS report released on July 8 for his definitive assertion, it is bound to be false, since the report itself has said it is attempting a provisional estimate of productivity for the total economy for the first time for the financial year 2023-24 based on available information. The report itself in neither final, not perfect, since it is provision and only the first attempt.
Secondly, any extrapolation is not an actual position on the ground. RBI has routinely and traditionally been collecting KLEMS data and show historical number. The data are then extrapolated to know country’s productivity and employment levels. KLEMS stands for Capital, Labour, Energy, Material and Service.
Thirdly, the Labour Bureau of India under the Union Ministry of Labour and Employment is entrusted with the responsibility of collecting the actual data on employment and unemployment on the ground level, and we don’t have yet any reliable real time data. And why should people rely on the labour ministry’s data, if even the Labour Secretary does not rely on ministry’s own data to claim that over 2 crore people were getting jobs yearly since 2017-18? There is actually no such data as yet.
Fourthly, over 2 crore people had been getting jobs yearly since 2017-18, but remained a top secret, even for the Union Ministry of Labour and Employment, and the Prime Minister of India Narendra Modi until the midst of Lok Sabha election campaign when unprecedented rise of unemployment and jobless growth in the country became an election issue. Then suddenly, Union Labour Secretary Sumita Dawra, came to the rescue of the government and revealed the secret at CII Annual Business Summit 2024 on May 18 that 3 crore jobs were generated in 2022-23, and more than 11 crore in the last five years, and that the Reserve Bank of India would release the data in coming months. RBI has finally released the data, which revealed the secret of generation of over 2 crore jobs annually. Can such a huge employment generation could remain a secret for years, only to be revealed in paper, and not on the ground?
Fifthly, why exactly over 2crore? It might have a genesis in 2014 general election campaign of PM Narendra Modi when he first promised 1 crore jobs yearly after his government’s coming to power, and they promised “decent work for every hand” which was interpreted as 2 crore, since that much people enter India’s job market every year. The Opposition has always been demanding what happened to the promise of 2 crore jobs annually? PM Modi and his government never said before May 18, 2024 that here are 2 crore jobs we have been generating, because they had no such data.
Sixthly, the release of the data followed a Citigroup report in the earlier week that said India’s growth of close to even 7 per cent will only create 80 lakh to 90 lakh jobs yearly, that is shortfall of about 110 lakh to 120 lakh from about 2 crore needed. Prime Minister and Union Labour Minister has no direct labour data to substantiate their claims but they have been referring to the provisional extrapolated conclusion of the RBI, an institution that is not entrusted to conduct even employment and unemployment surveys, which are actually to be done by Labour Bureau under Union Ministry of Labour and Employment.
Even today on July 15, according to Centre for Monitoring Indian Economy (CMIE), a private institution collecting real time labour data, unemployment rate in India is 8.9 per cent on 30 day moving average basis. Union Ministry of Labour and Employment does not provide real time labour data, but always telling the people that private data are wrong. The Ministry provides urban jobs data quarterly but three months late, and rural data on yearly basis. Moreover, no PLFS data earlier has revealed the secret that India was providing over 2 crore jobs yearly since 2017-18.
After the Citigroup report, government of India had issued a rebuttal on July 8, which was ridiculous since it was vague, and it was based primarily on RBI’s KLEMS data released same day. In its rebuttal Union Ministry of Labour and Employment has said that Citigroup’s forecast that India will struggle to create sufficient opportunities even with a 7 per cent growth rate, fails to account for the comprehensive and positive employment data available from official sources such as PLFS and RBI’s KLEMS.
Seventhly, RBI’s data itself is questionable and springs up a mystery which will take time even for labour and data experts to decipher. In the year 2014-15, when Narendra Modi became prime minister of India, we have 471.46 million employed persons. Next year it increased to 472.04 million, which was an increase of only 0.58 per cent.
It should be recalled that in November 2016, PM Modi announced demonetisation, and millions of MSMEs were shut down, many reduced their operation to up to 75 per cent, and millions of people lost jobs, the RBI data shows that number of employed increased to 473.2 million, and increase or 1.2 per cent. Next year in 2017-18, when GST was introduced in July without preparation, many companies suffered and lakhs further lost jobs. The proof was given by NSSO data, which said that unemployment rate reached 6.1 per cent, highest in the 45 years. For the same year RBI data says employment increased by 1.8 per cent to 475 million. For the last year of second term of PM Modi, ie for 2018-19, RBI data on employment is shown to jump 17.6 per cent to 492.6 million. It should be recalled that Modi government had suppressed the unemployment data just before election, which was protested by National Statistics Commission members with resignation.
Employment data improved sharply thereafter, as the RBI data shows. During the first year of Modi’s second term, number of employed persons jumped 41.8 per cent to 534.4 million. This data is a mystery, and more mysterious employment data is for the next COVID-19 crisis year 2020-21. Almost the whole year entire economy was put on hold by lockdown and constraint measures, and there were considerable job losses people witnessed and suffered, and even the Union Ministry of Labour and Employment data showed job losses and very high level of unemployment. However, the RBI data shows a 31.2 per cent jump in employment to 565.6 million.
Event the first half year of 2021-22 was marked serious COVID-19 crisis, lockdowns and shut downs of the economy as constraint measures. People witnessed and suffered job losses in large numbers and Union Ministry of Labour and Employment data shows it, however RBI data shows a 11.9 per cent jump in employment to 577.5 million. For 2022-22, the data shows in increase of 19.2 per cent to 596.7 per cent employment, and in the last year of the second term of PM Modi in 2023-24, that is in the election year, the provisional RBI data shows 46.6 per cent increase with total employment of 643.3 million.
How such a huge increase in employment remained a secret for the people and the government for year is a mystery, which needs to be deciphered to know whether these are really true.
Lastly, if we take the RBI data to be true, then employed persons must have earned huge money, which should have been reflected in either consumption or small savings, or else there might be huge wealth with the individuals. GDP data for 2023-24 shows that consumption level is still very low a 4 per cent. Household savings in India to GDP ratio has attained a four-decade low with higher debt burden. The gross financial savings to GDP ratio declined by 3 percentage points (7.3% to 5.3%) in 2022-23, and household physical investment to GDP ratio increased only by 0.3 percentage point (12.6% to 12.9%) during the same period. How such things could happen if over 2 crore people are getting jobs every year since 2017-18?
There are many such questions which need answers before we may believe on the RBI data and PM Narendra Modi’s claim. It was only in March 2024, the India Employment Report 2024 by International Labour Organisation (ILO) and the Institute for Human Development (IHD) had portrayed a grim picture on employment front and that too was based on government data. During the launch of the report Chief Economic Advisor of the government V Anantha Nageswaran had said that government can’t solve the unemployment problem which was criticised by the opposition and demanded government’s resignation if it can’t solve unemployment problem.
If we believe Modi’s claim of proving over 2 crore new jobs yearly, then the problem has been almost solved. However, we know by our experience that majority of families have unemployed people in their household. There is something fishy about the RBI data and PM Narendra Modi’s claim, and the Parliament of India must fix accountability in the coming budget session. (IPA Service)
US Envoy’s Angry Reaction To Modi-Putin Talks Is Undiplomatic, Unwarranted 