Ruling NDA has outrightly rejected former Prime Minister Dr Manmohan Singh’s jibe at Modi government of having a period of growth that actually resulted in loss of jobs as against its promise of creating 2 crore new jobs every year. Addressing a gathering of young management graduates at Delhi School of Management, former Prime Minister Dr Manmohan Singh Sunday said that the growth under Prime Minister Narendra Modi has actually slipped into a ‘jobloss growth’ from a ‘jobless growth’.
“The jobless growth slipping into job-loss growth, together with rural indebtedness and urban chaos have made the growing aspirational youths restless,” the former Prime Minister told students at the event.
At the convocation ceremony, Dr Singh also asserted that the domestic challenges faced by the Indian economy were disconcertingly complex and devastating in its impact on the society.
The tussle over job numbers
Responding to former Prime Minister Dr Manmohan Singh’s charge of ‘Jobless growth slipping into Jobloss growth’, Rajeev Chandrasekhar, BJP leader and Rajya Sabha MP told Financial Express Online: “Let us be clear. Historically, there is no real job data in the government because of the dominance of informal and unorganized sector in overall jobs.
Citing a draft report of a survey conducted by NSSO in 2017-18, a news report has last month claimed that the unemployment rate was at 6.1% in the immediate aftermath of Demonetisation and GST, highest in over four decades. Opposition was quick to corner the government as the acting chairman of the country’s top statistical organisation PC Mohanan and another member JV Meenakshi resigned in protest, alleging that the government was suppressing the report in the run up to the Lok Sabha elections.
Prior to that, a report by the Centre for Monitoring Indian Economy (CMIE) had claimed that around 11 million jobs were lost in 2018 in the wake of twin shocks of demonetization and GST and rural areas were worst hit.
“It must be understood that NSSO data is a survey – A survey conducted at one point of time and is a snapshot of that period. That NSSO survey captured the period of churn, immediately after the Demonetisation and GST and even the government has admitted that post Demonetisation and post GST there were significant transitional issues with the informal sector,” said Rajeev Chandrasekhar, adding that NSSO survey did not capture all the important measures that the budget 2018 did to revitalise the MSMEs and informal sector.
Last two budgets aimed at bossting MSMEs, informal and agriculture sectors
“That survey did not capture the entire effect of 2018 budget and all the repairing that has been done to the informal sector and MSME,” said Rajeev Chandrasekhar, arguing that during the last five years of Modi govt, public spending in infra sector has been to the tune of Rs 10 lakh crore in roads, ports and railways. All of this is construction, creating downstream jobs and the formal sector through, as confirmed by real data (not surveys) in the the EPFO data, has expanded considerably.
According to the data gathered by Employees Provident Fund Organisation (EPFO), 7.32 lakh new employees were added in November 2018, and a total 73.50 lakh new subscribers were added in 15 months, between September 2017 and November 2018.
Responding to Dr Manmohan Singh’s jibe at NDA government, Rajeev Chandrasekhar said: “So on the one hand we have the real incontrovertible data through EPFO that confirms job expansion in formal sector and growth in formalization of parts of the informal sector and the other hand, as there is no real data on the informal sector so we are relying on the NSSO survey, which was done during transitioning of GST and Demonetisation.”
Huge growth in EPFO subscribers vs new job creation
Relying solely on EPFO data to capture the creation of new jobs has its own problems. Consistent growth in EPFO subscriber base has been mostly attributed to formalization of unorganised sector jobs rather than creation of new jobs. Demonetization and GST have certainly led to formalisation of Indian economy as Rajeev Chandrasekhar pointed out. But a massive growth in EPFO subscriber base is also attributed to the success of Prime Minister Narendra Modi’s Pradhan Mantri Rojgar Protsahan Yojana (PMRPY).
The scheme encouraged companies to hire workers on payroll as the government will bear the burden of paying employer’s part of EPF contribution with certain conditions. As a result, EPFO subscribers enrolled through PMRPY accounted for 74 lakh of total 79 lakh, almost 94% of the total new EPFO subscribers added between September 2017 to September 2018.
ALSO READ: Pulwama Terror Attack: Another serious lapse by Indian security forces
In the election year, the controversy over creation of new jobs versus jobless growth are not going to wither away anytime soon as Rajeev Chandrasekhar rightly put its: “It’s election season so expectedly some people will use survey data in a context that suits them.”
Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.
Source: Financial Express