The conflicting reports on job creation in India

Source: The post the conflicting reports on job creation in India has been created, based on the article “Living in denial about unemployment” published in “The Hindu” on 20th July 2024

UPSC Syllabus Topic: GS Paper3- Economy-employment

Context: The article discusses the conflicting reports on job creation in India. Prime Minister Modi cites a report suggesting significant job growth, which contrasts with other reports showing high unemployment. It highlights the challenges of accurately measuring employment due to outdated and incomplete data.

For details information on India’s labor market and employment situation read Article 1, Article 2, Article 3

What Are the Different Reports Saying About Employment in India?

1. Prime Minister Narendra Modi cited an RBI report claiming 8 crore jobs have been created recently, aiming to counter the opposition’s unemployment narrative.
2. State Bank of India (SBI) supported Modi’s claims with data showing 8.9 crore jobs in manufacturing and services from FY14-FY23.
3. Centre for Monitoring Indian Economy (CMIE) reported an increase in unemployment rate to 9.2% in June 2024, the highest in eight months, contradicting the government’s claims of significant employment growth.

Why Are There Conflicting Data on Employment?

1. Different Data Sources: Employment figures vary due to different sources like the RBI’s KLEMS data and the SBI report, which both use existing government surveys, versus CMIE’s independent assessments.
2. Definitions of Employment: Periodic Labour Force Survey (PLFS) counts individuals involved in any work activity as employed, while CMIE uses stricter criteria, considering only those earning an income.
3. Large Unorganized Sector: Accurate data collection is hindered by India’s vast unorganized sector, employing 94% of the workforce, where consistent and reliable data are hard to obtain.
4. Economic Shocks: Events like demonetization and the COVID-19 pandemic have disrupted the economy, making previous data sets unreliable for current conditions.

What Does the Ground Reality Suggest?

1. High Competition for Government Jobs: About 47 lakh applicants competed for 60,000 police positions in Uttar Pradesh, illustrating intense job scarcity.
2. Massive Number of Applicants for Few Positions: 1.25 crore aspirants applied for the Railway Recruitment Board exams, highlighting the desperation among job seekers.

3 Public Protests Over Employment Schemes: Protests in Bihar, Uttar Pradesh, and other states when the Agnipath scheme was announced in 2022 illustrate public dissatisfaction and concern regarding new employment policies.

What Should Be Done?

1. Acknowledge Data Gaps: The government should recognize and address the discrepancies in employment data, as suggested by the differences between PLFS and CMIE reports.
2. Update and Regularize Data Collection: It’s crucial to conduct more frequent and updated surveys, like the ASUSE survey annually, especially post-major economic events to ensure relevance.
3. Enhance Data Quality in the Unorganized Sector: Implementing systematic and continuous data collection methods for the vast unorganized sector could improve the accuracy of employment statistics.
4. Transparent Communication: Officials should transparently present employment data and its limitations, avoiding misinterpretations and misuse in policy making and public discussions.

Question for practice:

Discuss the reasons behind the conflicting reports on employment data in India.