Debate on job creation intensifies ahead of first full budget of Modi 3.0 government

As the first full budget of the Modi 3.0 government approaches on July 23, a heated debate has erupted on the issue of employment generation. Economists are divided on the interpretation of publicly available data on how effectively the country has addressed unemployment.

While some economists, using government and RBI data, argue that India has performed well in job creation over the past decade, others argue that official employment data mainly reflects the creation of “formal jobs” rather than the past few years. Shows increased opportunities in agriculture over the years. With regular salary”

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unemployed development

This comes at a time when the RBI has recently raised the growth projection for the economy for 2024-25 to 7.2 per cent from 7 per cent earlier. While critics are quick to claim that India is experiencing “jobless growth”, the government has cited EPFO ​​data to buttress the point that job creation has increased in the last five years.

RBI said on Monday that employment in the economy in the financial year 2024… For the financial year ending March 31, 2024 The total rose by 46.7 million to 643.3 million, from 596.7 million a year earlier.

low productivity jobs

Bank of Baroda chief economist Madan Sabnavis said one has to accept the data given by the government and RBI rather than relying on private agency data dissemination. “The conclusion I draw is that there has been job creation, the numbers have increased but there has been job creation in low productivity sectors like agriculture, construction and trade,” he said.

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This is a clear indication that policies need to focus on education and making people better skilled so that they can move into higher productive jobs.

Sabnavis underlined that the share of manufacturing in employment has declined while that of low-productivity sectors like agriculture has increased.

However, there is a strong contradictory view that India has actually performed well in employment generation.

problem hidden

Former Chief Statistician of India TCA Ananth said that the country has certainly performed better on the employment generation front in the last decade. “I do not agree with the notion that the official figures released are hiding India’s job problem. This is because the official data also includes EPFO ​​data. For the first time, official data is showing an increase in the workforce participation rate (WPR), ”he said

“So those who were earlier saying the decline in WPR was a sign of India not providing employment to everyone, are now saying that these people are working but they are not getting good jobs. The story has changed,” said Anant. business Line.

The essence of the increased WPR is that more and more people are working in a place where the ILO wants to define “work”.

“We are creating employment opportunities on a large scale. Relative to our own history, we are in a much better position today in job creation than in the last fifteen years (since 2009), he said.

“Certainly between 2019 and 2024 (except the Covid years) we did a good job, but in 2014-19 we bottomed out in job creation and stopped for some time. The disruption in the initial year of GST implementation caused considerable disruption to economic activity. Covid was a big letdown. Even in terms of Covid, we have done a good job.

Anant said that the quality aspect of jobs is jobs. However the problem with job quality is that India does not have good data on “job quality” before 2016-17 and hence, this would only be an estimate on the quality of jobs created with respect to the past.

Earlier this week, Labor Department data showed that 20 million new jobs have been created each year since 2017/18, which contradicts a Citibank report which said that since 2012 Only 8.8 million jobs were added every year.