Government spends Rs 47 Trillion, is the biggest spender, investor, industrial house and service provider. How difficult would it be to map the number of jobs created per crore of expenditure?
By Shankkar Aiyar | Published: 14th May 2017 04:00 AM |
Are jobs being created in India? The answer varies with the basis — intuition, assumptions, estimations, surveys and forecasts. The popular perception is that not enough jobs are being created. This rings true to reports of huge number of engineers, PhDs applying for low-pay/low-skill jobs, by the continued presence of half the workforce on farms, the pockets of job seekers visible in casual labour marts in urban metros.
Empirical data, which is often dated, suggests a gap between the 10 million-odd persons joining the workforce and the number of jobs created as per government reports. The counter-argument often rests on the narrative about jobs created by new businesses, including self-employment in the share economy. Those running job portals and staffing firms present anecdotes that suggest lack of takers where jobs are created and lack of jobs where there are takers. There is also the critical mismatch of skills and vacancies.
Obviously there are no clear answers on whether jobs are being created. The thumb rule to remember is that absence of evidence is not evidence of absence. Much of this fuzziness is caused by the fog of inadequate information.
Earlier this month, Prime Minister Narendra Modi asked the Niti Aayog to set up a Task Force headed by Vice-Chairman Arvind Panagariya. The mandate of the Task Force is to evolve a methodology to generate timely and reliable employment data.
The creation of the Task Force is a laudable idea. Better data will inform draft of policy and enable comprehension of the size of the economy, income levels and how informal is the informal economy. The Task Force is faced with a daunting task — it has to map a workforce of over 470 million, aggregate information that is dis aggregated across spatial, sectoral, gender, social, formal and informal landscape.
Currently India is informed about the state of employment by reports of the National Sample Survey Office, annual surveys by the Labour Bureau since 2010, and forecasts and estimates by the Chambers of Industry and Trade. The picture that is presented is drawn on the basis of recorded data from wage rolls/EPF membership and from assimilation of responses from surveys. There is no disputing the value of the exercise and the data generated.
The question is whether the economy and thereby creation of employment can be mapped using a parallel and alternate methodology. The question is driven by a reality about the Indian economy. The government — Centre and states — is the biggest spender in the economy; between them the Centre and States spent over Rs 47 trillion or Rs 47 lakh crore. The government — Centre and states — is the biggest provider of education and health with a spend of roughly Rs 10 trillion or Rs 10 lakh crore. The Government of India is the biggest industrial house in the country owning 234 operating public sector enterprises.
How many jobs is the government creating and sustaining? What India needs is to deploy available capabilities to leverage big data. Why not start with mapping government expenditure down to the last mile and track job creation? How about assessing job created per crore of government spend? The Modi Government, this year, will be spending Rs 2.4 lakh crore on the transportation sector, including Rs 64,900 crore on roads and Rs 55,000 crore on railways.
Finance Minister Arun Jaitley declared in his budget speech that the total spend on the rural sector (including Centre, States and bank-linkages) would be nearly Rs 3 lakh crore. The government — Centre and States — is the biggest spender on public works; and issuer of contracts for rural roads, highways, ports, railways besides airports. Add to this list municipal corporations, municipal councils and cantonment boards which issue their own tenders and contracts for building infrastructure.
The agenda for the year includes new railway lines, construction of ports, airports, 17 km of highways per day, 133 km of rural roads per day, NABARD-funded irrigation projects, smart city projects and rural electrification.Add the works undertaken by public sector enterprises, expansion of financial inclusion. Surely it cannot be beyond the capacity of the government to estimate by spend and present employment generated by each of the works.
This template can form the basis for a linkage with the private sector. Thanks to GST, production and consumption data will enable mapping of job creation in the private sector — it will take some tweaking but the moolah flows will enable interpretation. And this could be beefed up by surveys. What is critical is for the government is to set up the template.
Inexplicably, government narrative is replete with need for job creation — there is much mention of employment generation, 13 times in the 2017 Budget. Rarely if ever governments present an estimate — the number of jobs that could be created directly and indirectly in the formal sector or the informal sector. What if every year, governments at the Centre and in the States were to provide first the potential for jobs along with the expenditure and next year declare whether the outlay translated into outcomes.
It is not enough to declare the potential. How about following the money? Nothing in government goes unrecorded. The travelogue of every rupee spent by the Centre and the States can be traced and recorded. Imagine if the government could geo tag the expenditure right down to the district and to the village and make it available at village panchayats and on an app on the phone. It is possible, and it is being done by governments elsewhere.
Imagine making this information available to a young graduate in Kuvalaikal, in Thanjavur in Tamil Nadu or in Umri in Bhind in Madhya Pradesh — be it a teacher, a nurse or a techie. It will also enable social audit and curb delays and cost escalation.
What governments present every year is a statement of intent. What India needs really is a quarterly statement of outcomes, leveraging of big data to drill right down to the last mile to establish connectivity between the government and the taxpayer.
What is needed is facility for citizens to fact-check the promises made by governments with the outcomes for performance. The data will enable mapping of job creation, transparency, and of course, propel good governance.
Think about it.
Shankkar Aiyar is the author of Accidental India: A History of the Nation’s Passage through Crisis and Change