Jobs Conundrum and a Cacophony of Counter-Claims
India’s potential rests on the harvest of demographic dividend. But demography is not destiny. Are enough jobs being created? The answer depends on who is telling the story. Poor data collection and analysis has fuelled a cacophony of opinions. Why not ask techies to triangulate data govt spend, corp filings & GST returns for insights? A nation aspiring to $ 10 Trn GDP and advanced economy status can and must do better.
Shankkar Aiyar | The Third Eye | The New Indian Express | 14 Jul 2024
The potential of the India Story rests squarely on realising the demographic dividend. India is currently home to a population of over 143 crore or over 1.4 billion. It is estimated that over 68 percent of the population, that is over 950 million, fall in the working age cohort of 15 to 64. Indeed, India contributes more people to the growth in global working-age population than any other country. Demography is not destiny and realisation of the potential depends on fruitful employment for around 8 million who join the workforce every year.
The question is whether India is creating enough jobs. The answer depends on who is telling the story. The American theorist W Edwards Deming once observed that someone without data is just another person with an opinion. Deming, who helped the US government design population-scale sampling for census and labour statistics, may not have countenanced that data can morph into opinion. Yet, India’s fragmented data landscape has triggered a babel of competing opinions.
Last Friday, a transnational bank published a research report on the economy. The report observed that India would need to grow faster than 7 percent to create enough jobs for the young population and presented several ‘motherhood and apple pie’ suggestions. Unemployment and inflation represent the raw nerve of public mood and topped the list of concerns in the opinion polls fuelling rhetoric in #Elections2024. Unsurprisingly, the Congress unleashed a tweet fusillade as MP Jairam Ramesh leveraged the report, adding combustibles from the campaign.
On Monday, the BJP-led NDA government stepped in with its narrative to rebut the report and allegations from the Congress and other opposition parties. The Reserve Bank of India published the India KLEMS 2024 data on its website. The KLEMS database, which draws on multiple government sources, is used to analyse the deployment of capital (K), labour (L) energy (E), materials (M) and services (S) inputs to arrive at a picture of the economy. According to it, India added 46.7 million jobs in 2023–24. This is a huge jump from the 19.1 million created in 2022–23 and 11.9 million in 2021–22.
The data seems at odds with the rage and rhetoric witnessed in the electoral arena. The surge in the number of jobs created has left many experts baffled about alignment with other reports. Earlier this month, the NSS released the Annual Survey of Unincorporated Sector Enterprises 2022–23, which, when compared with ASUSE 2015–16, reveals a drop of over 5.4 million manufacturing jobs and in the total number of jobs in the unincorporated sector.
The surge shown by the KLEMS database raises questions for which answers are awaited. For instance, if there has been a rise in the number of jobs, why is private consumption scraping at 4 percent even as the GDP grew at 8-plus percent? Arguably, inflation affected consumption — which begs the question on the income strata and sectors where these jobs were created. The data is marked provisional and doesn’t offer a sectoral break-up for the new jobs.
Even as economists analysed the data, Congress president Mallikarjun Kharge tweeted to call out the government citing survey reports of the NSS, Azim Premji University, ILO, IIM Lucknow and CMIE on unemployment. Reports from Bharuch in Gujarat about a stampede as 1,800 youngsters queued up for 10 posts in a company — which rekindled scenes witnessed in Lucknow, where 48 lakh persons applied for 60,000 jobs — added fuel to the fire. Meanwhile, India Inc urged the government to focus on skills and jobs.
The jaw-jaw on jobs and cacophony of claims represent the gap in data collection, analysis and communication. While the bulk of the workforce is either dependent on agriculture or describes itself as self-employed, there is no disputing the diversified multi-sector engagement of labour. Must the government’s credibility and critical insights on the economy rest on incomplete data?
The economy is propelled by four factors — labour, land, capital and technology. The government, as per its reports, has ramped up capex from `5.6 lakh crore in 2014–15 to Rs 18.6 lakh crore in 2023–24. It has built 74 airports, added 30 km of roads every day, added 18 km of rail lines a day, and ramped up power generation capacity by over 180 GW. Surely every kilometre of road built or megawatt of power added results in economic activity demanding the availability of personnel?
Every company registered with the department of company affairs files annual returns — at least it is obliged to. Would they not share information on employees? The GST portal has data on returns filed across states down to the enterprise level. How difficult is it to compute how many jobs were created directly and indirectly across these sectors? Why not ask the departments and ministries to file annual reports on employment generated?
Economic activity in India is largely digitalised and it is globally lauded for its digital infrastructure. Why not call a grand challenge to derive the insights necessary to propel growth? India’s techies, who enable the digitalisation of global enterprises, can certainly script the algorithm to triangulate data on imports, exports, output, consumption, services and the gig economy to draw the contours of employment.
India is the fastest growing large economy. Must the credibility of its data be stranded between claims and counter-claims? A nation aspiring to touch the $10-trillion GDP mark to emerge as an advanced economy can and must do better.
Shankkar Aiyar, political economy analyst, is author of ‘Accidental India’, ‘Aadhaar: A Biometric History of India’s 12-Digit Revolution’ and ‘The Gated Republic –India’s Public Policy Failures and Private Solutions’.
You can email him at shankkar.aiyar@gmail.com and follow him on Twitter @ShankkarAiyar. This column was first published here. His previous columns can be found here.
