The Modi government’s three-year celebrations
have been marred by the Opposition’s charges of jobless growth and a slowing
economy.
The
Opposition says job creation in recent times has been the slowest during the
NDA rule. The government has responded by setting up a task force led by
National Institution for Transforming India (Niti) Aayog vice-chairman Arvind
Panagariya to device a methodology for timely and reliable employment data.
In an
interview to HT, the 64-year-old former economics professor said the government
would ask the National Sample Survey Office to conduct an employment survey for “the real picture” on
job creation. Panagariya also spoke about the farm sector crisis as he brushed
aside claims that demonetisation had hammered the economy.
Edited
excerpts of the interview:
Q: The
government has spoken about the credibility of the employment data and you are
heading a task force to decide on new methodology to measure job creation in
the country. What is the problem with the present way to calculate jobs?
Employment
is calculated on the basis of two separate surveys. One is the household survey
by the National Sample Survey Office (NSSO) and other is establishment survey
of the labour bureau. The last NSSO survey was done in 2011-12 and the
establishment survey of the labour bureau was in 2015-16.
Most of
the present debate on job creation is on the establishment survey for eight
sectors that the labour bureau started after the global financial crisis in
which industries with more than 10 workers are surveyed every three months.
The data
is used to generate nation-wide numbers for these eight sectors and the problem
is with the multipliers used to convert the sample into national numbers. It is
not a random sample like (in) NSSO. The survey covered all the states only
after December 2016 and before that the data was for only 11 states. This
restricted sample covered 3-3.25 crore people in these sectors which was less
than 10% of the total 47 crore people estimated in the workforce. Even if we
take out 20-25% people in agriculture, the coverage is poor. You don’t know
what is happening to the industries having less than 10 persons.
Q: What
is the way ahead?
The best
and most extensive survey is by the NSSO as it is more reliable. Its frequency
is very low and we are going to propose to conduct the survey on annual basis
and for the urban areas, once in three months. This will help gauge the
employment created in a more reliable and realistic manner.
Q: Even
NSSO employment numbers are confusing and sometimes misleading. Someone working
even for a few days is considered employed.
The NSSO
methodology is similar to anywhere else in the world. We cannot change that.
The weekly NSSO figure is quite correct. It tells us that unemployment rate in
India was around 5-8% in 2011-12. The usual employment status (if a person is
working for a day in 183 days out of 365), which is often quoted, is more
liberal and gives unemployment rate of 2-3%. To end the confusion, we will
suggest that employment be measured through weekly status while providing usual
status.
Q:It is
being said that employment generation has been poor.
It is a
perception being given in the absence of good data. This perception is being
created as a large number of the workforce is in the unorganised sector – self
employed, small firms and self-owned enterprises. In that situation, as I have
been arguing, the employment and unemployment surveys are giving okay numbers.
Q: You
have been speaking about underemployment. What is that?
There has
been a lot of underemployment and it has been a long-standing problem. Making
perceptible dent in it will take a long time. I say that if there are two or
three people for the same job then there is underemployment. Like if you having
a plumbing problem and two or three persons are coming to resolve it, then it
is underemployment.
Q: Have
enough jobs been created by the NDA government? The information technology (IT)
sector is losing jobs.
One
general point is that we look at jobs that disappear and don’t look at jobs
that appear. IT people are saying they are increasing jobs. Saurabh Srivastava,
who was one of the founders of Nasscom, said that in the last three years six
lakh additional people have been employed by five largest IT firms alone. He
predicts that 25-30 lakh new jobs will be created in the next few years. There
are industries where jobs have not been created like construction, which has a
huge potential. The government is working on it. In labour-intensive industries
like textiles we have to create more jobs. With small investment in these
sectors, we can create a large number of jobs.
Q:
Despite the government focusing on farm sector revival, agriculture is in
distress. Farmers in Maharashtra and Madhya Pradesh are demanding a loan
waiver. Do you think loan-waiver is the road forward?
Farm loan
waiver is largely a political issue for the government and can provide relief.
In Uttar Pradesh, it was an election promise and the waiver given was for small
and marginal farmers. I think it is a balancing act for politics.
The
waiver can also create pervasive incentive for those who are paying back their
loans on time. On reviving the farm sector, we have made several suggestions
which include remunerative prices for crops, allowing farmers to directly sell
produce to consumers or corporate firms and deficiency payment to farmers in
case the produce price falls below the minimum support price. We have also
suggested precision farming, promoting micro-irrigation and opting for
high-value horticulture.
Q: Do you
think there was an impact of demonetisation on growth. Experts say the latest
GDP figures suggest so.
You have
to look at annual figure of 7.1% growth. It is higher than what all critics (of
demonetisation) said. I don’t think there was any major impact. There can be
marginal one, which cannot be measured quantitatively. In the early 1990s when
I said that we can grow at 7%, people thought I was crazy. In the present
world, 7.1% is high. Yes, we want to grow at 10%.
Q: High
growth is for corporates and economists but not for salaried people like me or
farmers in villages.
That is
not true. A recent report said salaries in IT sector had risen on an average by
about 5%. Remember inflation is very low. So, this wage increase in real terms
is good. I am happy to see that all of us are aspirational now. In my era, you
will see a decade pass by without any change. In Mayur Vihar (east Delhi), my
wife tells me that after every three weeks the place looks different. Lot is
happening in the infrastructure sector. But, we also have legacy sectors such
as construction, textile and steel, which are still struggling. Large parts of
the economy are flourishing.
Source : http://www.hindustantimes.com
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