Jobs – The Govt.’s Tangled Web

"Oh, what a tangled web we weave when at first we start to deceive" wrote Sir Walter Scott two centuries ago. The Modi govt.’s attempt to create data on non-existent jobs confirms this truth.

Since last year, an increasingly cornered govt. has been marshalling all kinds of half-baked ‘data’ to prove that it is well ahead in fulfilling its election promise of creating 1 crore jobs every year. One of these manufactured arguments is based on monthly enrolment data now being put out by the Employees’ Provident Fund Organisation (EPFO). There has been a jump in net EPFO enrolments, according to these numbers which – as per the govt. – shows a massive increase in jobs.

But these numbers are turning out to be a slippery bunch. For the period September 2017 to March 2018 the EPFO first announced a net increase of 39.35 lakh enrolments. This was on 25 May 2018. The figures were revised and declared again one month later (on 25 June) showing 34.4 lakh as the net addition. Finally, one more month later, on 20 July the figures were down further to 30.55 lakh! Same period but data is steadily dipping.

In all, in two months, the so called net new enrolment under EPFO for Sept 2017 to March 2018 is down by over 22% or nearly 9 lakh. This is the flip side of data jugglery – it can get out of hand even in the hands of adept spin-masters.

The reason for this messy data is that the govt. is trying to squeeze water out of rocks. EPFO enrolment is no measure of new employment created. It includes people who may be earlier working and have recently been covered under the EPF scheme. It includes transient workers. After the govt. announced that it would pay the employers’ share of EPF contributions there is uncertainty about whether new employees are being enrolled or already existing employees are now getting covered. Some have even raised doubts about whether any employee is being covered or the employers are just gobbling up the govt.’s share claiming new employees.

Whatever be the case, Prime Minister Modi’s recent speech in the Lok Sabha in reply to the no-confidence debate relied heavily on this dubious EPFO data to claim that the govt. has met its promise of creating one crore jobs in a year. 45 lakh (or 45%) of the one crore was based on this data.

The remaining 55 lakh (1 crore minus 45 lakh) were claimed by PM Modi to have been proved by National Pension Scheme enrolment (5.68 lakh); doctors, CAs and lawyers who started working (more than 6 lakh); and 20 lakh in the transport sector based on sales of auto-rickshaws, commercial vehicles and passenger vehicles. [These add up to 32 lakh not 55 lakh, but who cares!]

Also Read: Parliament: What About Farmers & Workers? And, Jobs?

Even this logic is spurious for it doesn’t account for any of these new employees being covered under EPFO and counted earlier. It makes assumptions for each category that are not backed by any data or evidence from actual surveys. Autorickshaws, Modi argues, are run in two shifts, thus two autos give rise to three jobs. Who says? Many autos are run by owners for one shift or stretch only. Similar are the fantastic assumptions about trucks and commercial vehicles and their drivers and conductors. The backroom boys of Modi & co. have created a la-la land that is ever more removed from reality.

Meanwhile, have a look at some other data, which is on a far more robust footing. In 2017-18, real GVA growth slowed down to 6.5% compared to 7.1% in the previous year. Not that GDP or GVA growth in itself is a sign of job creation (as the country’s experience under a decade of UPA showed) but slowing growth definitely cannot be accompanied by jumping employment. But there is more.

The investment ratio has been plummeting steadily showing that industrialists are not interested in creating new productive capacity (which would entail new jobs). CMIE estimates that last year, investment ratio of 28.5% was the lowest since 2011-12. New investment projects declined by 38.4% and completion of new projects declined by 26.8% in 2017-18 compared to the previous year. Foreign direct investments were down by 15 per cent.

More directly, CMIE estimates indicate that total employment in the country in 2017-18 was 40.62 crore, lower than the 40.67 crore estimated for 2016-17. The difference is only 0.1% so it may just be a statistical blip. But what this means is that there is no growth in jobs.

In the current year (2018-19) things are getting worse according to CMIE estimates. In the first quarter, total employment declined to 40.19 crore, labour participation rate fell to 42.7% and unemployment rose to 5.5%. All these indicators are lower than their corresponding values during a year-ago quarter and during the preceding quarter, CMIE said.

So, in the real world, the country’s people are still searching for jobs while through Modi’s tinted glasses, they are merrily driving commercial vehicles, becoming doctors’ or engineers’ assistants or getting some other formal jobs.

This data war will only be settled in the 2019 general elections because only then will people tell whether they believe govt. numbers – or real life.