Between October 2016 and October 2017, 9 million (90 lakh) jobs were lost according to latest CMIE data released last week. This continues the trend of falling employment in the past three years as recorded by successive Labour Bureau reports.
Typically ignoring this crisis at home, Prime Minister Modi was declaring that “he wants to make India a Global Manufacturing Hub and make youths job creators” at a meeting with international business persons on Nov. 13, on the sidelines of the ASEAN summit in Manila.
The unemployment rate reported by CMIE was 5.7% in October. This is up from 3% in July, steadily rising through the kharif season despite a largely normal monsoon which should have provided larger number of jobs in the agricultural sector.
Meanwhile, the Index of Industrial Production (IIP) for September again slowed down to show a growth of just 3.8% compared to 5% last September. This indicates that the slowdown affecting the industrial sector continues unabated. This is one of the main reasons for job losses. Notably, production of consumer durables actually dipped by 4.8% while infrastructure and construction goods production inched up by just 0.5%.
These dire statistics were released even as thousands of workers were protesting in Delhi demanding better wages and job security among other things. They held a massive mahapadav (mass sit in) in the Capital at the call of 10 central trade unions and several employees federations.
Modi government’s indifference to this exploding crisis of jobs is matched only by their incompetence in dealing with it. Apart from forced attempts to create jobs out of thin air – like the recent claim by finance minister Arun Jaitley that 25,000 persons will get jobs every year for the next five years in road building projects involving an outlay of Rs.5.35 lakh cr outlay – there has been little talk of job creation by the government. This is all the more bizarre because Modi and his government came to power in 2014 by promising jobs for everyone.
The job losses reported by CMIE show a drastic dip from November 2016 – when Modi’s disastrous note ban came in to effect. Readers will recall that in November-December 2016 Modi announced the sudden withdrawal of 86% of currency in circulation leading to chaos in the whole country with mass stoppage of work in all sectors, crashing prices of agricultural produce, dip in industrial output and misery for most people.
The economy hasn’t recovered from the shock of the noteban months, CMIE data on employment shows. The average work participation rate during the ten months preceding demonetisation was 47 per cent. During the ten months following demonetisation, the average labour participation rate was 44 per cent.
In October 2016, the last month before note ban, work participation was 46.42%. It dropped to 44.81% in November 2016 after announcement of note ban. Last month, a full year after the note ban came into effect, it had inched further down to 44.55%.
India has about 47 crore (470 million) working people. So each drop of one percentage point means that about 47 lakh (4.7 million) people have dropped out of the workforce. An estimated 120 million persons enter India’s labour force (working age population) every year. So, an army of unemployed is being created daily because job creation is nowhere near meeting the demand for jobs.