When the Bourbon dynasty of France was restored after Napoleon, it was famously said that they never learnt anything, never forgot anything. Albert Einstein said a similar thing about insanity – that you keep on doing the same thing again and again, expecting different results. Prime Minister Narendra Modi’s speech in Parliament on Thursday was like that. He has learnt nothing and repeated the same dodgy numbers on job creation to somehow wish away one of the most severe jobs crisis the country has seen in recent decades. Remember: latest CMIE data shows that the unemployment rate in India was 8.2% in February 2019. Recently, a leaked report of the first annual employment survey conducted by the National Sample Survey Organisation (NSSO) had shown that joblessness was at a 45-year high in 2017-18.
Last July, while replying to a no-confidence motion, Modi had quoted figures from the provident fund scheme and pension scheme enrolment, as also numbers of doctors, chartered accountants, lawyers and truck or bus operators to claim that one crore jobs were added in one year. Newsclick had pointed out the fallacies in his claims then. This time round he has done the same, refusing to learn that these figures mean nothing, show nothing.
Here is what he said yesterday in Parliament on the jobs front, and what’s wrong with it.
Myth #1 - Provident Fund and Pension Enrolment
Modi said that between September 2017 and November 2018, 1.8 crore persons started contributing to EPF for the first time. Out of these 1.8 crore, 65 lakh were below the age of 28 years. He added that enrolment in the pension scheme (NPS) increased from 65 lakh in March 2014 to 1.2 crore in October 2018.
The latest data put out by EPFO is available on their website. It shows that 1.8 crore people enrolled in the scheme between September 2017 and November 2018. But it also shows for each month, that 1.4 crore persons quit the scheme! It even gives the number of persons (33 lakh) who quit but rejoined. Modi is quoting the joining numbers mistakenly saying that these are new job entrants. But what about those who are quitting? By his logic they should be becoming jobless! All this is summarised below:
As shown above, the net new addition to the Employees Provident Fund (EPF) scheme is only about 74 lakh. The truth is that the Employees’ Provident Fund Organisation (EPFO) does not represent new employment. Encouraged by the PM Rozgar Protsahan Yojana, which subsidises employers for enrolling employees in the scheme, many employers have been getting their old employees enrolled. This includes young persons also, which Modi is quoting. The reason why there is such a high turnover – 1.8 crore joining and 1.4 crore quitting – is that probably employers have gamed the system and are simply rotating employees in and out. Whatever be the case, these numbers are not of new jobs.
The same applies to enrolment in the pension scheme. There is no proof that those enrolled were fresh entrants in the job market.
Myth #2 Professionals
Modi claimed that 6.35 lakh new professionals, such as doctors, were added to the category of non-corporate tax payers implying thereby that these are new jobs. All those who start paying tax are not new job entrants. And, even if this was the case, the total number of such jobs adds up to 6.35 lakh in nearly five years? That is a rather pathetic record for even the middle class.
Myth #3 Transport Sector
Modi claimed that since 2014, 36 lakh new trucks or commercial vehicles, 1.5 crore passenger vehicles and 27 lakh autos have been purchased. On this basis, he said that 1.25 crore jobs were created in the transport sector. Is there any record or proof that those persons who are driving these new vehicles were doing nothing before that? Maybe they were driving old vehicles, maybe they were working in the fields or as manual labourers or in some office. There is no reason to believe that they are getting a job for the first time.
Myth #4 Tourism
Modi claimed that there was a 50% hike in approval of hotels and went on to assert that 1.5 crore new jobs were created in the tourism sector. Again, the problem with this is – are they new jobs or are people moving from one job to another? Nobody knows, least of all Modi himself. Regulatory approvals for new hotels do not show anything because you need to show how many hotels closed down to get a picture of employment.
Myth #5 Mudra loans
Modi claimed that 4.25 crore first-timers got loans but he clarified that there is no job data. Then why give the number of first-timer loanees? Obviously, he wants to imply that they are fresh entrants. But just because somebody takes a loan for the first time, it doesn’t mean that he/she was starting to work for the first time! He/she could have been doing some other work earlier. In fact, Mudra loans do not indicate any job creation in itself. The amounts per loanee are also too meagre to imagine this. According to the most recent data on January 25 (Rajya Sabha Question No. 170 and 189), a total of 15.59 crore persons have been given loans worth Rs. 2.75 lakh crore. Which works out to a mere Rs.17,582 per loanee. What can be expected to happen with this amount!
Besides these myths, the Prime Minister also referred to assorted “job creating” phenomena like cab aggregators and common service centres. Again, the question is – are these people getting jobs for the first time?
Modi’s speech singularly failed to mention industrial or service sector jobs that may be created through a policy of public investment-led growth. In fact, investment is flagging, credit is growing at a tardy pace, exports are down and sectoral output growth rates are too small to expect any significant growth in jobs. Modi’s vision has a double limitation – one is the neo-liberal dogma that unemployment is bound to exist, and in fact, is a good thing to have; and the other is the Rashtriya Swayamsevak Sangh-engendered ignorance about the real economy.
That is why Modi and his government have failed miserably to create jobs – and hence the lies, day in and day out.