With Modi government completing three years different articles/op-eds are out on different websites and newspapers judging the government’s performance. Almost all of them commend the government efforts on the economic front. India has emerged as the fastest growing country in the world. Low inflation, better ranking in ease of doing business, push for better infrastructure, increase in investors’ confidence, and rise in foreign direct investment are some other achievements of the government. However, some sites are out blazing guns at PM Modi, blaming that the growth is ‘jobless growth’. According to them even though the economy is growing at 7% but there is unemployment factor that overshadows it. According to Quint “At 1.35 lakh, 2015 recorded the lowest figure in terms of job creation in seven years, down from 4.19 lakh in 2013 and 9 lakh in 2011. Last year, job growth was only 1.1 percent as compared to the GDP growth of 7 percent.”
Sure, that’s alarming but wait that’s not the complete picture. The premise of “growth without jobs” in India is largely based on the quarterly employment survey (QES) of the Labor Bureau.
The latest QES report is based on records from enterprises that employ 10 or more workers in eight major sectors. This report is based on the sixth economic census (2013-14) database, which is perceived to be a comprehensive database of non-agricultural enterprises in the country. Manufacturing, construction, trade, health, education, restaurants and accommodation, information technology and business process outsourcing, and transport are the sectors taken in account. They roughly account for 92 million workers which constitute about 85% of India’s 108 million workers engaged in non-agricultural activities. These numbers are approximations because the detailed data has not been made public for the latest economic census. So, it is difficult to separate employment in health from human health and social work activities. This makes the data hazy. The actual number of workers in the sampling frame of QES reports is much smaller.
According to a report in September last year it was just over 20 million. The main reason is because quarterly employment survey takes in account organizations that have 10 or more workers. According to the findings of the sixth economic census conducted between January 2013 and April 2014—the average employment size of an enterprise in India was 2.24. This blows holes in the QES report which takes into account enterprises with more than 10 people. To add more, nearly one-third of non-agricultural employment is in organizations which do not employ even one worker. In the sixth economic census the share of employment in organizations with 10 or more workers has been falling and was just above one in five. Only 75% of India’s workers were employed for more than six months in a year as per 2011 census data. The National Sample Survey Office (NSSO) survey (2011-12) shows that only 18% of India’s workers had regular salaried employment.
To make things worst QES report covers only 11 states. Above all it clearly states that these statistics are based on records by firms and are not verified. India’s rigid and often confusing labor laws are also to be blamed partly. They are enforced by a number of agencies that have done irreparable damage to the cause of labour. It has created two classes of workers contractual workers which comprise 90 per cent who have no job security and paid workers with secure jobs comprising 10 per cent of the total. By estimation half the workers in India’s corporate sector are contractual and have no job security. All this makes the credibility of QES report extremely doubtful and to draw any conclusion from this would be unfair.
Secondly, many so-called experts predict that the good days of Indian Information Technology firms are over. Automation, the immigration factor and anti-globalization have to lead to mass firings in IT firms but that also one side of the story. According to NASSCOM, India’s IT sector continues to be a important employer and has added 1.7 lakh jobs in 2016-17. With the changing dynamics the need of time is up skilling workers to new technologies. India has created image of IT leader in the world. According to Nasscom president R Chandrashekhar the industry will keep growing and will have strength of 60-65 lakhs by 2025.The perception of massive job loss in IT is because of its size. Even if 1% people in IT industry are fired because of performance issues it would result to around 40,000. In this digital age, no company can sustain without efficient workforce.
The increase in digital adoption by companies is gearing up worldwide IT spending. According to some forecasts estimates the IT spending will to rise to $3.5 trillion in 2017. This year, software sales are expected to grow at 7.2% while IT services spending is expected to grow 4.8%. With the overall market expansion Indian IT industry do not have much to worry. The software and IT services growth would be significantly higher than overall IT spending. Every time there is change in Information Technology ecosystem there is room for more opportunities and employment than before. History is proof of that when in the 1990s-custom-built software gave way to packaged software like Oracle. At that time, also there was scepticism about the fate of IT firms. But more new jobs in implementation, support and maintenance of packaged software were created than were lost in custom development. In the current scenario, there is no doubt that the automation and Artificial intelligence will replace some of the technological skills that were provided by the IT services industry in the past. But with digitalization in almost every industry there would be increase in new jobs. These new jobs would be different than old jobs and people would adapt to them. The bottom line is that there is great opportunity and Indian IT firms must capitalize on it.
Having said all this there is always room for improvement. It must be accepted that the organized manufacturing sector is no longer the area to generate large-scale employment as it was in the past. The Labour Laws should be reformed immediately as because of them corporations in India prefer Capital intensive mode of Production in a country where labour laws are less rigid. At the same time the interests of the labours must be kept in mind. Feathers of trade unions must be plucked as they are the wings of left leaning political parties that do more harm than good to the cause of labors. The education system in our country is failing. It needs to be changed to create the desired skill-sets in modern era. The results in Bihar are perfect example for this. Entrepreneurship must be promoted more aggressively. Students must be encouraged to participate in Start-up India mission with viable funding. Sector like Food Processing should be promoted as they are job intensive. Micro, Small and Medium Enterprises (MSME) sector must be paid special attention and Micro Units Development and Refinance Agency (MUDRA) could turn the fortune of this sector.
The media with biased agenda should stop selective reporting with narrow mind and look at the broader picture but for that they have to throw “Anti-Modi” veil which is next to impossible.