While the lack of sufficient job creation could lead to resentment due to people’s high aspirations, Niti Aayog member Bibek Debroy on Thursday flagged a dramatic rise in voluntary unemployment across the country, where people choose not to work below a certain income level after ‘investing’ in education.
“Nothing has changed substantially in the last one year [on the jobs front], which is in a way a sad commentary. We need to create 10 to 12 million new jobs. How many are we creating a year? We don’t know. If you believe the Labour Bureau, which I don’t believe - about 1 million,” he said at a FICCI conference on jobs.
The trouble with current official data on labour and employment, he pointed out, is that they could be used to claim ‘jobless growth’ as well as ‘growth-less jobs’ – and fail to capture the predominantly informal and unorganised nature of the Indian economy.
“Especially, given our large self-employed and unorganised sector, let us recognise that the only credible way to get data on employment and jobs is using household surveys over and above enterprise-level surveys. Otherwise, we will always have an imperfect picture,” he said.
The views of the Centre’s think tank member assume significance as Prime Minister Narendra Modi earlier this week announced a task force led by Aayog Vice Chairman Arvind Panagariya on employment data. While the government attaches highest priority to job creation, policy making and analysis is conducted in a data vacuum. So the task force has been tasked with coming up with reliable and timely data solutions for tracking employment trends.
The latest employment data based on household surveys conducted by the National Sample Survey Organisation (NSSO), usually every five years, dates back to 2011-12 and a fresh set of data is expected sometime in 2018, the Aayog member said, though that will be a stand-alone survey on labour and employment, independent of the quinquennial exercise.
Mr. Debroy said the data compiled by the Labour Bureau from enterprises for select sectors on a quarterly basis was not amenable to finding out what is really happening to labour and employment thanks to its sample size and design.
“If a sufficient number of jobs are not created, it can lead to a great deal of resentment, because of aspirations,” Mr Debroy said, stressing that manufacturing alone won’t create many direct jobs.
“The primary growth in jobs will come from the services sector. Even when reforms happen in agriculture, most of the jobs will be created in areas that will show up in national income accounts as services such as transportation, logistics.”
Citing data compiled by the Centre for Monitoring Indian Economy based on a household survey with a ‘reasonably decent sample size’, Mr. Debroy said that involuntary unemployment hasn’t gone up, but voluntary unemployment has gone up dramatically.
“Anecdotally, we know about this – incomes going up and women voluntarily opting out. People are unwilling to settle for jobs, particularly after having ‘invested’ in education, that do not give you a salary above this level,” he said.
