The recent figures released by the Labour Bureau's Quarterly Economic Survey have pointed to a rather dangerous trend in terms of employment for the country. According to the latest government data, job creation for the nine months running up to December 2016 for the eight labour-intensive sectors of the economy was at an abysmally low 2.31 lakhs. This was several times lower than the required target and failed to meet even the basic target of 1000 jobs a day.
As expected, the government has come under heavy criticism for this phenomenon of "jobless growth" that has hung over them from 2016. However, in response Arvind Panagariya, the vice chairman of the NITI Aayog, came out with a statement criticising the data and methodology adopted by the Labour Bureau for having a limited sample size and only accounting for firms that employed more than 10 individuals. From this one can only assume that second in command of the NITI Aayog feels that employment figures would have been more accurate and perhaps even painted a better picture had the smaller firms been taken into account.
The argument that the government is moving to a demand-oriented approach that is rooted in "quality" skilling, rings hollow when no clear parameters of "quality" are provided...
However, if one were to look at the Labour Bureau's findings then one would see that 1.32 lakh jobs being added in the October- December quarter imply that allegations of massive job losses due to demonetisation have been inaccurate and have no statistical evidence. Such a conclusion would mean that the Labour Bureau not taking into account firms with fewer than 10 workers helped the government paint a much rosier picture of the employment climate, especially during a time period as controversial as the one around the demonetisation decision.
This implication comes directly from the fact that the average number of employees in an Indian economic establishment is only 2.24, so logically firms that are highly liquid. To conduct a survey and statistically exclude firms that would be worst hit by demonetisation implies a concerted attempt by the government to shore up its employment figures.
The government, of course, seems to be oblivious to the employment crisis, as is evident in Labour Minister Bandaru Dattatreya's February claim that through "digital solutions" and job melas, the government would successfully guarantee jobs for 5 crore unemployed people by 2020. Much hype has also been made around the Skill India program's potential to guarantee jobs for the unemployed.
However, just months after this statement and the same day of Mr Panagariya arguing in defence of the government's attempts to create jobs, the government abandoned its goal of training 500 million people by 2022. The explanation provided was that the government was switching to a demand-driven target over the old supply-side approach adopted earlier.
If the inflated yet abysmal economic figures presented by the Labour Survey are coupled with a failure to achieve our skilling targets, then what kind of a future is India looking at?
However one need only look at the consistent failure of successive governments to meet skilling targets to see why the 2022 goal has been abandoned. The argument that the government is moving to a demand-oriented approach that is rooted in "quality" skilling, rings hollow when no clear parameters of "quality" are provided and the ministry explicitly states that it is decoupling skills training from jobs while refusing to respond to questions regarding how many of the 11.7 million trained so far have been employable... i.e. employed.
The clear underperformance in employment generation in 2015-16, has been further worsened by inadequate skilling at a time when the markets brace for more and more specialised skill-based jobs.
This brings us to a larger question. If the inaccurate and inflated yet abysmal economic figures presented by the Labour Survey are coupled with a failure to achieve our skilling targets, then what kind of a future is India looking at in terms of employment?