In a recent report titled “Globalisation Backlash”, the World Bank has predicted India’s GDP growth to be 7.2 per cent in 2017-2018 and 7.7 per cent in 2019-2020. The forecasted rate of growth vigorously caters to India’s aspiration of being recognized as the most promising economy globally. But do these numbers paint the complete picture?
The Indian mind-set has traditionally been biased to looking at GDP figures as the most important indicator of development taking place in the country. In the process, we may have neglected an equally important indicator – employment generation. And though employment is usually seen as a by-product of GDP growth, the reality in India cannot be more distant. Estimates from NSSO and CSO data suggests that between 2004 and 2012, India’s net new cumulative job growth swelled by only 3 per cent (or 15 million net new jobs) when the country’s economy expanded by a whopping 54 per cent. It cannot be denied that a nation of 512 million strong labour-force cannot afford jobless growth.
Employment generation has to be the soul of Indian policy creation, and in order to do that, it is imperative to know the statistics on the same periodically. The last time India carried out a focussed and comprehensive estimation of the employment situation nationwide was in 2012 through the 68th round of NSSO. Needless to say, these figures are no longer used for gauging policy exigencies in the country.
Regular estimation of job numbers, and various indicators related to it has long guided policy creation in some of the other successful economies. The U.S. Bureau of Labour Statistics (BLS), a 2500 employee strong arm of the U.S. Department of Labour, invests approximately USD 600 million annually on finding facts in the field of labour economics and statistics. Its monthly employment report is regarded as a significant resource to evaluate government’s performance and render critical perspectives on employment generation and economic development.
Other BRIC countries have also managed to make considerable progress in producing regular data on employment in order to determine policy priorities. China brings together three major bodies, namely, National Bureau of Statistics, Ministry of Human Resources and Social Security, and All-China Federation of Trade Unions for producing its Labour Statistical Yearbook. Brazil’s Institute of Geography and Statistics assesses the labour market monthly. Russia’s Federal State Statistics Service too publishes its Labour Force Report quarterly.
India is getting started though. The government has just set up a taskforce under NITI Aayog’s Arvind Panagariya to produce periodic and reliable data on employment. This is an addition to another recent initiative by the PMO to have all cabinet proposals state the number of jobs they can create. The most redoubtable initiative in the space, however, comes from the Statistics Ministry which has recently announced plans to conduct periodic labour force surveys in the country to produce quarterly employment data.
With the launch of a plethora of employment related schemes in the recent times, periodic labour force surveys would not only guide general policy creation in the country but also equip the central and state governments to diagnose and address challenges inflicting specific industrial sectors and regions. Further, the exercise would bolster government’s capacity to create more meaningful jobs, and eventually move towards formalizing the economy.
Managing the labour markets effectively is an important strategy to ensure sustained and inclusive economic growth. Regular and comprehensive employment estimation is a crucial element of it. With the announcement of periodic labour-force surveys, India has not only created an opportunity for itself to undo its recent lukewarm performance on the job creation front, it has also opened a lucrative window to make job creation the heart of policy formulation.
The growth in GDP figures may or may not create enough jobs, as is evidenced by what happened between 2004 and 2012. Creating enough jobs, however, will lead to a sustainable GDP growth without a doubt. Recent initiatives by the central government on this front elicit optimism.