India Has More Jobs, But Poorer Jobs

India Has More Jobs, But Poorer Jobs
2013-7-27 12:03:16
For a government buffeted on all sides by bad economic indicators and a series of scandals, pilloried for both bad policy and policy paralysis, and condemned for a series of scams of ever-increasing magnitude, any straw needs to be clutched at.

The National Sample Survey Organisation’s report on employment and unemployment in India, 2011-12, released in end-June, appeared to be one such straw for the UPA. The numbers indicated that 13.9 million more people were employed in 2011-12 than in 2009-10. If that was touted as a rebuttal of charges of jobless growth, then the decline in casual labour and the increase in salaried jobs appeared to disprove the theory about growing casualisation of labour. More women in cities were coming into the labour market and getting jobs.

There were spoilers, of course—the unemployment rate was up marginally and fewer rural women were getting employment. But at first glance, the numbers presented a slightly rosy picture. “The fact that seven million jobs a year have been created in two years when the economy wasn’t doing well isn’t trivial,” says Pronab Sen, chairman of the National Statistical Commission. Underemployment too, he notes, has come down from 6.6 percent to 5.6 percent.

But many devils lurk in the details. Several questions raised by economists and job market watchers are begging for answers. Where, for example, did the 13.9 million employment opportunities come from? It’s something that puzzles Sen too. “New jobs are created at the entry level when there are greenfield investments or expansion of existing projects by the corporate sector. Neither has happened in the past two years.” He feels that a large number of small and medium enterprises that came up during the boom years may have initially employed casual labour but later regularised them.

Most of the jobs generated, reckons Manish Sabharwal, CEO of staffing firm TeamLease, are low-wage jobs in low-productivity operations. That’s why he’s not very impressed by the data showing that the category of salaried workers has increased from 15.6 percent to 17.9 percent between 2009-10 and 2011-12 even as casual labour fell from 33.5 percent to 29.9 percent. Indeed, the draft 12th Five-Year Plan document shows 66 percent of workers are in units that employ less than six workers.

For Sabharwal, the rise in wage employment is marginal, at best. The fastest growing segment of jobs (in the organised sector), he says, is sales and customer service. “But the rise is not substantial, persistent or equal.

There’s similar scepticism about the rise in wage employment in rural areas from 7.3 percent to 8.7 percent. A bulk of these could be low-paying jobs in the government like anganwadi workers, accredited social health activists and para-teachers, notes Alakh Sharma, director of the Institute for Human Development (IHD).

What the data also do not reveal is how the youths fared. What’s not clear, notes Sen, is how many of the 1 million additional unemployed were in that condition because there were no new jobs or they were not qualified for the new jobs. “The debate is about a job. It should be about good jobs, non-farm, formal jobs, private sector jobs,” says Sabharwal. Ajit Ghose, visiting professor at IHD, agrees, noting that India has always had employment growth of around 2 percent. “Jobless growth in the Indian context means no growth in good jobs in the formal sector.” Some number-crunching by rating agency Crisil shows some clear patterns.

Jobs are a very limiting way, however, of looking at the employment situation in India, given that self-employment and casual labour continue to account for 80 percent of employment. That is not a very good sign, since much of the self-employment is not voluntary, but distress-driven.

Statistics show that the UPA’s flagship NREGA may have played a key role in keeping women out of the labour market in rural areas.

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