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India to track jobs in small outfits to arrest claims that Modi has failed to create jobs

New Delhi

FOR those trying to solve the Indian economy jigsaw puzzle, reliable jobs data has been one crucial missing piece. Prime Minister Narendra Modi has a plan to fix that defect.

The government is set to map employment in the economy's vast informal sector when the labour ministry starts publishing quarterly surveys on jobs in about a year's time, covering enterprises with less than 10 people, including those who are self-employed. These are businesses that are typically cash-based and don't pay tax.

"It's a huge survey and takes the entire country into account," BN Nanda, senior labour and employment adviser in India's labour ministry, said in New Delhi last week. "This will be the first informal sector data from the government, enterprise-wise."

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With more than 90 per cent of India's labour force estimated to work in the informal economy, a lack of periodic and credible data in this sector makes it difficult to assess the impact of policy actions and measure true growth.

Multiple data sets for formal jobs point in different directions, giving the perception that Mr Modi has failed to generate employment. That's denting his popularity among young voters ahead of next year's election. He swept to power in May 2014 with the biggest electoral mandate in three decades after promising to create 10 million jobs each year for the burgeoning youth population.

About 12 million young people are set to enter the workforce every year over the next two decades. The World Bank says India must create 8.1 million jobs a year to maintain its employment rate.

Much of the government's annual jobs data based on household surveys, which also captures the informal sector, is dated. The survey published for 2015-16 put the unemployment rate at 3.7 per cent. The labour bureau will soon publish the data for 2016-17 - after a lag of two years - and has discontinued any more surveys, Mr Nanda said.

The organised sector, for which data is available from multiple sources, creates some confusion. The labour ministry's figures released in March show India added 136,000 workers across eight sectors in the quarter starting July 2017, against 64,000 additions in the previous quarter.

The first set of data released by social security organisations in April showed over 3.5 million new payrolls were generated in the six months through February. The government said it's an "eye opener" and puts an end to "speculations and conjectures regarding job creation". BLOOMBERG