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Data blackout in India demonstrates a lack of responsibility
INDIA is facing its biggest employment crisis since the 1970s. It is also confronting an unprecedented "employment data crisis" caused by the government's suppression of unfavourable job numbers that can seriously damage the ruling party's prospects in the forthcoming general election.
The country's unemployment rate hit a 45-year-high of 6.1 per cent in the financial year 2017-18, according to the National Sample Survey Office (NSSO) of the Ministry of Statistics and Programme Implementation. The information was given to the media by the NSSO, but the government has not officially released it.
The data blackout has worsened a crisis of confidence. Two members of the NSSO - including the acting chairman of the National Statistical Commission (NSC) PC Mohanan - resigned late January in protest over the government's decision not to release the data.
Mr Mohanan explained: "We have resigned from the NSC. Over the months, we have been feeling that we were not being taken seriously and being sidelined by the government. Recent decisions of the NSC were not being implemented."
When Narendra Modi was campaigning to be prime minister in 2013, he declared that if his Bharatiya Janata Party came to power, it would create 100 million jobs by 2022. The promise has remained unfulfilled as only about 823,000 jobs had been created in India till October 2017, according to the International Labour Organisation (ILO), and most of them are classified as vulnerable employment because they are not regular, full-time jobs.
The scenario undermines the entire narrative of the "demographic dividend" of a young workforce of people under the age of 35 years who make up 65 per cent of the population. The 10 million young people who enter the job market every year were supposed to earn and spend, and generate economic growth. The data shows that nearly one in every five young persons is unable to find a job, and the demographic dividend has failed to materialise.
The data blackout has sparked widespread uproar with many prominent economists warning that the unemployment situation is likely much worse than the data shows.
Kaushik Basu - professor of economics at Cornell University, who was the chief economic adviser to the Indian government in 2009-12, and chief economist of the World Bank in 2012-16 - commented in an article in The New York Times that "India can hide unemployment data, but not the truth".
It is alarming that two other sources of official employment statistics have been discontinued. One, the Labour Ministry decided to stop the Labour Bureau releasing data which it had been providing until 2016. And two, the annual Employment-Unemployment Survey was scrapped in 2017. The government has reneged on its commitment to publicly release employment data every month.
Dr Basu explains that the "information blackout is uncharacteristic for India, which has been praised, including by the Nobel Prize-winning economist Angus Deaton, for playing a pioneering role, globally, in statistical data collection".
With the data embargo in place, economists must rely on private sources. But even these estimates paint a worrying picture of an employment crisis of terrible proportions. Such authoritative surveys place the unemployment rate in the same range as the data that has been suppressed.
The business information provider, Centre for Monitoring the Indian Economy, has estimated that India's unemployment rate was 7.38 per cent in December 2018. A CMIE survey shows a steep fall in employment in 2018 of as much as 11 million jobs.
The Centre for Sustainable Employment at Azim Premji University reported that youth unemployment is currently 16 per cent, with women holding just 16 per cent of jobs in the service sector. Women were employed in only 13 per cent of decision-making roles as senior officers, legislators and managers in 2011, and the figure fell to 7 per cent in 2015.
The country's economic growth rate is strong: the International Monetary Fund expects the Indian economy to have grown 7.4 per cent in 2018 and to expand 7.8 per cent in 2019. But economic growth is not translating into jobs.
"A 10 per cent increase in GDP now results in less than one per cent increase in employment," according to a report from Aziz Premji University. The International Labor Organization says that there will be 18.9 million jobless people in India this year, a little more than 18.6 million for 2018.
The problem, Dr Basu believes, is that "the Modi government's economic policy has disproportionately focused on a few big corporations, neglecting small firms and traders, the agricultural sector and most workers", and the results of the erroneous choices are now showing.
The suppressed jobs data came from the first comprehensive survey on employment conducted by a government agency after Prime Minister Modi carried out demonetisation in November 2016. Key highlights of the data are that unemployment was higher in urban areas at 7.8 per cent as compared to 5.3 per cent in rural areas, and it reached a record-high level in 2017-18 compared to the previous year. Urban unemployment was also "much higher compared to that in the overall population".
The worst hit are educated rural women whose unemployment rate ranged from 9.7 per cent to 15.2 per cent from 2004-05 to 2011-12, and rose to 17.3 per cent in 2017-18. The jobless rate for rural educated males surged to 10.5 percent in 2017-18 from 3.5 per cent to 4.4 per cent from 2004-05 to 2011-12. The construction sector, one of the biggest employers in urban regions, suffered major turmoil.
The suppression of official statistics - which actually amounts to a denial that the problem exists - will delay government action to address the employment crisis. There is mounting speculation that the information was blacked out because the official surveys would show a steep decline in employment in an election year.
It is troubling that Mr Modi has been dismissive about the concerns expressed by the opposition parties with his comment that "no one has accurate data on jobs" and describing the statistics as "unfair" and "propaganda".
Prime Minister Modi's promise to usher in "happy days" (acche din) has been shown up as just a slogan to win votes. The lack of transparency on the part of the government not only reveals its nervousness ahead of the general election (to be held in April/May this year), it also demonstrates a lack of responsibility to confront the tough realities of the job market.
- The writer is editor-in-chief of The Calcutta Journal of Global Affairs.