The Spectre Of Unemployment Haunts The NDA

 Atulan Guha and

Partho Saha

EMPLOYMENT generation to the tune of one crore jobs per year was one of the key election time promises made by the NDA. With the Lok Sabha elections approaching, the government has recently made a desperate claim that the target has almost been achieved, in the form of 84 lakhs employment opportunities being created on an average in the last three years. The government has made this claim on the basis of thin sample surveys of the National Sample Survey Organisation (NSSO), which is methodologically a fallacious exercise. The deceitful nature of this claim needs to be thoroughly exposed.

UNRELIABILITY OF EMPLOYMENT FIGURES

a) Methodological Problems

Since nearly 90 per cent of the total employment in India is in the unorganized or informal sector, the data on the magnitude and composition of employment, as well as compensation to the employees, is available only through periodic surveys. The authentic and comprehensive source of information about employment in India is the NSSO, which carries out large sample surveys on employment only once in five years. The last large sample survey was done in 1999-2000. Apart from the large sample survey, the NSSO also carries out thin sample surveys, the primary objective of which is to focus upon a particular socio-economic issue every year (e.g. the focus of the thin sample survey of 2000-01 was the small scale manufacturing sector). Apart from the primary objective, the enumerators are also asked to simultaneously do a smaller survey on consumption and employment. Since the focus of thin samples is on the primary objective, employment related data collected from these surveys are not reliable because of the existence of sample bias. This sample bias is created because the samples are selected to survey other aspects; say for 2000-01 it was to find out the performance of small scale manufacturing industries. This is for the first time that a government has claimed its achievements on the employment front on the basis of thin sample surveys of the NSSO, which cannot provide a correct estimate of the employment situation. This shows that the government has more to hide as far as the realities on the employment front are concerned.

b) Discrepancies in Employment and Output Performances in Agriculture

Quite naturally, there are discrepancies in the employment figures thrown up by the thin samples, which the government has quoted, and the output growth figures quoted in the Economic Survey. The most glaring of these discrepancies can be found in the figures for agriculture.

• In two of the three years covered by these surveys, the agricultural output declined from previous years.  But the surveys shows that there is an increase of employment of men in rural India by 170 lakhs in this period, which is more than 80 per cent of the increase in total employment of 210 lakhs between January 1, 2000 to October 1, 2002. How could employment increase by such a margin in rural areas in the backdrop of a fall in agricultural output?

• The employment of males in agriculture has been shown to have grown between July to December 2002 — the very months when severe drought swept across the country.

• On January 1, 2002, which is the mid point of the sample period July 2001 to June 2002, the employment rate for male and female workers in agriculture were 672 and 819 per thousand respectively. During the approximately same period, i.e. April 2001 to March 2002 the agricultural growth rate was 5.7. On October 1, 2002, which is the mid point of sample period July 2002 to December 2002 the employment rate for male and female workers in agriculture increased to 685 and 834 per thousand respectively. But agricultural output contracted during this period. Between April 2002 and March 2003 the agricultural growth rate was –3.1. (See Table 1)

TABLE 1

Employment Rate in Primary Sector

         Source: 58th round of NSS, Economic Survey 2002-03

c) Contradictory Figures

Beyond the methodological problems involved in quoting employment figures from thin sample surveys and the discrepancies between the employment and output growth figures, there are several other problems with the statistics churned out which require explanations on the part of the government. 

•  The NSS estimates suggest that between the two dates, January 1, 2000 (the mid point of 1999-2000) and October 1, 2002 (the mid point of July-December 2002) employment has increased by 210 lakhs. The average annual employment creation between these two dates comes to around 76 lakhs, not 84 lakhs as claimed by the Planning Commission.

• According to the thin sample surveys, between January 1, 2002 and October 1, 2002, employment declined by 90 lakhs. Therefore, if the NDA government claims an average annual increase in employment of 76 lakhs per year on the basis of the thin sample surveys, then they have to also explain the employment decline by 90 lakhs in the last 9 months of 2002. (See Table 2)

  TABLE 2

   

  Nature of Sample	Years	Number of People Employed	Increase in Employment
  Large	1st Jan 2000	39.9 Crores
  Thin	1st Jan 2001	40.8 Crores	Increased by 90 Lakhs
  Thin	1st Jan 2002	42.9 Crores	Increased by 210 lakhs
  Thin	1st Oct 2002	42.0 Crores	Declined by 90 lakhs

                 Source: NSSO employment estimates quoted in Sundaram K, Economic Times, February 14, 2004  

   

• In rural India the number of youth (15-29 age group) per 1000 persons having a job has come down from 741 to 738 for males and from 400 to 334 for females between the periods January 1, 2002 to October 1, 2002.

• The number of rural females having a job per thousand persons is lowest in October 1, 2002 compared to the three previous dates. (See Table 3)

TABLE 3

 Number of People Usually Employed per 1000 persons in Rural Areas

Source: 57th and 58th round of NSS

WHERE ARE THOSE 10 MILLION JOBS PER YEAR?

The Annual Report of the Planning Commission for 2002-03 claimed the creation of 50 million job opportunities over the 10th Plan period (10 million per year). Out of this, nearly 20 million employment opportunities were supposed to be created by ‘innovative programmes and policies leading to a changed pattern of growth in labour intensive sectors’. The remaining 30 million jobs were supposed to be created by the ‘normal buoyancy’ of GDP growth as perceived in the recent past.

The two most labour intensive sectors of our economy are agriculture and small-scale industries. Agriculture over the last four years has performed badly, with agricultural output contracting in two years. The performance of the small-scale industries does not seem to be encouraging either (See Table 4), with the Economic Survey reporting a fall in its employment growth from 4.03 per cent in 1999-2000 to 3.55 percent in 2001-2002. The results of the ‘innovative programmes and policies’ have clearly not shown.

TABLE 4

 Sectoral Growth Rate of Output

                    Source: Economic Survey, 2002-03

Agriculture alone provides for 56 per cent of total employment (See Table 5) in the Indian economy. Estimates made on the basis of NSS data suggest that there has been a fall in the employment generation capacity of agriculture since the mid-1990s. A one-percentage point growth in agricultural output from the mid-1990s onwards resulted in only about 0.13 Percentage point growth in employment whereas during the late 1980s and early 1990s a one percentage point growth in agricultural output resulted in about 0.4 percentage point growth in employment. Moreover, it is now generally accepted that before the third quarter of 2003-04, the Indian economy was having a considerably low growth rate compared to the period before 1999-2000. (See Table 6) So the ‘normal buoyancy’ of growth could not be maintained during this period. 

                                                              TABLE 5

                                          Sectoral Share of Employment

                                             Source: Ministry of Labour

TABLE 6

Growth Rates of the Indian Economy

Source: Economic Survey, 2002-03, 2000-01  

It is therefore difficult to take the Planning Commission’s claim of 10 million jobs creation per year very seriously. The latest figures on employment based on the large sample survey of NSS had shown rising unemployment across the country. (See Table 7) The situation was particularly grim in the rural areas, where employment growth had collapsed following cut backs on rural development expenditure. If we look at the growth performance of the economy in the 3 years after 1999-2000, there is no reason why the employment situation would have improved since the GDP growth rate on average has been lower in the period between 2000-01 to 2002-03 than the period between 1993-94 to 1999-2000.

TABLE 7

 Unemployment

 Source: Economic Survey, 2002-03.

The dismal performance of the Vajpayee government on the employment front comes out further through official statistics showing an absolute decline in the numbers of employed in the organized sector during its tenure. (See Table 8)  

                                                          TABLE 8

                        Employment in Organised Sector (in Lakhs)

                        Source: Economic Survey, 2002-03

                        &  DGE&T, Ministry of Labour.

THE REALITY OF EMPLOYMENT  GENERATION SCHEMES

An overview of the state of different employment generation schemes brings out a sorry picture. For rural India the two major programmes being run by the central government with the cooperation of the state governments are Sampurna Grameen Rozgar Yojana (SGRY) and Swarnajayanti Gram Swarozgar Yojona (SGSY). In SGRY only around 50 per cent of the target for man-days creation has been achieved during 2001-02 and 2002-03, a substantial proportion of allocated funds remaining unutilized.

The allocation for SGSY by the central government has also gone down over the years, along with a fall in the fund utilization ratio.

Data on the performance of the employment generation scheme for urban areas, the Swarna Jayanti Sahari Rozgar Yojana (SJSRY), is not disclosed by the concerned ministry. The funds allocated in the different programmes under this scheme have come down over the last couple of years.

The cutbacks in the expenditure on employment generation schemes and the poor utilization of whatever funds being allocated, even in the face of growing unemployment, exposes the anti-development face of the government.    

CONCLUSION

The performance of the NDA government on the employment front has been dismal. Having failed to undertake policies that generate employment, the government is now trying to manipulate statistics and misuse independent bodies like the Planning Commission to churn out figures in order to buttress its hollow claims. The reality of burgeoning unemployment and growing discontent within the youth arising out of joblessness however continues to haunt the NDA. This might as well spell the doom for it in the forthcoming Lok Sabha elections.