Most unemployment surveys are skewed, PM Narendra Modi tells House

Economy & Policy:

In what is likely to be his last speech in the Lok Sabha’s current term, Prime Minister Narendra Modi on Thursday responded to the recent criticism his government has faced for its purported failure to create jobs.

In his reply to the motion of thanks to the President’s address, Modi contrasted 55 years of “self-serving” Congress rule at the Centre versus the achievements of his government’s 55 months in the “service of the people”. Alluding to the grand alliance of the Opposition parties,
Modi said the people of the country did not want a mahamilawat (greatly adulterated) government.
The PM, referring to Congress leader Mallikarjun Kharge’s speech, said for many BC stood for ‘before Congress’ and AD for ‘after dynasty’. He said his efforts at a ‘Congress-mukt Bharat’ were an offering to Mahatma Gandhi in his 150th birth anniversary year — a reference to Gandhi’s wish that the Congress should be disbanded since it had achieved its goal of attaining independence from the British.

Modi said his government had provided a clean government and expressed confidence that the people of the country would again repose their faith in his leadership.


 Earlier, Kharge cited reports of a National Sample Survey Organisation (NSSO) survey (which the government later termed a draft report) that said the unemployment rate was 6.1 per cent in 2017-18, the highest in 45 years, to attack the government. Modi termed most surveys that try to capture unemployment rate as skewed since these did not cover the unorganised sector, which accounts for 85-90 per cent of jobs.

Challenge is to create more organised jobs: Tata Sons chief Chandrasekaran

Companies News:

India faces the challenge of creating formal jobs and migrating people from the informal to the formal sector, said N Chandrasekaran, chairman, Tata Sons.

He pointed out that creating jobs in the formal sector is a bigger problem than lack of jobs.
The problem, he added, arises from the lack of access to services, including healthcare, education and financial services. Therefore, if the accessibility part is addressed effectively by going digital, it will lead to more jobs.

Chairman of the $103 billion conglomerate, the largest employer in the private sector, he was addressing delegates from technology start-ups and the information technology sector at Mumbai’s TiECON, an annual flagship event.

With the theme “unexplored,” the two-day conference is expected to be attended by over 2,000 delegates, including over 500 investors as well as more than 750 high potential start-ups. “It’s not so much about lack of jobs. We have jobs. The challenge is of creating formal jobs and migrating people from informal to formal, getting them jobs that offers decent pay. That’s the fundamental problem and requires lot more thinking,” said Chandrasekaran.


 His comments come amid recent reports of the unemployment rate in India rising to a 45-year high of 6.1 per cent in 2017-18...Read More

Interim Budget falls short on a key promise made by Modi; creating jobs

Interim Budget 2019:

India’s budget provided plenty of giveaways to farmers and middle-class voters, but was short on detail on one of Prime Minister Narendra Modi’s key promises: creating jobs.

The issue has become a politically sensitive one ahead of elections due by May, with the government accused of deliberately withholding the most recent labor report because of the possible bad news it presents. A local newspaper published leaked details of the report a day before the budget, showing the unemployment rate reached a four-decade high of 6.1 per cent in the year to June 2018.

Modi swept to power in May 2014 with the biggest electoral mandate in three decades after promising to create 10 million jobs each year. Finance Minister Piyush Goyal said in his budget speech last week that 20 million “employment opportunities” were added in two years. Yet no official labor survey has been published since 2016, when the unemployment rate was reported at 5 per cent.


 Much of the budget focused on consumer stimulus -- such as the $10.6 billion-plan to pay cash to farmers -- with few specific measures to help boost businesses to create opportunities for about 12 million young people who enter the job market each year...Read More

2019 polls: Why govt should aim to create jobs, not offer basic income

General Election 2019:

During election season, which we’re entering in India, everyone likes the idea of giving voters more money. Congress Party President Rahul Gandhi, the de facto opposition leader, says his party will guarantee a minimum income for the country’s poor if victorious. Reports suggest that Prime Minister Narendra Modi’s government may compete by announcing some form of direct transfer of cash to farmers in the interim budget to be revealed on Friday, which could cost the exchequer nearly $10 billion annually.

While governments everywhere should take care of their most vulnerable citizens, the idea of guaranteeing a basic income is wrong for India right now. Fundamentally, it would only work if two conditions were met. First, large sections of the population would have to be mired in absolute poverty. And second, all other subsidies and welfare programs for them would have to be abolished in order to free up the necessary funds without completely blowing open India’s fiscal deficit, which is already strained.

ALSO READ: Interim Budget 2019: Before polls, govt wants expansionary economic policy


 Neither condition prevails in India. While there’s no recent government estimate of the number of people living below the poverty line, credible research by the Brookings Institution suggests that extreme poverty in India, defined as those living on less than $2 a day, now afflicts only five percent of the population. Granted, that’s still more than 70 million people. But, for the vast majority of Indians, the challenge is no longer subsistence, it’s aspiration. No basic income guarantee will be able to address rising aspirations unless it’s a very large sum of money. At India’s level of national income, providing anything more than a subsistence income would simply be unaffordable...Read More

Interim Budget 2019 must focus on skilled labour to tackle unemployment

Intrim Budget 2019:

Budgetary allocation to the ministry of skill development and entrepreneurship (MSDE) has witnessed a 237% increase over the last four years, from Rs 1,007 crore (actual expenditure) in 2015-16 to Rs 3,400 crore (budget estimate) in 2018-19, according to ministry data.

The 2018-19 allocation, however, represents a “drastic cut” by the ministry of finance against the Rs 7,696.54 crore requested by the MSDE, due to underutilisation of funds allocated to the MSDE in previous years, revealed a parliamentary committee report in March 2018. The committee warned that the budget cut would “adversely affect various schemes” implemented by the ministry tasked with skilling India’s youth.

In November 2018, the government’s aim to skill 10 million youth under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY, or Prime Minister’s Skill Development programme) by 2020 was found to be 64% short of meeting the target. Just over 3.6 million people had been enrolled in PMKVY by November 30, 2018, government data showed. Among these, 3.39 million had received training and 2.6 million had received certification after training--66% and 74% short of the target, respectively.

There is a direct link between India’s underskilled workforce and high unemployment rates. Unemployment has been a key challenge for the National Democratic Alliance (NDA) government. The unemployment rate for people aged 15 years and above in India was 3.4% in 2013-14, which saw a further increase to 3.7% in 2015-16, according to a government reply to the Lok Sabha on July 23, 2018, which did not provide data on numbers of unemployed.The unemployment rate rose to a four year high (3.9%) in 2016-17, Business Standard reported on January 11, 2019, citing the labour bureau’s sixth annual employment-unemployment survey...Read More