Comment by Riaz Haq on July 29, 2022 at 8:52pm

#India’s #Employment Rate in June Lowest in Last One Year, Says CMIE. Employment shrank by 13 mln, including 10 mln staying out
Shrinkage entirely in rural areas, should improve with monsoon - Bloomberg

https://www.bloomberg.com/news/articles/2022-07-05/june-employment-...

India’s labor market showed fresh signs of weakness in June, with the employment rate falling to its lowest in two years, as patchy monsoon rains may have delayed deployment of agricultural workers in rural areas, the head of a private research firm said.

Writing in the Business Standard newspaper on Tuesday, Mahesh Vyas, who is chief executive officer at the Centre for Monitoring Indian Economy Pvt, said the employment rate fell to 35.8% in June, from 37.07% in May. The jobless rate climbed to 7.8% of the total workforce in June, from 7.1% in May.

The rise in the jobless rate was entirely led by a rise in rural unemployment, data showed. The unemployment rate in rural India increased to 8.03% from 6.62% in May, while in urban areas, the jobless rate eased to 7.30% in June from 8.21% a month ago.

Overall, employment shrank by 13 million to 390 million in June, against a gain of 8 million jobs in April and May, Vyas said. While around 13 million jobs were lost during the month, the count of the unemployed increased by only 3 million as the rest exited the labor force, Vyas wrote.

This shrinkage brought down labor force participation rate to 38.8%, against 40% in the preceding two months. While this drop in employment and an equally sharp deterioration in other labor market ratios were alarming, the jobs picture was not completely dire across the country, Vyas wrote.

He said that since monsoon rains were 32% below normal last month, it could have “slowed the deployment of labor into the fields.” Labor participation may improve as rainfall picks up in coming weeks, he added.

The agriculture sector shed nearly 8 million jobs in June, mostly connected to plantations, while crop cultivation added 4 million jobs, according to Vyas.

The data also pointed toward growing vulnerabilities for salaried workers with 2.5 million losing their jobs in June. The government shrunk the demand for armed forces while opportunities in private equity-funded new-world jobs have also started to shrink, Vyas wrote.

Comment by Riaz Haq on July 30, 2022 at 3:51pm

Ex #RBI Gov R. Rajan: Turning #Muslims Into "2nd Class Citizens" Will Divide #India. Warning against majoritarianism, he cited #SriLanka as an example of what happens when politicians try to deflect a job crisis by targeting minorities. #Modi #Islamophobia https://www.ndtv.com/india-news/turning-minority-into-2nd-class-cit...

Former Reserve Bank of India Governor Raghuram Rajan on Saturday said India's future lies in strengthening liberal democracy and its institutions as it is essential for achieving economic growth.
Warning against majoritarianism, he said Sri Lanka was an example of what happens when a country's politicians try to deflect a job crisis by targeting minorities.

Speaking at the 5th conclave of All India Professionals Congress, a wing of the Congress party, in Raipur, he said any attempt to turn a large minority into "second class citizens" will divide the country.

Mr Rajan was speaking on the topic 'Why liberal democracy is needed for India's economic development'.

".What is happening to liberal democracy in this country and is it really that necessary for Indian development? ... We absolutely must strengthen it. There is a feeling among some quarters in India today that democracy holds back India ... India needs strong, even authoritarian, leadership with few checks and balances on it to grow and we seem to be drifting in this direction," Mr Rajan said.

"I believe this argument is totally wrong. It's based on an outdated model of development that emphasizes goods and capital, not people and ideas," said the former chief economist of the International Monetary Fund.

The under-performance of the country in terms of economic growth "seems to indicate the path we are going on needs rethinking," he said.

The former RBI governor further said that "our future lies in strengthening our liberal democracy and its institutions, not weakening them, and this is in fact essential for our growth."

Elaborating on why majoritarian authoritarianism must be defeated, he said any attempt to "make second class citizens of a large minority will divide the country and create internal resentment." It will also make the country vulnerable to foreign meddling, Me Rajan added.

Referring to the ongoing crisis in Sri Lanka, he said the island nation was seeing the "consequences when a country's politicians try to deflect from the inability to create jobs by attacking a minority." This does not lead to any good, he said.

Liberalism was not an entire religion and the essence of every major religion was to seek out that which is good in everyone, which, in many ways, was also the essence of liberal democracy, Mr Rajan said.

Claiming that India's slow growth was not just due to the COVID-19 pandemic, Mr Rajan said the country's underperformance predated it.

"Indeed for about a decade, probably since the onset of the global financial crisis, we haven't been doing as well as we could. The key measure of this underperformance is our inability to create the good jobs that our youth need," the former RBI governor said.

Comment by Riaz Haq on July 30, 2022 at 3:52pm

Ex #RBI Gov R. Rajan: Turning #Muslims Into "2nd Class Citizens" Will Divide #India. Warning against majoritarianism, he cited #SriLanka as an example of what happens when politicians try to deflect a job crisis by targeting minorities. #Modi #Islamophobia https://www.ndtv.com/india-news/turning-minority-into-2nd-class-cit...

Citing the strident protests against the Centre's 'Agniveer' military recruitment scheme, Mr Rajan said it suggested how hungry the youths were for jobs.

"Just a while ago you saw 12.5 million applicants for 35,000 railway jobs. It is particularly worrisome when India has a scarcity of jobs even when so many women are not working outside their homes. India's female labour force participation is among the lowest in G-20 at 20.3 percent as in 2019," he pointed out.

Talking about the "vision of growth" of the current government led by Prime Minister Narendra Modi, he said it centres around the term 'atmanirbhar' or self-reliance.

"Now, to the extent it emphasizes better connectivity, better logistics, better roads and devotes more resources to it, in some way this (atmanirbhar vision) seems the continuation of the past reformed decades. And that's good," he said.

But, the former RBI governor said, in many ways a look at what 'atmanirbhar' is trying to achieve takes one back to an early and failed past where the focus was on physical capital and not human capital, on protection and subsidies and not on liberalization, on choosing favourites to win rather than letting the most capable succeed.

Asserting that there was a misplaced sense of priorities, Mr Rajan said the nation was not spending enough on education, with tragic consequences.

"Many (children) not having been to school for two years are dropping out. Their human capital, which is their and our most important asset in the coming years, is something we are neglecting. We are failing them by not devoting enough resources to remedial education," Mr Rajan said.

Comment by Riaz Haq on July 30, 2022 at 6:04pm

Kaushik Basu
@kaushikcbasu
IMF's just-released World Economic Outlook shows, over 3 years, 2020-2, India's annual growth is 2.9%, behind China (4.5%) & low-income country average (3.1%). This is not where India was; its economy has enough strength. This is the price of divisive politics & erosion of trust.

https://twitter.com/kaushikcbasu/status/1552926615662985216?s=20&am...

Comment by Riaz Haq on August 1, 2022 at 8:31am

India is experiencing a job market crisis. Applicants for preferred jobs outnumber vacancies by numbers that make the process a lottery. The qualifications of applicants for many jobs far exceed the skills or knowledge required. Attempts to influence or rig the appointments process to monetise scarcity are common. And the response to perceived malpractice or suspect policy shifts can be violent, as recently seen in the case of appointments to the railways and the military.

https://frontline.thehindu.com/columns/economic-perspectives-the-jo...

The argument that the same crisis afflicts most market economies, including many developed ones, mitigates for some people the disquiet the crisis should evoke. What is missed is that the nature and intensity of the jobs crisis is not similar across the board. India seems especially hard hit. What is more, a rather expansive definition of what constitutes employment and the varying definitions adopted by different sources make the picture fuzzy and lead to an underestimation of the problem.

Disturbing ‘facts’
The stylised “facts” the available data yield are, however, disturbing enough. Despite questions regarding method and coverage, the National Statistical Organisation’s annual Periodic Labour Force Survey (PLFS) is the best source of information on employment and unemployment trends. According to the latest report, 7.5 per cent of the labour force was unemployed in 2020-21 (July to June), even when a person is defined as employed if he/she worked for at least one hour on at least one day during the seven days preceding the date of survey (current weekly status).

Comment by Riaz Haq on August 1, 2022 at 8:32am

India Jobs Crisis

https://frontline.thehindu.com/columns/economic-perspectives-the-jo...

With about 40 per cent of India’s 1.41 billion population in the labour force, this implies that about 42 million people who were available for work were not employed. If computed on a usual status basis (or based on the activity of a person for a relatively long time in the 365 days preceding the date of survey), the unemployment rate fell to 4.2 per cent. That amounts to around 25 million unemployed on a usual status basis. Around 21 million of these unemployed people were in the 15-29 years age group. The crisis is not of absent jobs in general but of employment among the youth in particular. A youthful population swells the number in the age group where people are capable of and wanting to work. But they find it difficult to get into the workforce.

The PLFS is the more recent version of the government’s effort to track the employment and unemployment situation in the country. Before 2017-18, the official statistical system undertook detailed surveys of the employment situation once in five years. On the grounds that an annual assessment was needed for effective policymaking, which has been a complete failure when it comes to employment generation, the government has carried out the PLF surveys since 2017-18. They yield quarterly and annual estimates. Annual estimates are as of now available for the four years ending 2020-21. Since results from these surveys can be compared, the government has taken credit for the apparent rise in employment over these four years when the labour force participation rate rose from 35.9 to 39.2 per cent and the unemployment rate declined from 8.9 to 7.5 per cent on a current weekly status basis. The corresponding figures for usual status employment were labour force participation rates of 36.9 per cent to 41.6 per cent and unemployment rates of 6.1 and 4.2 per cent. The aggregate figures do seem to point to an improvement, however marginal, on the employment front.

This improvement may seem surprising because of the well-recognised adverse employment generation consequences of India’s development path and the policy moves that have made a bad situation worse. Among the many features of the development path that determined employment outcomes, three in particular are worth noting. The first is that the non-agricultural sector has proved incapable of absorbing, at least in decent jobs, the multitudes that have had to move out of agriculture because it could no longer serve as the sink for a growing volume of the unemployed.

Comment by Riaz Haq on August 1, 2022 at 8:32am

India Jobs Crisis

https://frontline.thehindu.com/columns/economic-perspectives-the-jo...

The second is that manufacturing growth has been so disappointing that the structural transition away from agriculture to manufacturing in terms of shares in total GDP and employment, expected in the early stages of development, has remained incomplete in India. The slow growth of manufacturing meant that the much-needed shift in employment and worker distribution away from low-productivity agriculture to high-productivity manufacturing, which could ensure decent non-agricultural employment, did not occur.

And finally, although construction and services proved to be the much-needed outlets for India’s excess labour force, they proved inadequate to the task of making up for the shortfall in manufacturing. This is especially so because the more dynamic, modern services (including software and information technology–enabled services) have been characterised by a revenue growth that is much faster than employment growth, resulting in lagging employment generation even in India’s high-growth years led by a services boom. Workers must settle wherever jobs are available, irrespective of pay and the conditions of work.

One consequence of these trends is that “regular” and “formal” employment—or employment that is based on a formal contract, offers a degree of security of tenure, includes paid leave, and is associated with some form of social protection—is more the exception than the rule. In 2020-21, only 21 per cent of those employed were in regular employment. Another 23 per cent were engaged as casual labourers. The remaining 56 per cent were “self-employed”. For most of these workers, being at work does not mean being employed for most of the days or hours a person is available for work. A range of indicators captures the poor quality of even the employment afforded to most workers. Around 64 per cent of regular workers had no written job contract, 48 per cent were not eligible for paid leave, and 54 per cent were not eligible for any social protection. Regular male workers in all occupational categories, who are paid much more than female workers, earned on average between Rs.18,238 and Rs.19,103 over 30 days in 2020-21, or around Rs.608-637 a day.

Comment by Riaz Haq on August 1, 2022 at 8:33am

India Jobs Crisis

https://frontline.thehindu.com/columns/economic-perspectives-the-jo...

Despite the extreme inequality that characterises the country, that average for the population as a whole is just around two and a half times the income that supports a family at the official poverty line. The corresponding figures for the self-employed were Rs.11,184–11,976, or Rs.373–399 a day. The average daily earnings of a casual worker, when employed, varied between Rs.311 and Rs.327. What is more, in real terms, or after having adjusted for inflation, these earnings declined between 2017-18 and 2020-21.

The difficulty of finding even a half decent job has discouraged many from seeking work and kept them out of the labour force. The labour force participation rates in India of 58 per cent for men and 25 per cent for women in 2020-21 are striking for two reasons: first, they are extremely low by global and even South Asian standards (excluding Afghanistan and Pakistan), and second, the participation rates for women, who are forced by patriarchal norms to focus on unpaid household work, are appallingly low. Given the absolute levels of female participation rates, the evidence that it rose from 17.5 per cent in 2017-18 to 25.1 per cent in 2020-21 is no cause to celebrate. In fact, as argued below, this is likely the result of household distress.

During the years when the annual labour force surveys were conducted and published (2017-18; 2020-21), the Indian economy moved out of its high-growth trajectory, which meant that the poor job-generation record resulting from the weak relationship between output growth and employment growth was made worse by the slowdown in GDP growth. This was aggravated by three “external” factors that devastated the economy during these years.

The first is the damage wrought by demonetisation, which shrank economic activity and led to closures of firms and loss of livelihoods. The second is the badly designed and poorly implemented goods and services tax, which both imposed compliance costs and set operational constraints on economic agents with attendant adverse impacts on both production and incomes. The third is the COVID-19 pandemic and the government’s handling of it, characterised by brutal lockdowns and measly stimulus measures, which too severely damaged economic activity and livelihoods. All these shocks affected more severely the “informal” sector, which is where the majority of working Indians are employed.

Question of survival
Given these long- and short-term trends, it may appear surprising that the PLFS figures for the four years ending 2020-21 point to an increase in the number of workers and a fall in the unemployment rate. However, those trends may be in keeping with what one should expect in a period when growth has been slowing and economic shocks have devastated large sections of the working poor. In a context in which social security or social protection is more the exception than the rule, an unemployed person must, for survival, rely as a dependent on an already underpaid earning member of the family. That option being absent, she or he can only starve. When economic conditions worsen, as they clearly have over the last four years, the ability of earning members to support dependents is considerably eroded. The only option then is for every able person to seek out whatever work is available for however many days even if the terms are poor.

Comment by Riaz Haq on August 1, 2022 at 8:33am

India Jobs Crisis

https://frontline.thehindu.com/columns/economic-perspectives-the-jo...

This implies that in difficult times “distress employment” will rise, inflating the figures on those reported as being in the workforce and of those employed, when identified using the rather weak definitions adopted in the employment surveys. This is corroborated by the fact that much of the increase in employment over these four years is of female employment and employment in agriculture. A corollary of this distress-driven turn to any available job is a rise in labour force participation and in the number of workers and a fall in the unemployment rate. This is what seems to be happening in recent years. A similar tendency was observed over 1999-2000 to 2004-05—which was a period of extreme distress—when total employment as measured by the National Sample Surveys registered an increase of around 60 million.

What this implies is that using aggregate employment and unemployment numbers to assess intertemporal changes in the employment situation in the country is not warranted. “Improvements” in the number of people employed and the extent of unemployment could be as much a reflection of distress as they could be of advance; it all depends on the economic circumstances. What is clear as far as the Indian labour market is concerned is that the years of high growth have done little to improve a dismal employment picture, and the conditions of work only deteriorated after those heady growth days came to end. The jobs crisis is real.

Comment by Riaz Haq on August 28, 2022 at 5:18pm

https://theprint.in/opinion/not-just-global-hunger-index-indias-own...

Not just Global Hunger Index, India’s own govt data shows how worried we should be
The Modi government has questioned the methodology of the Global Hunger Index. But undernutrition is one of the leading factors of child mortality in India. https://theprint.in/opinion/not-just-global-hunger-index-indias-own...

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