India’s young and growing population requires massive job creation. It also demands good quality job, which alone would meet their aspirations. Therefore, it is quite normal for the state of employment or unemployment to be a much-debated topic in India. However, this much-needed debate is constrained by three realities.

• First, that around 80 percent of employment is in the unorganised sector, which is, by its very nature difficult to measure.
• Second, the efforts by the current government for promoting the new economy have opened up several additional employment opportunities in the unorganized sector. These are also not captured in any official data estimates.
• Third, it is quite evident that the quality of jobs on offer and the remuneration packages available for new employment is often not in sync with the aspirations of our young jobseekers.

India’s economy is on a balanced growth trajectory which needs to be maintained in the coming years by providing jobs to the country’s growing youth population. As per India’s recent population growth rates, about 10-12 million people enter the job market every year. Given the low female labour force participation of 27-30 per cent (which is a matter of concern) the total number of jobseekers per year comes to around 8 million. This, in itself, is a formidable number for fresh job creation. Our argument is that current data, which is available, points rather unmistakably to the fact that the economy has generated sufficient number of employment opportunities to absorb these additions to the workforce. However, this still does not perhaps take care of the massive backlog of unemployed youth from earlier years.

Credible Employment Data:

• The current discussion on increase or decline in employment in India is pranged by the lack of credible data.
• The Employment-Unemployment survey conducted by National Sample Survey Office (NSSO), MOSPI (Ministry of Statistics and Programme Implementation) is the most comprehensive survey providing complete labour force scenario of India across sectors like agriculture, Industry, services, etc. in both rural and urban areas. This was last conducted for the fiscal year 2011-12. Thus, as we can clearly see, the data is more than six-years old.
• The Annual Labour Survey by the Labour Bureau was last conducted for 2015-16. Hence, there is no credible data on employment for the last 3-4 years.
• Labour Bureau’s most recent Quarterly Employment Survey, which has the most recent results for the third quarter of 2017, covers only 8 sectors, which cover less than 15 per cent of the economy and would not ideally reflect the job situation in the country.

Employment Data:

• Over the last two year, the void in government employment data has been filled by the (Centre for Monitoring Indian Economy) CMIE-BSE producing triannual employment reports.
• CMIE data is fraught with all kinds of problems which render it quite undependable for example, CMIE data show female labour participation rates dropping from 26.4 per cent in 2014 to 11.7 per cent in 2017. Such a steep decline in female LFP rate is simply inconceivable. Such discrepancies render the CMIE data and their employment/unemployment estimates to be quite unreliable.
• Given the huge data gaps, a taskforce headed by former Vice Chairman NITI Aayog, Professor Arvind Panagariya, was formed to review the scenario of employment data in India in 2017. The taskforce recommended yearly survey on employment data in July 2017. The first report of the NSSO household survey on employment is expected to be released in the first half of 2019.

Employment Generation – Estimates:

Payroll Reporting:  

• For the first time in India, there is an effort towards payroll reporting, which measures the number of formal jobs and its increase on a monthly basis.
• As per the EPFO (Employee Provident Fund Organisation) payroll data across India’s formal sector, 41 lakh formal jobs were created form September 2017 to April 2018.
• While the formal sector is covered through payroll reporting the unorganised sector too has many success stories to report on the new type of employment which has seen a recent growing trend as discussed below.

Unorganised Sector:

• The new economy has created membership-based employment like driver partners in Ola/Uber or delivery professional in companies like Flipkart/Amazon/Snap deal or professional home service aggregators like Urban Clap/Quikr Services etc.
• These professional are different from the formal employees who work in these companies and are, therefore, not covered in any official or informal employment estimates.
• Just the cab business has created more than 2.2 million employments over the last four years.
• Services like UrbanClap and Quikr Services individually have more than 2.5 million professionals registered on their portals offering services across the large metro cities.
• Chartered accountants (CA), Company Secretaries (CS), lawyers and other professionals who join the work force each year, at least in thousands, also employ additional people as assistants and other service providers. These numbers are also not accounted for anywhere. They will further add to the number of new jobs generated in the economy.
• None of those employed in the trucking industry are, to the best of knowledge, covered in any employment estimates. Similarly, auto rickshaw drivers or those working in the transport sector in peri-urban and rural areas are also not covered. Accounting for all those gainfully engaged in these informal service sectors could easily add more than 12-15 million employed persons in this sector alone.
• The story can be repeated for a number of other informal sectors like road side eateries, tourism related workers, those self-employed in rural mandis, haats and related vocations.

In short, unless better estimates of employment in these informal or uncovered sectors can be made, it would be quite misleading to come to any conclusion about the employment situation or extent of job creation in the last four years.

Self-Employment:

• Moreover, there is the aspect of self-employed persons whose numbers have quite clearly gone up significantly over the last four years.
• MUDRA loans started by the current government is one of the major schemes which is helping entrepreneurs towards self-employment and job creation across India.
• By adding the estimates given earlier, or jobs created in the informal services sector, we can safely conclude that the past four years have seen robust employment generation and demand for jobs has not lagged behind the supply of new entrants to the workforce.
• This demand-supply balance in the labour market is perhaps best reflected in the movement of real wage rate in the economy.
• All the peddling the narrative of jobless growth or unsatisfactory employment generation, must review their own methodology or at least hold their brief until NSSO releases its results based on household survey of employment.