Employment: The Truth Behind Modi’s Lies
March 22, 2019
The Modi govt.’s disastrous economic policies have pushed India into a furnace of joblessness. Latest CMIE data shows that the unemployment rate in India was 8.6% in the first week of February 2019. This is the highest level since September 2016, that is, in 127 weeks. In February, a report prepared by the NSSO was leaked by a newspaper which showed that the unemployment rate in 2017-18 had hit a 45-year high of 6.1%. Although the National Statistical Commission chairman and another member asserted that the report was final and should have been released, the govt has refused to do so, thus revealing its desperate attempts to hide the truth about unemployment.
Last year, CMIE had reported that youth unemployment was at a staggering 32% while women’s unemployment rate was 14%. This level of joblessness has destroyed families’ budgets and pushed lakhs into poverty. One dire result of this joblessness and insecurity is that wages have stagnated and more and more people are working for less and less wages, often working extra hours just to survive.
CMIE estimates show that 1.1 crore jobs were lost in 2018 itself. The 2016 notebandi and the subsequent GST imposition destroyed the small scale and informal sectors causing lakhs of jobs to be lost. Dilution of labour laws, fixed term employment and such other policies have added to relentless loss of jobs. It is forcing people to migrate to other places in search of jobs. It is snatching away food from babies’ mouths and medicines from the sick.
Yet, Prime Minister Modi, his ministers and other BJP leaders continue to maintain the fiction of job creation. In his speech in Parliament during Budget Session, Modi arrogantly maintained that his govt. had created crores of jobs. He quoted figures from provident fund scheme and pension scheme enrolment, as also numbers of doctors, chartered accountants, lawyers and truck or bus operators, and hotels, to claim that crores of jobs were added. Here is a look at what Modi claimed and why it is untrue.
#1 – PF Enrolment is New Jobs
Modi said that between September 2017 and November 2018, 1.8 crore persons started contributing to EPF for the first time. Out of these 1.8 crore, 65 lakh were below the age of 28 years. He added that enrolment in the pension scheme (NPS) increased from 65 lakh in March 2014 to 1.2 crore in October 2018.
There are two fallacies in this:
1. The latest data, available on EPFO website, does shows that nearly 1.8 crore people enrolled in the scheme between September 2017 and November 2018 but about 1.4 crore persons quit the scheme! It even gives the number of persons (33 lakh) who quit but rejoined. [See Table below] Modi is quoting the new joining numbers and claiming that these are new job entrants. But what about those who are quitting? By his logic they should be becoming jobless!
EPFO- The Real Numbers( Sept 2017-Nove 2018)
1 New Members 179 Lakh
2 Members Quit 139 Lakh
3 Members Rejoined 34 Lakh
4 Net (1+3-2) 74 Lakh
2. The truth is that joining the EPF scheme does not mean that a worker has got a fresh job for the first time. He or she may have been working in some other job elsewhere before getting this job. Or, even more likely, he or she would have been working on the same job and the employer was not giving them the right to EPF coverage till now. Here, it should be recalled that Modi has launched a new scheme called PM Rozgar Protsahan Yojana (PMRPY), which subsidises employers for enrolling employees in EPF scheme by paying the employers’ share of PF and NPS contribution (12%). This has prompted many erring employers to enrol their workers in the EPF scheme just to get benefits of the subsidy. According to replies given to Parliament questions, Rs.2871 crore have been given to 1.14 lakh enterprises as subsidy under the PMRPY. It is quite likely that cunning employers are simply rotating their employees in and out of the scheme so that they can gobble up the subsidy. There is no new jobs being created – it is just an illusion.
The same applies to enrolment in the pension scheme. There is no proof that those enrolled were fresh entrants in the job market.
#2 Professionals Are New Jobs
Modi claimed that 6.35 lakh new professionals like doctors were added to the category of non-corporate tax payers implying that these are new jobs. All those who start paying tax are not new job entrants. And, even if this was the case, the total number of such jobs adds up to 6.35 lakh in nearly five years. That means, about 1.2 lakh jobs every year! This trend was there even before Modi came to power. There is nothing new in this. And, if you really think about it, it exhibits a rather pathetic record in job creation even for the well-to-do middle class.
#3 Transport Sector Has Created Jobs
Modi claimed that since 2014, 36 lakh new trucks or commercial vehicles, 1.5 crore passenger vehicles and 27 lakh autos have been purchased. On this basis, he said that 1.25 cr jobs have been created in the transport sector. Transport experts say that Modi govt.’s policy of imposing ban on 10-year and 15-year old vehicles has led to increase in sales in the automobile sector which was otherwise deep in crisis. However, the new vehicles are giving jobs mostly to drivers, cleaners, conductors or mechanics who were working with older vehicles earlier. Is there any record or proof that those persons who are driving these new vehicles were doing nothing before that? There is none. Maybe they were driving old vehicles, maybe they were working in the fields or as manual labourers or in some office. There is no reason to believe that they are getting a job for the first time. Yet Modi uses this trickery to befool people.
#4 Tourism Has Created Jobs
Modi claimed that there was a 50% hike in approval of hotels and went on to assert that 1.5 crore new jobs were created in the tourism sector. Again, the problem with this is – are they new jobs or are people moving from one job to another? Nobody knows, least of all Modi himself. Also, how many hotels have closed down – this also needs to be compared.
Incidentally, the recent fire in a Delhi hotel which killed 17 people, and the report that over 250 hotels in Delhi have no fire safety measures points to what 50% hike in new approvals can do.
#5 Mudra Loans Means New Jobs
Modi claimed that 4.25 crore “first timers” got loans but he clarified that there is no job data. He wants to imply that these are persons who got work for the first time. But just because somebody takes a loan for the first time, it doesn’t mean that he/she was starting to work for the first time! He/she could have been doing some other work earlier. In fact, Mudra loans do not indicate any job creation in itself. The amounts per loanee are too meagre to imagine this. According to the most recent data for 25 January (Rajya Sabha Question No. 170 and 189) a total of 15.74 crore persons have been given loans worth Rs. 7.35 lakh crore. Which works out to a mere Rs.46,702 per loanee. What can be expected to happen with this amount!
Meanwhile, there are reports that Mudra loans have been freely distributed without asking for any minimal details of the loanee and without any investigation by banks. In one case, CBI has raided a bank on this complaint. Some even suggest that BJP supporters have been mobilised and given loans.
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