The signal and the noise in India’s jobs data
The new subscribers to EPFO likely represent formalization of a section of the regular workforce rather than new additions to it
New Delhi: Ahead of the 2019 Lok Sabha elections, the jobs debate in India has heated up once again. Spokespersons of the National Democratic Alliance (NDA) claim the Indian economy has created an unprecedented number of jobs over the past couple of years. The opposition as well as some independent critics of the government claim that job creation has come to a virtual halt, and the past few years have witnessed “jobless growth”.
A Mint analysis based on a broad range of data sources suggests that the claims of jobless growth are exaggerated. However, the pace at which salaried or regular jobs are being added in the economy seems to be much slower than the pace at which such jobs were being generated even half a decade ago.
Data from the past two quinquennial employment surveys of the National Sample Survey Office (NSSO) show that between 2004-05 and 2011-12, the net annual addition to regular jobs was roughly two-and-a-half million. Between 2011-12 and 2016, the net annual addition to regular jobs slowed to roughly one-and-a-half million. Thus, the share of regular workers in the workforce went up significantly between 2004-05 and 2011-12 but has increased only marginally since then.
The 2016 data is based on the ICE 360° survey, a nationally representative sample of 61,000 households conducted by the independent not-for-profit organization People Research on India’s Consumer Economy (PRICE), headed by two of India’s best-known consumer economy experts, Rama Bijapurkar and Rajesh Shukla.
Data from the Annual Survey of Industries (ASI) and from corporate filings collated by the Centre for Monitoring Indian Economy (CMIE) shows a similar trend of slowing job creation in the organized sector. As chart 2 shows, corporate job growth declined sharply after 2011-12 and has recovered since then but the pace of recovery is still slower than what it was in the years leading up to 2011-12, as an earlier Plain Facts column had highlighted.
What’s more, the share of regular workers with some form of social security—those having either provident fund (PF)/pension or gratuity or healthcare/health insurance or maternity benefits—seems to have declined steadily over the past decade. Nearly half of all regular workers had access to some form of social security in 2004-05. That proportion fell to 45% in 2011-12 and declined further to 38% in 2016.
More than two-thirds of the salaried class lacked a written contract, and roughly two-thirds did not have provident fund/pension benefits in 2016, according to the ICE 360° survey.
The share of regular workers with PF benefits may have changed over the past couple of years though, with intense efforts by the Employees Provident Fund Organization (EPFO) to bring more subscribers under its net. The organization, which claims an active subscriber base of 60 million accounts, added more than 10 million accounts in the first half of 2017 under an amnesty scheme. Between September 2017 and February 2018, the EPFO added more than 3 million accounts, a recent data release showed. While these numbers have been cited as evidence of job growth, they are more likely evidence of increased penetration of social security benefits among the salaried class. Given that two-thirds of regular workers or roughly 54 million regular workers lacked access to PF benefits in 2016, it is likely that a fraction of them have now been provided such benefits. Our policymakers would do well not to confuse such noise with the signals about slow job growth emerging from a broad variety of sources.
They would also do well to pay attention to the distribution of such jobs. For instance, data from the quinquennial NSSO surveys show that the share of educated landed families in regular jobs was relatively low in 2004-05, and declined further in 2011-12.
The share of marginal and small landowners with at least a higher secondary or diploma degree in regular jobs was relatively higher than the share of medium and large landowners with the same qualifications in such jobs even though regular workers among large land-owners were more likely to have social security benefits. The lack of adequate regular jobs may be one reason behind the frustrations of the educated and landed sections of rural India, who took to the streets in states as varied as Maharashtra and Haryana to demand job quotas in recent years.
On balance, the different pieces of evidence do not paint a very rosy picture about job opportunities in the countryside, or indeed, in the country.
Tadit Kundu from Mumbai contributed to this story.
Udayan Rathore is a research associate at the Delhi-based research group Collaborative Research and Dissemination (CORD), and Pramit Bhattacharya is data editor at Mint.
This is the first of a three-part data journalism series on jobs in India.