Selling pakodas is not employment

Answering a question on employment during an interview with Zee TV telecast on Jan 20, 2018, Prime Minister Narendra Modi asked, "If someone opens a 'pakoda' shop in front of your office, takes home Rs 200 at the end of the day, does that not count at employment?"

• The fact that the prime minister actually celebrates this kind of ’employment’ as a major success of his Mudra scheme is even more worrisome.
• Earning a meagre Rs 200 a day may come as solace to an unemployed person, the government must acknowledge that it only reflects under-employment and these earnings are just not enough to live life with dignity.
• Niti Aayog noted that “not unemployment, but severe under-employment is the main problem facing the country” and that “what is needed is the creation of high-productivity, high-wage jobs”. Prime Minister himself heads Niti Aayog.
• 90% of the Mudra scheme loans to over 10 crore beneficiaries in last three years were under the ‘Shishu’ category averaging Rs 43,000. With such a low degree of investment provided to nearly nine crore Indians, the employment opportunities can hardly be of high value.
• Banks reported a 47% increase in non-performing education loans between March 2015 and March 2017 and the bad loans have doubled. The defaults in education loans are a direct result of poor availability of good jobs. 
• In equating the success of low-value Mudra loan disbursement with generation of employment, the prime minister has sought to shift the goalpost on employment creation.
• The failure of the flagship programmes i.e. Start Up India, Stand Up India and Make in India schemes has forced the prime minister to yet again shift the goal post. The objective and success of the government is no more in addressing the concerns of an aspiring India, but to provide meagre income enough to earn ‘do waqt ki roti’. For an individual who is unemployed due to any reason, be it demonetisation or global distress or lack of adequate manufacturing and agricultural growth, any income that sustains his daily meals may be a matter of solace. But the prime minister of India cannot and should not take pride in it.

Under-employment is accompanied with the economic costs of social and family distress, health problems, impact on education etc – the head of the government cannot be oblivious to this. His vision has to accommodate the economic costs of under-employment. He does not have the luxury of looking at the economy only from the view point of a common unemployed citizen. That’s why the success of Mudra does not automatically translate into success for India’s economy and is why earning 200 rupees a day by selling pakodas cannot be considered a happy state of affairs.

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70 lakhs jobs in 2017 - a blatant bluff

Prof Pulak Ghosh and Dr Soumya Kanti Ghosh created a minor storm when they claimed that 70 lakh new ‘payroll’ jobs will be created in India in the organised sector in 2017-18. They reported that the EPFO manages a corpus of over Rs 11 lakh crore for its 550 lakh subscribers. According to the authors, 45.4 lakh new subscribers in the age band 18-25 years had enrolled under the EPFO in 2016-17 and started making their monthly contributions to the Fund. They also found that 36.8 lakh new subscribers in the same age band had enrolled between April and November 2017 and, therefore, they estimated that, for the full year 2017-18, 55.2 lakh new subscribers would be enrolled.

• Seventy lakh new jobs is a claim that will take one’s breath away. The total ‘payroll’ stock as on March 31, 2017, was 919 lakh. It has taken the country 70 years to create a ‘payroll’ stock of 919 lakh jobs but, miraculously, in just 12 months, the country will generate 70 lakh new ‘payroll’ jobs — that is nearly 7.5 per cent of the current stock!
• By comparison, China with a GDP five times that of India, adds about 150 lakh jobs a year.
• If organised sector that employs 20 or more persons can generate 55 lakh new jobs in a year that qualified for enrollment under the EPFO, then we can declare that India has truly and comprehensively slain the demon of unemployment!
• If we assume that for every ‘payroll’ job counted by the authors there will be another job created in the informal sectors, then the count will rise to 140 lakh in 2017-18. According to the Ghoshs’ report, 150 lakh persons enter the labour force every year of which 66 lakh is skilled manpower. Soon, the problem will not be joblessness but lack of jobseekers!
• The authors also pointed out that the limited data available in the public domain indicated that the number of contributing members in the EPFO grew by 7% in 2014-15 and 8% in 2015-16 but, according to the Ghoshs’ report, the number jumped by 20% in 2016-17 and by a further 23% up to December 2017.
• The EPFO data indicates that the number of contributing members decreased from 4.62 crore in July to 4.38 crore in September this year (2017).
• The PM Modi referred to the MUDRA scheme and said “over 31 million loans have been sanctioned to entrepreneurs. Even if conservatively each enterprise creates one sustainable job, this initiative itself amounts to 31 million new jobs.” Alas!
• It seems Modi is intentionally confusing by mixing up self employment' as jobs and misleading. While a 'job' is certain, regular and reasonably secure, self employment is not. What we are talking about is jobs in formal sector.
• If we equate self employed, under employed and casual employed as job holders, then there is neither unemployment nor joblessness.
• Labour participation rate is a ratio of all adults willing to work, whether employed or unemployed, to the total population. This ratio was 48% in Jan 2016. It fell to below 45% in Nov 2016. Now it reached 43% in July 2017. Most Indians choose not to work. Low labour participation rate hinders economic growth. Labour participation rate in China is 71%. The world average is 63%. Other major countries are Indonesia with a labour participation rate of 67%, Pakistan (54%), Nigeria (56%), Bangladesh (62%) and Philippines (65%).
• The 70 lakh jobs claim, as claimed by Modi, is not only a misleading boast but also a blatant bluff.

PM Modi’s recent assertion that a person earning Rs 200 a day by selling pakodas is also employed. The fact that the prime minister actually celebrates this kind of ’employment’ as a major success of his Mudra scheme is even more worrisome. It is not a pride that millions are managing to eke out a meagre income. Instead it should be seen as a sign of under-employment.

India is witnessing jobless economic growth during the past three years and the government doesn't know how to create jobs and hence making all false claims and propaganda. Demonetization and GST's faulty roll out have had destroyed informal sector employment. MNREGA was able to provide just 50 days of work against guarantee of 100 days. Mudra loans aimed at promoting  micro enterprises averaging Rs.43,000 is just useless and serves very little purpose. We all know that politicians speak lies, nothing but lies but we do expect Prime Minister to be truthful to the nation.