Concealing the No Jobs, No Growth Record of the Modi Government

Vikas Rawal

THE post-liberalisation period is widely perceived to have been a period of jobless growth. Between 1999-2000 and 2011-12, proportion of men in the age-group 15 to 59 years who were gainfully employed declined from 84 per cent to 81 per cent. During the same period, proportion of women aged 15 to 59 years who were gainfully employed for at least some part of the year fell from 41 per cent to only 32 per cent. Although schemes like the MGNREGA provided some relief, decline in absorption of labour in agriculture and lack of employment creation in rest of the economy resulted in overall decline in availability of work. In particular, there was an 11 percentage point decline in work participation rate of rural women aged 15 to 59 years. While rural men increasingly migrated or commuted to urban areas for work, rural women disproportionately bore the burden of the decline in availability of employment in rural areas.

From a period of jobless growth under the previous government, Modi government has swiftly transformed India into a jobless and growth-less economy. Not only are the 10 million jobs that the ruling party had promised to create in three years are nowhere to be seen, workers today face an ever-deeper crisis of unemployment.

LACK OF GROWTH IN AGRICULTURE

Two consecutive years of drought in 2014-15 and 2015-16 resulted in widespread crop failures. While farmers were struggling to cope with losses, to make the matters worse, the central government decided to apply brakes on the increase in the minimum support prices. Over the last three years, under the Modi government, the minimum support price of common variety of paddy has increased by only 4.7 per cent per annum. In contrast, the minimum support price of common variety of paddy increased by 15.7 per cent per annum between 2004 and 2009 (the UPA-I years) and by 7 per cent per annum between 2009 and 2014 (the UPA-II years). Similarly, in the last two rabi seasons, the central government increased the minimum support price of wheat by an average of only 4.5 per cent per annum. In contrast, the MSP for wheat increased by 14.3 per cent per annum during the UPA-I years and 5.9 per cent per annum during the UPA-II years.

While droughts and low MSPs dealt a severe blow to the farm economy in the first two years of the Modi government, the third year brought demonetisation. While the kharif season saw record sowing in the wake of good monsoons after two years of drought, prime minister chose to announce demonetisation at a time when farmers were still selling the kharif crops or were in the process of procuring inputs for the rabi crops. With no cash in the rural economy, farm harvest prices for most kharif crops crashed. There were reports of farmers abandoning their produce, in particular, the perishable commodities, because of inability to recover even the cost of harvest and delivery. While field reports from across the country showed inability of farmers to buy inputs for the rabi crops, government tried to conceal the distress by claiming that demonetisation had not affected rabi sowing. But the impact of demonetisation on production in the rabi season has been there for everyone to see. While farm harvest prices crashed in the immediate aftermath of demonetisation, low production in the rabi season has meant that retail prices of some food commodities shot up skywards in the more recent period. Such fluctuations – of crashing farm harvest prices and then sky rocketing retail prices – are felt most strongly in perishable commodities like tomatoes.

The agrarian crisis caused by government’s apathy has resulted in great distress among the rural working people. Government’s own data show that there has been a sharp increase in suicides by farmers and rural workers. In 2015, the latest year for which official statistics from National Crime Records Bureau are available, 12602 farmers, 4595 agricultural workers and 23,779 other daily wage earners committed suicide in India. This means, on average, about 5 peasants and manual workers committed suicide in India every hour in 2015! This seems to have accelerated even further after demonetisation with reports of economic-distress-related suicides appearing in media every day.

Intense agrarian distress has given rise to farmer’s struggles for relief and debt waiver. Despite great mobilisations by farmers in many states – most notably in Tamil Nadu, Maharashtra, Madhya Pradesh, Rajasthan and Uttar Pradesh – central government and BJP-led state governments have done little to provide relief.

INDUSTRIAL STAGNATION

Demonetisation, and more recently implementation of a distorted GST, have also severely impacted other sectors of the economy. Both the organised and the unorganised industrial sectors are today facing the worst crisis and government’s call to Make in India sounds like a cruel joke. The index of industrial production, used to track monthly growth of industrial output, has been stagnant at around 120 points since December 2015.

CONCEALING THE FAILURE OF ECONOMIC POLICIES

The Indian statistical system, by far among the best in less-developed countries, has often turned out to be an inconvenient thorn for the policy makers. While meddling with statistics to conceal failures of economic policy or to falsely project development outcomes has not been uncommon in the past, some of the recent decisions of the Modi government are likely to have far reaching consequences.

In May, Modi government established a task force ostensibly to introduce a system of reliable employment data. This task force, headed by Arvind Panagariya, has recommended that the Surveys on Employment and Unemployment conducted by the National Sample Survey Office (NSSO) and Annual Surveys of Industries (ASI) conducted by the Central Statistical Organisation (CSO) be discontinued. NSSO’s Employment Unemployment Surveys are sought to be replaced by a much trimmed down annual survey under the name of Periodic Labour Force Survey and the Annual Survey of Industry is sought to be replaced by a survey using GSTN (Goods and Services Tax Network) as the sampling frame.

These two sources of data have been most important for exposing the hollow claims of development under the neoliberal policy regime.

Employment Unemployment surveys conducted by the National Sample Survey Office have consistently laid bare the untruth of employment generation in the post-reform period. While there is always scope for improving the design and implementation of large-scale surveys, there is no doubt that the NSSO’s Employment Unemployment Surveys stand as the very best surveys of its kind conducted anywhere in the developing world. These surveys have used the finest statistical methods to measure conditions of unemployment and under-employment in a country where a predominantly large share of workforce is informally employed with frequent changes in their conditions of employment. In particular, the surveys covered a large sample of households surveyed at different points of time during the year to capture seasonality. These surveys used a combination of employment measures using the activity status over a year prior to the day of the survey and activity status over the week prior to the date of the survey to capture conditions of underemployment in the context of a predominantly informal labour market. Conducted in the same year as the consumer expenditure surveys, these surveys have facilitated a simultaneous assessment of conditions of poverty and unemployment. These surveys also provided detailed information on participation of people in public employment generation programmes and have been used to call into question claims of employment generation in programmes like the NREGA. Surveys of employment and unemployment also collected detailed data on activities of women who report themselves to be engaged primarily in housework, and showed that a vast majority of such women are engaged in activities that involve acquiring goods of economic value for the household. For example, the data show that the proportion of unemployed rural women of 15-59 years of age who are engaged in collection of food, fodder and fuel increased between 1999-2000 and 2011-12.

Similarly, data from the Annual Surveys of Industry conducted by the Central Statistical Office (CSO) have been regularly used by scholars to question claims that the policies of liberalisation and globalisation are unleashing animal spirits of private investors and creating the basis for economic growth. These data have shown that the growth of output, value added and, even more strikingly, employment in the organised manufacturing sector have been rather sluggish during the post-reform period.

Given this, it is clear that the decision to trim the surveys of industry and of employment conditions is nothing but an attempt to prevent use of these statistics for questioning the present government for its failure to revive the growth of economic activities and employment generation in the economy. There is no doubt that, unless reversed, these decisions would have far reaching consequences in limiting our ability to study economic conditions of working people and question the governments for their failure in improving these.

 

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