India Can Hide Unemployment Data, but Not the Truth
The jobs situation may be even worse than was suspected.
Feb. 1, 2019
By Kaushik Basu
Mr. Basu is an economist.
Channi Anand/Associated Press
Channi Anand/Associated Press
India has a job crisis, and the government would rather you didn’t notice. Last month, it hastily amended the Constitution to set aside 10 percent of all government posts for the “economically weak.” But it defined the “economically weak” as anybody from a household earning less than 800,000 rupees, roughly $11,200, a year or owning a very tiny bit of land. And as the sociologist Sonalde Desai has argued, that covers about 95 percent of India’s population.
A quota that includes virtually everybody means little. But the new 10 percent quota is even worse than that: It contains a caveat that explicitly leaves out individuals belonging to India’s disadvantaged castes, who benefit from other affirmative action measures. That’s a little bit as if the United States government announced that it was reserving 10 percent of government jobs for all but the richest 5 percent of Americans, and African Americans need not apply.
How did India get to this point, especially on the watch of Prime Minister Narendra Modi, who came to power in 2014 partly on the back of promises to create more jobs? Back then, the manifesto of his Bharatiya Janata Party had called India’s labor force “the pillar of our growth.”
According to data released by the Labour Bureau, a wing of the Ministry of Labour and Employment, unemployment in 2013-14 was 4.9 percent. But an undisclosed study by the National Sample Survey Office (NSSO), a government agency that conducts large-scale research, has reportedly placed the figure for 2017-18 at 6.1 percent — a 45-year high.
Measuring employment is inherently difficult in India. One reason is that the standard definition of what constitutes work — being in regular employment for a certain number of hours and a regular salary — comes from industrialized nations. Yet according to various reports, more than 80 percent of Indians who are working or seeking work are in the informal sector, many of them doing odd jobs for multiple employers. Their activity is far more complicated for economists to measure accurately.
Making matters worse — and fueling speculation that the unemployment situation in India is even more dire than suspected — the government has withheld official data about jobs. The two members of the NSSO who were not government officials resigned this week, in protest over the decision to not release their office’s results even though those had been cleared for publication.
The other official source economists have traditionally turned to are the employment statistics of the Labour Bureau. The office had been releasing this data regularly for nearly a decade — until 2016, when the Labour Ministry suddenly decided todiscontinue the series.
This information blackout is uncharacteristic for India, which has been praised, including by the Nobel Prize-winning economist Angus Deaton, for playing a pioneering role, globally, in statistical data collection.
Now, analysts have to rely on other sources, indirect evidence and private studies.
The findings from those are alarming.
The Center for Monitoring the Indian Economy, a well-respected business information company that collects primary data on various aspects of the Indian economy, estimates that the country’s unemployment rate in December 2018 reached 7.38 percent.
According to the “State of Working India 2018,” a large study conducted by the Center for Sustainable Employment at Azim Premji University, India’s youth unemployment now stands at 16 percent. Women hold just 16 percent of jobs in the service sector. In 2011, only 13 percent of senior officers, legislators and managers were women; by 2015, the figure had dropped to 7 percent.
Anecdotal evidence suggests that people are hurting. Early last year, Indian Railwaysadvertised about 89,400 new jobs. Government posts always are coveted in India — they mean job security and a decent salary — but more than 23 million adults appliedfor these positions, defying all expectations. Earlier this year, the secretariat of the government of Maharashtra, a state in west-central India, advertised 13 waiting jobs in its canteen. There were 7,000 applicants, many of them university graduates.
India’s growth rate remains robust, but the benefits of the country’s growth have been concentrated almost entirely at the top, with grim implications for the working classes and the lower-middle classes, women and the young.
These effects aren’t just the accidental results of the government’s decision, say, to ban certain currency bills in late 2016 (which proved to be terribly misguided) or to transform the indirect tax system into the new Goods and Services Tax (a move in the right direction but that was poorly executed and hurt small businesses). Inequality has grown, in numerous ways, a recent report indicates.
The Modi government’s economic policy has been disproportionately focused on a few big corporations, neglecting small firms and traders, the agricultural sector and most workers. The results are now showing.
Kaushik Basu, the C. Marks Professor of International Studies and professor of economics at Cornell University, was chief economic adviser to the Indian government in 2009-12 and chief economist of the World Bank in 2012-16.
Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram.
India's jobs crisis casts shadow over Modi's re-election hopes
Michael SafiLast modified on Fri 1 Feb 2019 18.55 EST
PM promised ‘good days are coming’ but figures show unemployment at 45-year high
India’s government has presented its final budget before this year’s national elections in the shadow of revelations that it has presided over India’s worst unemployment rate in 45 years – and tried to bury the statistics.
The weak jobs data, a financial crisis in the farming industry and declining confidence in the economy could threaten the re-election prospects of Narendra Modi, the prime minister, who campaigned five years ago on promises of putting India to work, with the slogan “Good days are coming”.
For years economists have said most Indians are under-employed and paid poorly for the work they do. Now a government survey obtained by India’s Business Standard newspaper shows that up to 6.1% are unable to find work at all.
Members of the government’s policy thinktank, Niti Aayog, said the data was from a draft report that had not been verified. The data was scheduled for release in December but was withheld, prompting the resignation of two members of the national statistics office this week.
Roughly a third of India’s unemployed are thought to be highly educated young people who have come of age hearing predictions of their country’s imminent rise to superpower status and have set their aspirations accordingly.
Sandeep Kumar Badal, who graduated with master’s degrees in Hindi and English in 2011, has spent the eight years since then picking up casual work as a tutor at an academic coaching centre in Hisar, a small city in north India’s Haryana state. This year he was one of 2 million people who applied for a few thousand low-level “peon” jobs in the state administration.
“Private jobs have no security,” said Badal, 33. “If tomorrow the place closes then I have no job. It has a very scary future compared with the government sector.”
He has just started working at a state college, where he files documents, fetches tea and takes orders from senior staff. “There are lecturers at the college with fewer qualifications than me,” he said. “I do not want this kind of job, but it is my destiny.”
The deep frustration among many segments of the Indian public is at odds with the country’s roaring GDP growth, the fastest of any major economy in the world.
“There is this illusion of India as the world’s biggest democracy on the path to becoming the world’s next economic superpower,” said Sabina Dewan, the founder of JustJobs Network, an employment policy thinktank. “If you take a look at the numbers and get past the GDP figures, you see there’s a huge jobs crisis that needs to be addressed urgently.”
For years, the problem was masked by low official unemployment rates. In a country as poor as India, unemployment can be a luxury. The poor find whatever work they can to survive.
“Say you have five men selling kitchen towels at a road intersection who work for a couple of hours a week,” said Dewan. “The way we collect labour market data … these people are showing up as employed when actually they are grossly underemployed.”
The growth that is driving India’s healthy GDP rate is mostly concentrated in capital-intensive industries such as software engineering. But tech companies are already creating fewer jobs than they have in the past, a trend that will accelerate with advances in automation and artificial intelligence.
Meanwhile, industries that could potentially create good jobs, such as manufacturing, are prevented from doing so by a “toxic cocktail” of factors, according to Goutam Das, the author of a new book, Jobonomics, about India’s employment woes.
He said businesses that want to grow find it hard to get loans from banks. Onerous land regulations hinder the building of new factories. Infrastructure such as roads leading to ports is poor. Most small companies are family-run and reluctant to give senior positions to outsiders, inhibiting their expansion.
Workers are less productive or skilled than they need to be, owing to decades of under-spending on the country’s education and health systems. And amid slow wage growth, many ask: why bother working any harder?
Modi’s sudden move in 2016 to demonetise the country’s two most valuable banknotes led to months of cash shortages from which the construction and farming industries are thought to be still recovering.
Das said the job problems were largely out of Modi’s direct control. “Actually the state governments are more important when it comes to job creation,” he said.
But voters are unlikely the forget the promises he made five years ago. “Modi won an economic mandate,” Das said. “If you look at his 2014 manifesto, jobs are mentioned more than a dozen times.”
Praveen Kumar, a master’s graduate in computer science and mathematics, said he had given up on the private sector after years of taking irregular tutoring jobs. “The workload is very high and in the end the salary isn’t worth it,” he said.
He has just secured a government job inspecting drains in Haryana state. It may be dull work for someone with his qualifications, he said, “but I can adjust to it”.
India’s Leader Is Accused of Hiding Unemployment Data Before Vote
Jan. 31, 2019
Unemployed teachers faced off with security officers during a demonstration in Amritsar, India, last week.Narinder Nanu/Agence France-Presse — Getty Images
Unemployed teachers faced off with security officers during a demonstration in Amritsar, India, last week.Narinder Nanu/Agence France-Presse — Getty Images
NEW DELHI — When voters swept Prime Minister Narendra Modi into power five years ago, it was in no small part because of his vows to create millions of jobs and vault India into an era of prosperity.
But now, just months before the next general election, Mr. Modi is facing a potentially troublesome challenge on the jobs promises that may be partly of his own making.
His government was accused on Thursday of suppressing an official report on the national unemployment rate that apparently showed it had reached a 45-year high in 2017.
The Business Standard, a respected Indian financial newspaper, published leaked findings from the unemployment report, which is based on a survey and produced by the National Sample Survey Office, a government agency.
There had been expectations that the report would be released in December. Two commissioners responsible for reviewing data in the report, who had advocated releasing it, resigned in protest this week.
Officials in Mr. Modi’s government scrambled on Thursday to blunt the impact of what amounted to withholding information that discredits the core of his economic record. The chairman of NITI Aayog, a government research organization, said the unemployment report was still in draft form, was not ready for dissemination and would be released in March. The response raised the possibility that the data could be revised.
But economists said the findings, if verified, were problematic for Mr. Modi, the dynamic prime minister whose popularity has always rested on his Hindu nationalism and promises to make India an economic powerhouse rivaling China.
While the leaked 2017 unemployment rate, 6.1 percent, may not sound so gloomy, it is roughly triple the rate of five years earlier, the last time a comparable national survey was conducted. And with India’s work force population of roughly 500 million, that translates into 30 million people who cannot find a job — including many of the 10 million to 12 million young people flooding into the labor market each year.
The rate also understates the true picture, partly because of the way India counts the number of employed. People who work irregularly — a couple of months on, a couple of months off — are considered employed unless they are jobless for a majority of the year.
“Poor people can’t afford to be unemployed for too long; after a while, they’ll usually take whatever job they can get,” said Himanshu, an associate professor of economics at Jawaharlal Nehru University in New Delhi who goes by only one name. “That’s why 6 percent is a really serious number.”
The report is a comprehensive look at the job consequences of two disruptive economic changes Mr. Modi imposed in the past few years.
First was his abrupt decision in November 2016 to eliminate most of the country’s cash currency in circulation. That decision, known as demonetization, was meant to crack down on illicit cash transactions, but the change was so hasty and hectic that it created acute shortages and inflicted enormous damage on large swaths of India’s economy.
Then in July 2017, Mr. Modi implemented a sweeping new single tax code, the Goods and Services Tax, known as the G.S.T., but enforcement of the change was so disorganized that economists say it crippled many small businesses.
The leaked unemployment report, if confirmed, undercuts a basic premise of Mr. Modi’s 2014 campaign: creating jobs for the country’s enormous and young work force. People under age 35 represent roughly two-thirds of the population of 1.35 billion, and, the thinking went, they would earn and spend, expanding and accelerating economic growth. The effects would help pull millions more out of poverty.
Prime Minister Narendra Modi, center, who once looked unbeatable, is now headed into a close election contest. Any bad news on jobs is likely to hurt him.Manish Swarup/Associated Press
Prime Minister Narendra Modi, center, who once looked unbeatable, is now headed into a close election contest. Any bad news on jobs is likely to hurt him.Manish Swarup/Associated Press
Opposition politicians seized on the leaked report as evidence that Mr. Modi and his ruling Bharatiya Janata Party were responsible for the worst unemployment rate since 1972-73, when the country was roiled by war with Pakistan and by the effects of global oil market shocks.
“NoMo Jobs!” Rahul Gandhi, the leader of the Indian National Congress, an opposition party, wrote on Twitter, adding that the “leaked job creation report card reveals a National Disaster.”
The leaked report compounded other recent signs of employment distress in India, including data from the All India Manufacturers’ Organization in December that said 3.5 million jobs had been lost since 2016.
A far more dire study, released Jan. 9 by the Center for Monitoring Indian Economy, a business information company in Mumbai, said 11 million jobs were lost in 2018 alone.
Mahesh Vyas, the company’s managing director, attributed the plunge largely to the “combined effects of demonetization and G.S.T.”
The leaked report came against the backdrop of preparations for national elections likely to be held by early May.
While Mr. Modi once looked unbeatable, recent polls have suggested he is heading into a more competitive race. Any bad news on employment figures could damage his prospects.
Employment is expected to be the single most important issue for voters this year, a new Times Now-VMR opinion poll has found.
Economists say it would be unfair to blame Mr. Modi’s government entirely for India’s unemployment trend, which predated his ascent to power. Less investment in the rural economy, disastrous droughts and struggles in Indian manufacturing also have contributed.
“This buildup has been going on for many years,’’ said Mr. Himanshu. “In fact, Modi came on the promise of providing jobs. But the situation has become worse in his period.”
While Mr. Gandhi, the scion of a long political dynasty, has been hammering the Indian government over its record on employment, Mr. Modi’s ministers were quick to defend the prime minister after the jobs report was leaked.
“This survey focuses mostly, I think, on the organized sector,” Raj Kumar Singh, the energy minister, told the independent broadcaster NDTV. “Our economy is growing at an unprecedented rate. That economy can’t grow without economic activity actually happening.’’
India’s economy has been growing at an annual rate of around 7 percent for several years, among the fastest of any major economy.
According to the Times Now-VMR poll, Mr. Modi remains the most trusted leader in the country. When asked who had the better plans for India, 44.4 percent of respondents chose Mr. Modi, compared with 29.9 percent for Mr. Gandhi.
The previous government, led by Mr. Gandhi’s party, was also uncomfortable releasing unemployment figures, which have always been a politically delicate issue. Still, said Mr. Himanshu, the economist, Mr. Modi and his aides seemed even more sensitive about them.
“They are trying to control the statistical system, and the government is obviously apprehensive of the data,” he said.
Follow Jeffrey Gettleman and Hari Kumar on Twitter: @gettleman and @HariNYT.
Rick Gladstone contributed reporting from New York.
A version of this article appears in print on Feb. 1, 2019, on Page A1 of the New York edition with the headline: India’s Leader Is Accused of Hiding Poor Jobs Data Before Vote. Order Reprints | Today’s Paper | Subscribe
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India’s job crisis is worse than people thought — and its government tried to squelch the data
Joanna Slater
February 1 at 7:36 AM
NEW DELHI — As Indians prepare to vote in national elections later this spring, one burning question has dominated the debate over Prime Minister Narendra Modi’s track record: Has he fulfilled his promise to create jobs for millions of people?
Anecdotal evidence suggests the answer is no: College graduates have been applying for menial jobs by the millions, and daily laborers report that work and wages are declining. A private survey recently showed that the number of people working shrank by 11 million in 2018.
But the government has insisted the jobs picture is healthy. Plus, some officials said, the gold standard of employment data in India is a nationwide survey conducted by the Ministry of Statistics. Until this week, those figures were a closely held secret.
Now that data has been leaked — and it’s bad.
According to a report first published in the Business Standard, an Indian financial newspaper, the nationwide unemployment rate rose to 6.1 percent in 2018, a 45-year high. It’s also nearly triple the jobless rate in 2012, the last time this type of survey was conducted.
The statistics on youth unemployment are even more striking. The jobless rate for young men in rural areas spiked to 17.7 percent since 2012. For young men in cities, it more than doubled, to 18.7 percent.
To say this is a political problem for the Modi government is an understatement. Modi was elected on promises of ushering in “achhe din” — good times — and rising unemployment is a major disadvantage in making his pitch for reelection.
On Friday, the Modi government used its last budget before the polls to offer an array of voter-pleasing measures, including tax breaks and income grants for poor farmers. Piyush Goyal, the minister who presented the budget, defended the government’s track record on job creation by citing a source that economists say is deficient and reflects only a fraction of the economy.
The bad news in the nationwide employment data is only one part of the problem: The government also tried to prevent such figures from becoming public. The jobs report was approved by India’s National Statistical Commission in December, according to its acting chairman. The normal procedure is that the data gets released five days later, said Pronab Sen, the country’s former chief statistician.
Weeks passed and the report did not appear. Then, earlier this week, two members of the statistical commission, including the chair, P.C. Mohanan, resigned in protest — an unprecedented move in India’s statistical community. (When contacted, Mohanan declined to comment.)
India’s government did not deny the accuracy of the job figures reported by the Business Standard. But senior officials at NITI Aayog, the policy-planning arm of the government, held a news conference where they said the leaked data was neither finalized nor comparable to earlier surveys.
Both claims are untrue, Sen said. The policy-planning arm “has absolutely no business in holding forth on the data,” which falls under the purview of the statistics ministry. “Frankly, in my opinion, it was bizarre.”
The furor over the jobs data adds to a broader sense of unease over the Modi government’s handling of statistics. Late last year it revised the way gross domestic product was calculated, to the disquiet of some economists. The updated figures downgraded the economy’s performance during the previous government and elevated it during the Modi years.
While India’s statistical apparatus is far from perfect, it had functioned relatively free of interference, Sen said, particularly with surveys that involve primary data collection, such as the employment survey. Now the “impression you’re giving to the world is that the data put out is the data the government wants put out.”
Meanwhile, the leaked employment data suggests that whoever wins the next election will continue to have a massive challenge ahead. Within two years, the number of people in India between the ages of 15 and 34 will reach nearly 500 million. The share of the working-age population is expected to continue growing for the next 15 to 20 years — a rare opportunity for any country to boost its economic development.
But rising joblessness among young people threatens that scenario.
“What this data tells us is that we’re basically squandering the demographic dividend,” said Radhicka Kapoor, an economist at the Indian Council for Research on International Economic Relations. “The problem that is staring us in the face is youth unemployment, and that’s what we need to address.”
The jobs situation may be even worse than was suspected.
Feb. 1, 2019
By Kaushik Basu
Mr. Basu is an economist.
Channi Anand/Associated Press
Channi Anand/Associated Press
India has a job crisis, and the government would rather you didn’t notice. Last month, it hastily amended the Constitution to set aside 10 percent of all government posts for the “economically weak.” But it defined the “economically weak” as anybody from a household earning less than 800,000 rupees, roughly $11,200, a year or owning a very tiny bit of land. And as the sociologist Sonalde Desai has argued, that covers about 95 percent of India’s population.
A quota that includes virtually everybody means little. But the new 10 percent quota is even worse than that: It contains a caveat that explicitly leaves out individuals belonging to India’s disadvantaged castes, who benefit from other affirmative action measures. That’s a little bit as if the United States government announced that it was reserving 10 percent of government jobs for all but the richest 5 percent of Americans, and African Americans need not apply.
How did India get to this point, especially on the watch of Prime Minister Narendra Modi, who came to power in 2014 partly on the back of promises to create more jobs? Back then, the manifesto of his Bharatiya Janata Party had called India’s labor force “the pillar of our growth.”
According to data released by the Labour Bureau, a wing of the Ministry of Labour and Employment, unemployment in 2013-14 was 4.9 percent. But an undisclosed study by the National Sample Survey Office (NSSO), a government agency that conducts large-scale research, has reportedly placed the figure for 2017-18 at 6.1 percent — a 45-year high.
Measuring employment is inherently difficult in India. One reason is that the standard definition of what constitutes work — being in regular employment for a certain number of hours and a regular salary — comes from industrialized nations. Yet according to various reports, more than 80 percent of Indians who are working or seeking work are in the informal sector, many of them doing odd jobs for multiple employers. Their activity is far more complicated for economists to measure accurately.
Making matters worse — and fueling speculation that the unemployment situation in India is even more dire than suspected — the government has withheld official data about jobs. The two members of the NSSO who were not government officials resigned this week, in protest over the decision to not release their office’s results even though those had been cleared for publication.
The other official source economists have traditionally turned to are the employment statistics of the Labour Bureau. The office had been releasing this data regularly for nearly a decade — until 2016, when the Labour Ministry suddenly decided todiscontinue the series.
This information blackout is uncharacteristic for India, which has been praised, including by the Nobel Prize-winning economist Angus Deaton, for playing a pioneering role, globally, in statistical data collection.
Now, analysts have to rely on other sources, indirect evidence and private studies.
The findings from those are alarming.
The Center for Monitoring the Indian Economy, a well-respected business information company that collects primary data on various aspects of the Indian economy, estimates that the country’s unemployment rate in December 2018 reached 7.38 percent.
According to the “State of Working India 2018,” a large study conducted by the Center for Sustainable Employment at Azim Premji University, India’s youth unemployment now stands at 16 percent. Women hold just 16 percent of jobs in the service sector. In 2011, only 13 percent of senior officers, legislators and managers were women; by 2015, the figure had dropped to 7 percent.
Anecdotal evidence suggests that people are hurting. Early last year, Indian Railwaysadvertised about 89,400 new jobs. Government posts always are coveted in India — they mean job security and a decent salary — but more than 23 million adults appliedfor these positions, defying all expectations. Earlier this year, the secretariat of the government of Maharashtra, a state in west-central India, advertised 13 waiting jobs in its canteen. There were 7,000 applicants, many of them university graduates.
India’s growth rate remains robust, but the benefits of the country’s growth have been concentrated almost entirely at the top, with grim implications for the working classes and the lower-middle classes, women and the young.
These effects aren’t just the accidental results of the government’s decision, say, to ban certain currency bills in late 2016 (which proved to be terribly misguided) or to transform the indirect tax system into the new Goods and Services Tax (a move in the right direction but that was poorly executed and hurt small businesses). Inequality has grown, in numerous ways, a recent report indicates.
The Modi government’s economic policy has been disproportionately focused on a few big corporations, neglecting small firms and traders, the agricultural sector and most workers. The results are now showing.
Kaushik Basu, the C. Marks Professor of International Studies and professor of economics at Cornell University, was chief economic adviser to the Indian government in 2009-12 and chief economist of the World Bank in 2012-16.
Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram.
India's jobs crisis casts shadow over Modi's re-election hopes
Michael SafiLast modified on Fri 1 Feb 2019 18.55 EST
PM promised ‘good days are coming’ but figures show unemployment at 45-year high
India’s government has presented its final budget before this year’s national elections in the shadow of revelations that it has presided over India’s worst unemployment rate in 45 years – and tried to bury the statistics.
The weak jobs data, a financial crisis in the farming industry and declining confidence in the economy could threaten the re-election prospects of Narendra Modi, the prime minister, who campaigned five years ago on promises of putting India to work, with the slogan “Good days are coming”.
For years economists have said most Indians are under-employed and paid poorly for the work they do. Now a government survey obtained by India’s Business Standard newspaper shows that up to 6.1% are unable to find work at all.
Members of the government’s policy thinktank, Niti Aayog, said the data was from a draft report that had not been verified. The data was scheduled for release in December but was withheld, prompting the resignation of two members of the national statistics office this week.
Roughly a third of India’s unemployed are thought to be highly educated young people who have come of age hearing predictions of their country’s imminent rise to superpower status and have set their aspirations accordingly.
Sandeep Kumar Badal, who graduated with master’s degrees in Hindi and English in 2011, has spent the eight years since then picking up casual work as a tutor at an academic coaching centre in Hisar, a small city in north India’s Haryana state. This year he was one of 2 million people who applied for a few thousand low-level “peon” jobs in the state administration.
“Private jobs have no security,” said Badal, 33. “If tomorrow the place closes then I have no job. It has a very scary future compared with the government sector.”
He has just started working at a state college, where he files documents, fetches tea and takes orders from senior staff. “There are lecturers at the college with fewer qualifications than me,” he said. “I do not want this kind of job, but it is my destiny.”
The deep frustration among many segments of the Indian public is at odds with the country’s roaring GDP growth, the fastest of any major economy in the world.
“There is this illusion of India as the world’s biggest democracy on the path to becoming the world’s next economic superpower,” said Sabina Dewan, the founder of JustJobs Network, an employment policy thinktank. “If you take a look at the numbers and get past the GDP figures, you see there’s a huge jobs crisis that needs to be addressed urgently.”
For years, the problem was masked by low official unemployment rates. In a country as poor as India, unemployment can be a luxury. The poor find whatever work they can to survive.
“Say you have five men selling kitchen towels at a road intersection who work for a couple of hours a week,” said Dewan. “The way we collect labour market data … these people are showing up as employed when actually they are grossly underemployed.”
The growth that is driving India’s healthy GDP rate is mostly concentrated in capital-intensive industries such as software engineering. But tech companies are already creating fewer jobs than they have in the past, a trend that will accelerate with advances in automation and artificial intelligence.
Meanwhile, industries that could potentially create good jobs, such as manufacturing, are prevented from doing so by a “toxic cocktail” of factors, according to Goutam Das, the author of a new book, Jobonomics, about India’s employment woes.
He said businesses that want to grow find it hard to get loans from banks. Onerous land regulations hinder the building of new factories. Infrastructure such as roads leading to ports is poor. Most small companies are family-run and reluctant to give senior positions to outsiders, inhibiting their expansion.
Workers are less productive or skilled than they need to be, owing to decades of under-spending on the country’s education and health systems. And amid slow wage growth, many ask: why bother working any harder?
Modi’s sudden move in 2016 to demonetise the country’s two most valuable banknotes led to months of cash shortages from which the construction and farming industries are thought to be still recovering.
Das said the job problems were largely out of Modi’s direct control. “Actually the state governments are more important when it comes to job creation,” he said.
But voters are unlikely the forget the promises he made five years ago. “Modi won an economic mandate,” Das said. “If you look at his 2014 manifesto, jobs are mentioned more than a dozen times.”
Praveen Kumar, a master’s graduate in computer science and mathematics, said he had given up on the private sector after years of taking irregular tutoring jobs. “The workload is very high and in the end the salary isn’t worth it,” he said.
He has just secured a government job inspecting drains in Haryana state. It may be dull work for someone with his qualifications, he said, “but I can adjust to it”.
India’s Leader Is Accused of Hiding Unemployment Data Before Vote
Jan. 31, 2019
Unemployed teachers faced off with security officers during a demonstration in Amritsar, India, last week.Narinder Nanu/Agence France-Presse — Getty Images
Unemployed teachers faced off with security officers during a demonstration in Amritsar, India, last week.Narinder Nanu/Agence France-Presse — Getty Images
NEW DELHI — When voters swept Prime Minister Narendra Modi into power five years ago, it was in no small part because of his vows to create millions of jobs and vault India into an era of prosperity.
But now, just months before the next general election, Mr. Modi is facing a potentially troublesome challenge on the jobs promises that may be partly of his own making.
His government was accused on Thursday of suppressing an official report on the national unemployment rate that apparently showed it had reached a 45-year high in 2017.
The Business Standard, a respected Indian financial newspaper, published leaked findings from the unemployment report, which is based on a survey and produced by the National Sample Survey Office, a government agency.
There had been expectations that the report would be released in December. Two commissioners responsible for reviewing data in the report, who had advocated releasing it, resigned in protest this week.
Officials in Mr. Modi’s government scrambled on Thursday to blunt the impact of what amounted to withholding information that discredits the core of his economic record. The chairman of NITI Aayog, a government research organization, said the unemployment report was still in draft form, was not ready for dissemination and would be released in March. The response raised the possibility that the data could be revised.
But economists said the findings, if verified, were problematic for Mr. Modi, the dynamic prime minister whose popularity has always rested on his Hindu nationalism and promises to make India an economic powerhouse rivaling China.
While the leaked 2017 unemployment rate, 6.1 percent, may not sound so gloomy, it is roughly triple the rate of five years earlier, the last time a comparable national survey was conducted. And with India’s work force population of roughly 500 million, that translates into 30 million people who cannot find a job — including many of the 10 million to 12 million young people flooding into the labor market each year.
The rate also understates the true picture, partly because of the way India counts the number of employed. People who work irregularly — a couple of months on, a couple of months off — are considered employed unless they are jobless for a majority of the year.
“Poor people can’t afford to be unemployed for too long; after a while, they’ll usually take whatever job they can get,” said Himanshu, an associate professor of economics at Jawaharlal Nehru University in New Delhi who goes by only one name. “That’s why 6 percent is a really serious number.”
The report is a comprehensive look at the job consequences of two disruptive economic changes Mr. Modi imposed in the past few years.
First was his abrupt decision in November 2016 to eliminate most of the country’s cash currency in circulation. That decision, known as demonetization, was meant to crack down on illicit cash transactions, but the change was so hasty and hectic that it created acute shortages and inflicted enormous damage on large swaths of India’s economy.
Then in July 2017, Mr. Modi implemented a sweeping new single tax code, the Goods and Services Tax, known as the G.S.T., but enforcement of the change was so disorganized that economists say it crippled many small businesses.
The leaked unemployment report, if confirmed, undercuts a basic premise of Mr. Modi’s 2014 campaign: creating jobs for the country’s enormous and young work force. People under age 35 represent roughly two-thirds of the population of 1.35 billion, and, the thinking went, they would earn and spend, expanding and accelerating economic growth. The effects would help pull millions more out of poverty.
Prime Minister Narendra Modi, center, who once looked unbeatable, is now headed into a close election contest. Any bad news on jobs is likely to hurt him.Manish Swarup/Associated Press
Prime Minister Narendra Modi, center, who once looked unbeatable, is now headed into a close election contest. Any bad news on jobs is likely to hurt him.Manish Swarup/Associated Press
Opposition politicians seized on the leaked report as evidence that Mr. Modi and his ruling Bharatiya Janata Party were responsible for the worst unemployment rate since 1972-73, when the country was roiled by war with Pakistan and by the effects of global oil market shocks.
“NoMo Jobs!” Rahul Gandhi, the leader of the Indian National Congress, an opposition party, wrote on Twitter, adding that the “leaked job creation report card reveals a National Disaster.”
The leaked report compounded other recent signs of employment distress in India, including data from the All India Manufacturers’ Organization in December that said 3.5 million jobs had been lost since 2016.
A far more dire study, released Jan. 9 by the Center for Monitoring Indian Economy, a business information company in Mumbai, said 11 million jobs were lost in 2018 alone.
Mahesh Vyas, the company’s managing director, attributed the plunge largely to the “combined effects of demonetization and G.S.T.”
The leaked report came against the backdrop of preparations for national elections likely to be held by early May.
While Mr. Modi once looked unbeatable, recent polls have suggested he is heading into a more competitive race. Any bad news on employment figures could damage his prospects.
Employment is expected to be the single most important issue for voters this year, a new Times Now-VMR opinion poll has found.
Economists say it would be unfair to blame Mr. Modi’s government entirely for India’s unemployment trend, which predated his ascent to power. Less investment in the rural economy, disastrous droughts and struggles in Indian manufacturing also have contributed.
“This buildup has been going on for many years,’’ said Mr. Himanshu. “In fact, Modi came on the promise of providing jobs. But the situation has become worse in his period.”
While Mr. Gandhi, the scion of a long political dynasty, has been hammering the Indian government over its record on employment, Mr. Modi’s ministers were quick to defend the prime minister after the jobs report was leaked.
“This survey focuses mostly, I think, on the organized sector,” Raj Kumar Singh, the energy minister, told the independent broadcaster NDTV. “Our economy is growing at an unprecedented rate. That economy can’t grow without economic activity actually happening.’’
India’s economy has been growing at an annual rate of around 7 percent for several years, among the fastest of any major economy.
According to the Times Now-VMR poll, Mr. Modi remains the most trusted leader in the country. When asked who had the better plans for India, 44.4 percent of respondents chose Mr. Modi, compared with 29.9 percent for Mr. Gandhi.
The previous government, led by Mr. Gandhi’s party, was also uncomfortable releasing unemployment figures, which have always been a politically delicate issue. Still, said Mr. Himanshu, the economist, Mr. Modi and his aides seemed even more sensitive about them.
“They are trying to control the statistical system, and the government is obviously apprehensive of the data,” he said.
Follow Jeffrey Gettleman and Hari Kumar on Twitter: @gettleman and @HariNYT.
Rick Gladstone contributed reporting from New York.
A version of this article appears in print on Feb. 1, 2019, on Page A1 of the New York edition with the headline: India’s Leader Is Accused of Hiding Poor Jobs Data Before Vote. Order Reprints | Today’s Paper | Subscribe
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India’s job crisis is worse than people thought — and its government tried to squelch the data
Joanna Slater
February 1 at 7:36 AM
NEW DELHI — As Indians prepare to vote in national elections later this spring, one burning question has dominated the debate over Prime Minister Narendra Modi’s track record: Has he fulfilled his promise to create jobs for millions of people?
Anecdotal evidence suggests the answer is no: College graduates have been applying for menial jobs by the millions, and daily laborers report that work and wages are declining. A private survey recently showed that the number of people working shrank by 11 million in 2018.
But the government has insisted the jobs picture is healthy. Plus, some officials said, the gold standard of employment data in India is a nationwide survey conducted by the Ministry of Statistics. Until this week, those figures were a closely held secret.
Now that data has been leaked — and it’s bad.
According to a report first published in the Business Standard, an Indian financial newspaper, the nationwide unemployment rate rose to 6.1 percent in 2018, a 45-year high. It’s also nearly triple the jobless rate in 2012, the last time this type of survey was conducted.
The statistics on youth unemployment are even more striking. The jobless rate for young men in rural areas spiked to 17.7 percent since 2012. For young men in cities, it more than doubled, to 18.7 percent.
To say this is a political problem for the Modi government is an understatement. Modi was elected on promises of ushering in “achhe din” — good times — and rising unemployment is a major disadvantage in making his pitch for reelection.
On Friday, the Modi government used its last budget before the polls to offer an array of voter-pleasing measures, including tax breaks and income grants for poor farmers. Piyush Goyal, the minister who presented the budget, defended the government’s track record on job creation by citing a source that economists say is deficient and reflects only a fraction of the economy.
The bad news in the nationwide employment data is only one part of the problem: The government also tried to prevent such figures from becoming public. The jobs report was approved by India’s National Statistical Commission in December, according to its acting chairman. The normal procedure is that the data gets released five days later, said Pronab Sen, the country’s former chief statistician.
Weeks passed and the report did not appear. Then, earlier this week, two members of the statistical commission, including the chair, P.C. Mohanan, resigned in protest — an unprecedented move in India’s statistical community. (When contacted, Mohanan declined to comment.)
India’s government did not deny the accuracy of the job figures reported by the Business Standard. But senior officials at NITI Aayog, the policy-planning arm of the government, held a news conference where they said the leaked data was neither finalized nor comparable to earlier surveys.
Both claims are untrue, Sen said. The policy-planning arm “has absolutely no business in holding forth on the data,” which falls under the purview of the statistics ministry. “Frankly, in my opinion, it was bizarre.”
The furor over the jobs data adds to a broader sense of unease over the Modi government’s handling of statistics. Late last year it revised the way gross domestic product was calculated, to the disquiet of some economists. The updated figures downgraded the economy’s performance during the previous government and elevated it during the Modi years.
While India’s statistical apparatus is far from perfect, it had functioned relatively free of interference, Sen said, particularly with surveys that involve primary data collection, such as the employment survey. Now the “impression you’re giving to the world is that the data put out is the data the government wants put out.”
Meanwhile, the leaked employment data suggests that whoever wins the next election will continue to have a massive challenge ahead. Within two years, the number of people in India between the ages of 15 and 34 will reach nearly 500 million. The share of the working-age population is expected to continue growing for the next 15 to 20 years — a rare opportunity for any country to boost its economic development.
But rising joblessness among young people threatens that scenario.
“What this data tells us is that we’re basically squandering the demographic dividend,” said Radhicka Kapoor, an economist at the Indian Council for Research on International Economic Relations. “The problem that is staring us in the face is youth unemployment, and that’s what we need to address.”
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