Does India have jobless growth despite an economy doing reasonably well or does it have plentiful jobs? The answer depends on what data source you rely on, and the difference can be as much as sevenfold — and this is when all data sources are governmental.
Based on the Economic Survey, employment in the organised non-government sector rose by a low 5.2% per annum between FY06 and FY12. Add to this the fall in central government employment, from 28.6 lakh in FY06 to 25.2 lakh in FY12, and the employment picture is a dismal one. With state government employment also falling, from 73 lakh in FY06 to 71.8 lakh in FY12, the picture only gets worse.
Keep in mind, the economy grew at its fastest during some of these years. The economy grew at 9.5% in FY06, 9.3% in FY08, 8.9% in FY11 before falling to 6.7% in FY12.
The picture gets completely reversed, to one of plentiful jobs, when you look at data from the Employees’ Provident Fund Organisation (EPFO), which has as its members all private sector employees in organisations that have more than 20 workers. Between FY07 and FY12, non-government jobs in the organised sector grew from 4.4 crore to 15.8 crore, a number that is significantly higher than the 4.4% shown by the Economic Survey. Even for the period FY12 to FY15, for which there is no comparable data in the Economic Survey, growth has been a healthy 22.8%.
Apart from the growth data itself, there is a huge discrepancy between the actual numbers themselves. According to the Economic Survey, there were 119.7 lakh people employed in the formal private sector in FY12. The number of those employed in the sector according to the EPFO is more than seven times this. Even if you assume a 50% overstatement due to an individual having two accounts, the difference is 3.5 times.
While we will know the actual number of employees covered by organisations covered by the EPFO only after all the duplicates are removed — that process is believed to be largely completed — keep in mind the EPFO contributions suggest that the jobs growth is far higher than the Economic Survey data that the government regularly brings out or even that brought out by the Labour Bureau on a total of eight industries. While the Labour Bureau shows jobs contracting 13.4% per annum between FY10 and FY15, annual contributions to the EPFO grew 20.6% per annum between FY07 and FY12 and 17.3% per annum between FY12 and FY15. While a part of the growth will be due to salary levels rising, it cannot be explained unless the number of fresh jobs being created is also high.