India lacks good economic, jobs data due to informal economy, says Bibek Debroy

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Updated: February 25, 2019 9:09:40 PM

Head of Prime Minister's economic advisory panel Bibek Debroy mentioned that the government can do for the inclusion agenda is to deliver physical and social infrastructure.

indian economy, informal economy, bibek debroy, narendra modi, NITI aayog,  MUDRA loan scheme, employment numbers, informal sector jobsDebroy highlighted that it is difficult to draw an inference as to what is happening on labour and employment on the basis of data gathered from the enterprises for the very simple reason that very few individuals in India work under an employee-employee kind of relationship.

India lacks good data on economy and jobs as it is majoraly an informal economy, Bibek Debroy, the head of Prime Minister’s economic advisory panel, said Monday, while a report claimed big buoyancy in employment numbers under Narendra Modi-led government. Debroy highlighted that it is difficult to draw an inference as to what is happening on labour and employment on the basis of data gathered from the enterprises for the very simple reason that very few individuals in India work under an employee-employee kind of relationship.

“We don’t have very good data on economy and jobs because India is majorly an informal economy. So, therefore, we don’t have a very good data whether it is employment, labour or other things, quite unlike the so-called developed countries,” Debroy, also a member of the NITI Aayog, said at ‘Skoch Group Summit: The Inclusion Manifesto’ here. “There is a large degree of self-employment, there is a large degree of informalisation in contracts. So, the only way I can get satisfactory data is through employment surveys of the kinds that the NSS undertakes,” he said.

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According to the report released by think-tank Skoch Group Monday, there is a big buoyancy in informal sector jobs under the Modi government. A detailed analysis and field research on MUDRA loan scheme, SHGs and infrastructure developments, especially rural roads and National Highways expansion, indicate that there is big buoyancy in informal sector jobs under Modi regime, the report said. Skoch Group Chairman Sameer Kochhar said that as many as 2 crore jobs have been created in the informal sector till date under the present dispensation.

An earlier Skoch report on job linkage of Pradhan Mantri MUDRA Yojana revealed that 1.7 crore new jobs were generated in the first two years of the scheme, which was launched in April 2015. Kocchar, however, added that the job situation seems tricky in the formal sector. “Is there any increase in the formal sector jobs, we can’t conclusively say, yes or no,” said Kochhar.

Debroy mentioned that the government can do for the inclusion agenda is to deliver physical and social infrastructure. Poverty in society shows that people are deprived of social and physical infrastructure and which any government should strive to provide for agenda of inclusive growth, he noted.

“What do we want the government to do, what is the most important item from the perspective of the government in terms of driving inclusion agenda…It is my submission that the most important thing any government can do for the inclusion agenda is to deliver the physical and social infrastructure,” he said. On subsidy, the Chairman of the Economic Advisory Council to the Prime Minister said the only way to define who should be subsidised can be derived through a decentralised census like the SECC (Socio-Economic Caste Census), not through surveys.

— 2 cr jobs added in informal sector under Modi regime —

Kochhar said that data gathering under Mudra Yojana and Self Help Groups (SHGs) suggested around 2 crore jobs have been created in the informal sector under the current government so far. MUDRA loans seem to have become more of the working capital loan scheme, while documentation states that it has to be 80 per cent of loan is an asset, he said. “Lack of data is a huge problem. We have faced a lot of constraints because of this. However, the saving grace for us is our ongoing studies and field research that we have been doing this for more than 20-years,” he said. As per the report findings, there has been a steady increase in the number of self-help groups (SHGs).

The number of SHGs has increased to 87.44 lakh in 2017-18 from 76.97 lakh in 2014-15. However, there is more impressive improvement in their bank linkages. Gross savings of SHGs with banks more than doubled to Rs 19,592.12 crore in 2017-18 from Rs 9,897.42 crore in 2013-14. Loans given to SHGs also more than doubled to Rs 47,185.88 crore during 2017-18 from Rs 24,017.36 crore in 2013-14. Non-performing assets (NPA) rate in bank loan to SHGs dropped by 38 bps to 6.12 per cent during 2017-18, it said.

Around 10-20 households benefit from an SHG. In 2017-18, nearly 11 crore households got benefited from SHGs. The incremental increase of 10.47 lakh SHGs has benefited over 1 crore households. Among others, the report said road infrastructure is another sector that has witnessed a huge number of job creation in the informal sector. A total of 48,751 km of PMGSY roads, connecting 11,499 eligible habitations have been constructed in 2017-18 at an average rate of 134 km per day.

The government built 47,447 km of rural roads in 2016-17, the second most in seven years. These two years compared with the 36,449 km of roads constructed in 2015-16 under PMGSY and 36,337 km in 2014-15. The pace of construction of National Highways has also more than doubled. From a construction rate of just about 12 km per day in 2014-15, the rate more than doubled to reach 27 km a day during 2017-18, while the daily award of works was 47 km. The Skoch report noted that the acceleration in the pace of road construction has led to the creation of a substantial number of new jobs, mostly in the informal sector.

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