India Employment Report paints a dire picture for youth. But it has praised Modi govt too

The report praised the quality of the government’s data. This was a particularly noteworthy point since India’s data system has almost faced criticism from economists & statisticians.

Representational image of unemployed youth at a government enrollment centre in Patna | Photo: ANI

The recent report on employment and unemployment conditions in India by the International Labour Organisation and the Institute of Human Development has made headlines not just because of the dire picture it paints, but also because Chief Economic Advisor V Anantha Nageswaran seemingly passed the buck of solving the issue to the private sector.

While the data and the CEA’s comments attracted attacks from the Opposition, mainly the Congress, what was noticed less — by critics and supporters alike — was the praise the report carried about India’s data, something that’s been criticised by many and for long.

This is why the India Employment Report 2024 is ThePrint’s Newsmaker of the Week.

An eventful launch

The post-Holi stupor in Delhi was quickly broken on Tuesday when Nageswaran launched the employment report. A large part of this swift shot of adrenaline to media houses had to do with the findings of the report. It makes for grim reading on various counts, but especially for the plight of India’s youth.

Almost all national dailies and websites soon featured headlines playing up the fact that 83 per cent of India’s unemployed population was the youth. This comes at a time when India’s working-age population has been growing over the last two decades. In other words, we have more people who can work, but fewer people who are actually working.

As per the ILO-IHD report, which predominantly used Indian government data, the country’s working-age population (between 15-59 years of age) increased from 59 per cent in 2011 to about 63 per cent in 2021. Yet, the labour force participation rate (LFPR) of the youth, which was 54 per cent in 2000, dropped to 42 per cent in 2022.

Another major finding of the report was the post-pandemic surge of workers moving back to low-productivity agriculture. The data showed that, between 2000 and 2012, the proportion of people employed in agriculture fell from 62 per cent to 49 per cent, and further to 42 per cent by 2019. Since then, though, this trend has reversed, with agriculture’s share in the workforce rising to 45 per cent by 2022.

This, of course, meant that the share of the population working in the more productive services and manufacturing sectors fell commensurately. The increasing prevalence of low-skilled labour was backed up by other data in the report on the level of skills among India’s youth (abysmal) and the fact that youth unemployment seemed to be higher among those with higher levels of education.

The CEA makes it worse

All of these findings would have been bad enough, but the CEA added fuel to the fire while releasing the report, albeit by making a reasonable point. He said that it was wrong to lay the burden of solving all social and economic problems, such as unemployment, on the government’s shoulders.

“In the normal world, it is the commercial sector that needs to do the hiring,” he said. He did not, of course, delve into whether we are currently in a ‘normal’ world or not.

However, what was a basic point — that no Indian government can afford to infinitely hire people — was soon hijacked by politics. Soon, by the Congress’ standards.

The next day, several prominent Congress leaders took to X to lambast the government and the CEA over his statements and the findings of the report.

Congress President Mallikarjun Kharge highlighted the findings regarding youth unemployment, saying that they are “bearing the brunt of Modi Govt’s pathetic apathy”. The alarmist language didn’t end there: “We are sitting on a ‘ticking bomb’ of joblessness”.

“But Modi Govt’s Chief Economic Advisor protects the dear leader, by saying ‘Govt. can’t solve all social, economic problems such as unemployment’,” Kharge continued, before highlighting some of the more worrying data points from the report.

Former finance minister and a senior leader in the Congress, P Chidambaram, also took to X to vent. He was both shocked and startled by the CEA’s statements. If the CEA’s position on the issue was the official stand of the central government, “we must boldly tell the BJP ‘vacate your seat’”, he wrote.

The Congress, on the other hand, “has a concrete plan to tackle the issue of unemployment and it will be revealed in its manifesto”, he added.

A missed opportunity

In all of this, neither the government—usually so quick to pick up on any positive commentary—nor its critics caught that the ILO-IHD report was pretty fulsome in its praise for the quality of the government’s data. In fact, it was only ThePrint that caught it.

“The all-India estimates of the LFPR (labour force participation rate), the worker population ratio, the unemployment rate, including the distribution of employed persons in the country according to gender, location (rural and urban), broad industry and other categorisations, from the Employment and Unemployment Surveys and the Periodic Labour Force Surveys (PLFS) are generally found to be quite robust with reasonably low relative standard errors,” the report said.

It added that even though methodologies for some of the surveys had changed recently, they were robust enough to ensure compatibility with surveys from previous years.

“This is due to the high level of precision of the all-India estimates and because the final estimates of aggregates (and accordingly, the ratios) for different domains are derived after appropriately adjusting the sample data with corresponding design-based weights at the household level,” the report said.

This was a particularly noteworthy point since India’s data system has almost exclusively faced criticism from economists and statisticians. For example, former member of the Prime Minister’s Economic Advisory Council, Surjit Bhalla, has talked about how the quality of India’s data systems has deteriorated, culminating in the 2017-18 edition of the Consumer Expenditure Survey, which the government scrapped, and which Bhalla said contained “the worst data he had ever seen”.

Others such as former Chief Economic Advisor Arvind Subramanian have questioned the robustness of the government’s GDP data by saying they are “mystifying” and that they “don’t add up”. Ashoka Mody, a visiting professor of international economic policy at Princeton University, last year wrote an article castigating the government’s numbers.

The unemployment report is long, about 340 pages, and contains a wealth of information and analysis, ample fodder for policymaking. The focus, however, was sidetracked by politics.

Views are personal.

(Edited by Theres Sudeep)