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Wednesday, February 13, 2019

The shape of the jobs crisis


India has no industrial policy or employment strategy to ride the wave of its demographic dividend

Job creation has slowed since 2011-12, the year of the last published National Sample Survey Office (NSSO) labour force survey. I used Labour Bureau annual survey (2015-16) data and Centre for Monitoring Indian Economy Pvt. Ltd. (CMIE) data (post-2016), which has a sample size larger than the NSSO labour force surveys, to reach this conclusion. Both surveys cover rural and urban, and organised and unorganised sector employment; in other words, they capture both the Employees’ Provident Fund Organisation/National Pension Scheme (organised) as well as such employment as might be generated by Micro Units Development & Refinance Agency Ltd (MUDRA) loans or platform economy jobs. The latter two job sources are precisely what the government claims were not being captured by jobs data available. We have repeatedly stated that government claims on absence of ‘good’ data on jobs are simply untenable.
My analysis prior to the leak of NSSO 2017-18 data had shown that the jobs situation has turned grim since 2012.
A jump now
What the leaked NSSO 2017-18 data have shown is that while the open unemployment rate (which does not measure disguised unemployment and informal poor quality jobs that abound in the economy) by the usual status never went over 2.6% between 1977-78 and 2011-12, it has now jumped to 6.1% in 2017-18. This was expected. In the last 10-12 years, more young people have become educated. The tertiary education enrolment rate (for those in the 18-23 age group) rose from 11% in 2006 to 26% in 2016. The gross secondary (classes 9-10) enrolment rate for those in the 15-16 age groupshot up from 58% in 2010 to 90% in 2016. The expectation of such youth is for a urban, regular job in either industry or services, not in agriculture. If they have the financial wherewithal to obtain education up to such levels, they can also “afford” to remain unemployed. Poor people, who are also much more poorly educated, have a much lower capacity to withstand open unemployment, and hence have lower open unemployment rates.
What NSSO 2017-18 also shows is that as open unemployment rates increased, more and more people got disheartened and fell out of the labour force; in other words, they stopped looking for work. The result is that labour force participation rates (LFPR, i.e. those looking for work) for all ages, fell sharply from 43% in 2004-5 to 39.5% in 2011-12, to 36.9% in 2017-18 (a reflection mainly though not only of the falling female LFPR). This shows up in the growing numbers of youth who are NEETs: not in education, employment or training. They are a potential source of both our demographic dividend but also what is looking to be a mounting demographic disaster.
Meanwhile, government economists have repeatedly told us that there is no jobs crisis.
Between 2004-05 and 2011-12, as many as 7.5 million new non-agricultural jobs were being created every year. The unemployment rate was only 2.2%. The volume of open unemployment was almost constant (at around 10 million) until 2011-12, but it increased to 16.5 million by 2015-16. Increased open unemployment, post 2011-12, suggests that those in education prior to 2011-12 would start searching for non-agricultural jobs but did not find them. The latest NSSO data suggest that this situation had worsened further by 2017-18.
Across education categories
A sharp increase in the unemployment rate of the educated (based on our estimates of the Annual Survey, Labour Bureau) should have worried the government. My estimate is that the unemployment rate rose over 2011-12 to 2016 from 0.6% to 2.4% for those with middle education (class 8); 1.3% to 3.2% for those who had passed class 10; 2% to 4.4% for those who had passed class 12; 4.1% to 8.4% for graduates; and 5.3% to 8.5% for post-graduates. Even more worrying, for those with technical education, the unemployment rate rose for graduates from 6.9% to 11%, for post-graduates from 5.7% to 7.7%, and for the vocationally trained from 4.9% to 7.9%.
While NSSO 2017-18 data show the share of regular wage jobs rising, especially in urban areas (and the share of self-employed and casual wage work falling), this rise in nowhere close to the number of educated youth entering the labour force.
For an economy at India’s stage of development, an increase of workers in agriculture (of 20 million that took place over 1999-2004) is a structural retrogression, in a direction opposite to the desired one. Between 2004-5 and 2011-12, the number of workers in agriculture fell sharply, which is good, for the first time in India’s economic history. Similarly, the number of youth (15-29 years) employed in agriculture fell from 86.8 million to 60.9 million (or at the rate of 3 million per annum) between 2004-5 and 2011-12. However, after 2012, as non-agricultural job growth slowed, the number of youth in agriculture actually increased to 84.8 million till 2015-16 and even more since then (as the CMIE data would attest). These youth were better educated than the earlier cohort, but were forced to be in agriculture.
Drop in manufacturing jobs
Even worse, manufacturing jobs actually fell in absolute terms, from 58.9 million in 2011-12 to 48.3 million in 2015-16, a whopping 10.6 million over a four-year period. This is consistent with slowing growth in the Index of Industrial Production (IIP), which consists of manufacturing, mining, and electricity. The IIP had sharply risen from 100 in 2004-5 to 172 by 2013-14 (in the 2004-5 series), but only rose from a base of 100 in 2011-12 in the later series to 107 in 2013-14, and to 125.3 in 2017-18. This is also consistent with exports first falling after 2013, then barely recovering to levels still lower than 2013. It is also consistent with investment-to-GDP ratio falling sharply since 2013, and still remaining well below 2013 levels. This holds for both private and public investment.
What is tragic is the growing number of educated youth (15-29 years) who are “NEET”. This number (70 million in 2004-5) increased by 2 million per annum during 2004-5 and 2011-12, but grew by about 5 million per annum (2011-12 to 2015-16). If that later trend continued (as there is evidence it has) we estimate it would have increased to 115.6 million in 2017-18. That is a 32 million increase in “NEETs” in our society over 2011-12 to 2017-18 — potential lumpen fodder.
These youth (“NEET” and unemployed) together constitute the potential labour force, which can be utilised to realise the demographic dividend in India. Will a new government at least recognise there is a crisis?
I estimate that the number of new entrants into the labour force (currently at least 5 million per annum), and especially educated entrants into the labour force will go on increasing until 2030. It will thereafter still increase, though at a decelerating pace. By 2040 our demographic dividend — which comes but once in the lifetime of a nation — will be over. China managed to reduce poverty sharply by designing an employment strategy (underpinned by an education and skills policy) aligned to its industrial strategy. That is why it rode the wave of its demographic dividend. Unfortunately, India has neither an industrial policy nor an employment strategy, let alone the two being aligned.
Is our political class listening? Or are our educated unemployed and NEETs meant to be merely used as political fodder? That is the trillion rupee question for the fastest growing large economy in the world, about to become the fifth largest in the world.
Santosh Mehrotra is Professor of Economics and Chairperson, Centre for Informal Sector and Labour Studies, Jawaharlal Nehru University, New Delhi. Twitter:@smehrotra1
Source: The Hindu, 13/02/2019
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Pseudo-social justice

Policy is not based on assessments of deprivation — it merely addresses specific groups


The Gujjars of Rajasthan are back on the streets. This could be seen as an attempt to corner the newly-formed Congress government in the state. Both Congress and BJP have had the taste of Gujjar wrath earlier. It could also be seen as an extension of intra-party factionalism playing out in the open for the Congress. Nevertheless, the renewed agitation alerts us to the larger complications facing policy-making. Reservation appears to be the only answer to all our socio-economic complications. Thus, over and above party competition and internal factionalism, the Gujjar agitation represents the difficulties and distortions that have crept into the reservation regime. And it is not the only agitation of this type.
A similar agitation is waiting to happen in Maharashtra — by the Dhangar community, over their demand for inclusion in the ST category. Unrest among the Patidars of Gujarat and Jats of Haryana is simmering and can explode any time into another round of agitation for reservation. At the same time, the Bombay High Court is hearing a petition demanding that the state’s decision to extend 16 per cent reservation to Marathas be stayed/struck down. The apex court, similarly, is hearing a petition against the constitutional amendment extending reservations to economically weaker sections. Petitions over expansion of reservation beyond 50 per cent are already pending before the court. Thus, even as reservation appears to be the only solution for demands by many communities, the reservation regime is becoming more and more litigation-prone.
For staunch proponents of reservation, these troubles can be resolved by doing away with the 50 per cent cap altogether. The latest amendment giving reservation to the poor has already opened the doors for such parliamentary adventurism. It has done away with the constitutionally permitted gatekeeping mechanism of social and educational backwardness and opened up reservation to everyone — irrespective of social backwardness.
In other words, the solution is to free the reservation policy of the chains of constitutional reasonableness as mandated by the judiciary. This overemphasis on the idea of reservation is marked by four critical aspects that signify a move away from the constitutional scheme of positive discrimination.
One, as we recently witnessed in Parliament, there is a complete absence of genuine debate on the question. No party could take a nuanced position on the issue of “reservation for poor”. In a sense, this is only to be expected if one considers the political fallout of such nuance. Post-Mandal, there has seldom been any serious review or re-examination in our public political life of the way in which the reservation policy is moving. The political arena is much more strongly affected by this new consensus that quietly took shape in the post-Mandal era. So much so that, recently, a lawyer arguing on behalf of the petitioners challenging Maratha reservation was manhandled outside the court. No political party or politician can raise questions about the matter. This is a classic case of consensus as closure. There is a complete closure of the public debate on reservation.
Two, over the quarter century since Mandal, the reservation regime has expanded in many directions. Ironically, most of the times, expansion has contributed to the de-legitimation of the original idea behind reservation. When the reservation policy went beyond SCs and STs, despite the fact that the expansion was justified, it effectively diluted the sharpness of the tool — that it would be employed for extreme cases of discrimination and exclusion. Down the line, when different communities began to claim that they are backward and deserving of reservation, the political clout of these communities and their relatively less deprived conditions meant that the logic of discrimination got diluted. Finally, when the idea of reservations is used to address economic infirmity, the entire basis of the reservation policy gets displaced.
Now, the reservation policy will no more be seen as an intermediate tool to address ingrained social injustice in the Indian social order. As a result, the moral basis of the reservation policy is almost lost. The enabling provision in the Constitution was predicated on the logic that the social order is fundamentally unjust and therefore the state should intervene in favour of the most oppressed sections to enable them to compete in the public sphere and stake their claims for a share in public power. This logic is no more applicable. Instead, the logic now is that there are different groups in society and they need to be accommodated, as far as possible, in a proportionate manner (as I argued earlier too, ‘The New Reservation’, Indian Express, August 1, 2018). This new logic implies that reservation is not a remedy for traditional social ills but a routine policy tool to arrange political and administrative power.
Three, and paradoxically, while reservation for economically weaker sections delegitimises social justice as the basis for reservations, at the same time, the post-Mandal churning has brought forward caste as the primary basis for making claims on the state. Not the injustice perpetrated by the caste system, but caste in itself has emerged as the primary social group for which demands are made, robbing policy-making of the more justifiable bases of deprivation. Instead of an expectation that policy should be directed at and based on some agreed ways of assessing deprivation and its amelioration, now policy can be based merely on the fact that it addresses specific groups. Besides, such public display of caste claims leads more to strengthening identity than ensuring advancement. The identity excess this has brought about has been seldom taken into consideration but effects of this development spill over beyond the policy realm. India’s entire public discourse and political calculus are deeply influenced by single-caste considerations. Caste and caste identity are not new factors but the traction they have now received not just in political calculations but in more routine social relations and personal identifications is a new factor in shaping the public sphere.
Finally, the language of pseudo-justice being popularised by the “quota-for-poor” policy is symptomatic of a larger failure. It replaces the principle that welfare should be the basic raison d’être of public policy, it hides the colossal failure of the state in handling questions of poverty and deprivation and, at the same time, it indicates a dead end in policy making.
What is common between the demands of Jats, Gujjars, Marathas, Dhangars, Patidars, etc on the one hand, and the recently effected coup against the Constitution through the quota-for-poor amendment is a public admission of the absence of imagination and innovation in policy-making. Post-Mandal, the first section to ignore the possibilities of imaginative policies for social justice consisted of the intellectuals. In their haste to brand parties as pro-social justice and anti-social justice, they latched on to reservation as the only policy tool to address social injustice.
The political players were quick to succumb to the temptation of postponing the substantive social justice agenda in favour of decorative policy measures of limited effect. In the process, the fundamental task of politics that it throws up alternatives and enables the imagination, got stunted. We have a consensus on reservation and yet social groups continue to agitate for reservation — representing the closure of imagination in public policy-making.
Source: Indian Express, 13/02/2019
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ONGC Recruitment 2019: Apply online for 900 vacancies before February 15, check important dates, eligibility, direct links

ONGC Recruitment 2019: Over 900 vacancies for engineers and other graduates. Application window closing soon. Here are the details of posts, eligibility and educational qualification.

Oil and Natural Gas Corporation Ltd (ONGC) India has invited applications for recruitment of over 900 vacancies in different posts at various regions. ONGC is hiring for posts like non-executive, trainee and class III and IV.
The notifications were issued in the last week of January and the application process had begun on the same day. However, the last date to apply for the vacancies is near. The selections process for the recruitments include Computer based test (CBT), skill test (physical measurement test/ physical efficiency test/ typing test etc) .
Source: Hindustan Times, 8/02/2019







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Legitimise informal rental agreements in slums

For slum housing policies to be truly inclusive, the State must recognise diverse tenurial arrangements

Following in the footsteps of Odisha, the government of Tamil Nadu in January drafted a housing policy that emphasises leveraging technology for conducting accurate spatial surveys of slums. The Odisha government’s policy has been lauded for providing a clear roadmap towards granting land titles to slum dwellers. However, it does not take into account the different tenural types in slums and risks excluding some of the most vulnerable groups — tenant slum households. For Tamil Nadu, and other states formulating housing policies, it is critical to recognise the importance of rental arrangements.
New migrants in a city prefer to rent. When migrants belong to low-income groups, they usually find a shelter in the city’s slums thanks to kinship and other social networks. Renting is also a preferred choice for those who cannot afford the time and money spent on long commutes to the place of work. Therefore, an informal system of thriving rental markets has emerged in India’s slums. According to the 2011 Census of India, 26% of slum households lived in rented accommodation. In the city of Mumbai, 24% of slum households are tenants. In Bangalore and Chennai, rental households constitute 46% and 45% of slum households respectively.
Rental agreements between tenants and landlords are either oral or written on paper having no legal validity. Rental payments are often made in cash and tenants are not provided proofs of payment. With no system of law and framework for dispute resolution to undergird rental agreements, both tenants and landlords face a very high degree of risk and uncertainty. To an extent, private ordering of different types has emerged to mitigate risks. Tenants are afforded some protection against unfair evictions and landlords can expect some guarantee of regular payments due to informal modes of contract enforcement. Often, tenants and landlords belong to the same community or might be related, which creates a degree of trust as well as a need to maintain a good reputation in the community. In some cases, slumlords or local leaders act as enforcers in case of disputes or reneging of contracts.
This existing system is inadequate and far from efficient. There is anecdotal evidence showing that tenants may be asked to vacate their homes at short notice and that their homes are not properly maintained by landlords. Once the duration of negotiated rent ends, increases in rents are often very high. This is partly to dissuade tenants from staying for too long and claiming some sort of de facto ownership. A potential cause for this is the high degree of insecurity landlords face in renting out their premises due to the general nature of informal ownership tenure. A 2001 paper by Sunil Kumar of London School of Economics and Political Science finds that in Surat, when tax officials visited, landlords would remove partitions in the house separating themselves and the tenants and report that the tenants were relatives living with them temporarily. In Dharavi, during a slum census being conducted by Mashal, a Pune-based NGO, surveyors reported that landlords did not allow them to speak with tenants — who often resided in lofts above their homes — due to fear among landlords that tenants may become eligible for benefits or even ownership rights.
Reforms for improving the situation have to be designed carefully so that the incentives they create do not lead to a complete breakdown of private ordering or drive rental markets further underground. Rent control-like regulations will be too onerous and will quickly and effectively thwart supply. The ideal reform is providing a foundation of clear property rights in the form of tenure security upon which the transactions and contracts can be built. Tenure security can be of different types, ranging from full property rights to the dwelling — and, therefore, freedom to develop, rent or sell — to partial rights that guarantee protection of slum dwellers against eviction for occupying public or private land and provide eligibility for basic amenities and services.
The benefits to landlords from tenure security that recognises their right to rent are obvious. The risks they face from illegally renting out will dissipate. Since landlords often themselves live in slums and have low incomes, earnings from rent are an important revenue source and help smoothen consumption. But this policy is equally beneficial for tenants, who can expect better condition of dwellings and getting access to basic amenities. A 2017 study of slums in Pune by Shohei Nakamura of the World Bank provides empirical evidence to show that tenants are willing to pay a premium for living in slums that have been granted tenure security in order to get the aforementioned benefits. Therefore, for slum housing policies to be truly inclusive, they must recognise diverse tenurial arrangements instead of assuming a single type, that is, ownership, and legitimise informal rental arrangements. State governments that wish to create housing solutions for the poor cannot afford to overlook and undermine the solutions the poor have found for themselves.
Vaidehi Tandel is Junior Fellow at IDFC Institute, Mumbai
Source: Hindustan Times, 12/02/2019
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Spreading Fragrance


We are entitled to our own space. If for some reason, we are denied it, we have the ability to design our inner space, create our own sky, lush gardens of fragrance with colourful birds that chirp songs dear to our heart and take flight into realms of imagination. But how authentic are our birds and skies if we are not in tune with ourselves? Why can’t we shed debris and burden of a cumbersome past to assimilate the best that nature has to offer, like a stunning rose or lotus do? By bragging about our species’ superiority, we have unwittingly limited our growth by undermining all other, much more rewarding and potent possibilities that lie within our reach. Our deep-rooted conditioning devises our fate. We always have enough excuses to justify our wrongs because the ‘rights’ are difficult to come by, involving too much effort and a high degree of integrity. We look for an easy way out. Unhealthy compromises have become the norm, be it at work or in relationships, compromises that often camouflage our uncertainties and inferiority complexes, making us feel like inflated superstars. By all means, let us run the race but, with our own, individual inner self, challenging our own potential, honing our own skills, in tune with our own inner, peaceful self. Then we stand a good chance of becoming flowers and genuinely creative in all our relationships. As Osho put it, “It does not matter whether you are a rose or a lotus or a marigold, what matters is the flowering… let your fragrance

Source: Economic Times, 13/02/2019
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Monday, February 11, 2019

Economic and Political Weekly: Table of Contents

Vol. 54, Issue No. 6, 09 Feb, 2019

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The solution is universal


Strengthening the MGNREGA would be more prudent than a targeted cash transfer plan like PM-KISAN

Rural distress has hit unprecedented levels. According to news reports, unemployment is the highest in 45 years. To allay some misgivings of the distress, one of the announcements in the Budget speech was that “vulnerable landholding farmer families, having cultivable land up to 2 hectares, will be provided direct income support at the rate of Rs. 6,000 per year”.
This cash transfer scheme has been called Pradhan Mantri Kisan Samman Nidhi (PM-KISAN). The Ministry of Agriculture has written to State governments to prepare a database of all eligible beneficiaries along with their Aadhaar numbers, and update land records “expeditiously”. The letter further states that changes in land records after February 1, 2019 shall not be considered for this scheme.
A comparison
Undoubtedly, farmers’ distress needs urgent attention but let’s see if the PM-KISAN is a reasonable solution. Let us first compare some basic numbers with the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). For example, if two members of a household in Jharkhand work under MGNREGA (picture) for 30 days, they would earn Rs. 10,080 and a household of two in Haryana would earn Rs. 16,860 in 30 days. Jharkhand has the lowest daily MGNREGA wage rate, and Haryana the highest. Put simply, a month of MGNREGA earnings for a household is more than a year’s income support through PM-KISAN anywhere in the country.
PM-KISAN is a targeted cash transfer programme and MGNREGA is a universal programme. Any rural household willing to do manual work is eligible under the Act. According to the 2011 Socio-Economic and Caste Census, around 40% of rural households are landless and depend on manual labour. The landless can earn through the MGNREGA but are not eligible for the PM-KISAN scheme. Notwithstanding the meagre amount, the PM-KISAN might be pitting the landless against a small farmer.
Further, it is unclear how tenant farmers, those without titles, and women farmers would be within the ambit of the scheme. There is also substantial evidence to demonstrate that universal schemes are less prone to corruption than targeted schemes. In targeted programmes, it is very common to have errors of exclusion, i.e., genuine beneficiaries get left out. Such errors go unrecorded and people continue to be left out. It is in some of these contexts that strengthening an existing universal programme such as the MGNREGA would have been a prudent move instead of introducing a hasty targeted cash transfer programme.
The Agriculture Ministry’s letter states that “funds will be electronically transferred to the beneficiary’s bank account by [Government of India] through State Notional Account on a pattern similar to MGNREGS”. There are important lessons to be learned from the MGNREGA implementation. The Centre has frequently tinkered with the wage payments system in the MGNREGA. It’s creditable that timely generation of pay-orders have improved, but contrary to the Centre’s claims, less than a third of the payments were made on time. And in contempt of the Supreme Court orders, the Centre alone has been causing a delay of more than 50 days in disbursing wages.
Field realities
Moreover, repeated changes in processes result in a hurried bureaucratic reorientation on the ground, and much chaos among workers and field functionaries alike. Field functionaries are pushed to meet stiff targets. Being short-staffed and inadequately trained, this results in many technical and unforeseen errors. A case in point is the rushed manner in which Aadhaar has been implemented for the MGNREGA.
Several MGNREGA payments have been rejected, diverted, or frozen as a consequence. In the last four years alone, more than Rs. 1,300 crore of the MGNREGS wage payments have been rejected due to technical errors such as incorrect account numbers or faulty Aadhaar mapping. There have been no clear national guidelines to rectify these. There are numerous cases of MGNREGS payments getting diverted to Airtel wallets and ICICI bank accounts. In a recently concluded survey on common service centres in Jharkhand for Aadhaar-based payments, it was found that 42% of the biometric authentications failed in the first attempt, compelling them to come later. This continued harassment faced by people would have been a more humane question to address rather than brushing them aside as “teething problems” and build a new scheme on similar shaky platforms.
The success of the PM-KISAN is contingent on there being reliable digital land records and reliable rural banking infrastructure — both are questionable at best. While Rs. 75,000 crore has been earmarked for this scheme, the MGNREGA continues to be pushed to a severe crisis. The MGNREGA allocation for 2019-20 is Rs. 60,000 crore, lower than the revised budget of Rs. 61,084 crore in 2018-19. In the last four years, on an average, around 20% of the Budget allocation has been unpaid pending payments from previous years. Thus, subtracting the pending liabilities, in real terms, the Budget allocation has been lower than 2010-11. Despite a letter to the Prime Minister by citizens and MPs in January 2019, (as of February 8) all MGNREGA funds have been exhausted. While the country stares at an impending drought, workers languish in unemployment. The MGNREGA is neither an income support programme nor just an asset creation programme. It is a labour programme meant to strengthen participatory democracy through community works. It is a legislative mechanism to strengthen the constitutional principle of the right to life. That the MGNREGA works have demonstrably strong multiplier effects are yet another reason to improve its implementation. Despite all this, the MGNREGA wage rates in 18 States have been kept lower than the States’ minimum agricultural wage rates. This acts as a deterrent for the landless. Yet, work demand has been 33% more than the employment provided this year — underscoring the desperation to work. By routinely under-funding this Act, the Bharatiya Janata Party government continues to undermine the constitutional guarantee.
In an employment programme, adequacy of fund allocation and respectable wages are crucial, so meaningless claims of “highest ever allocation” and other dubious claims through a management information system are unhealthy for democracy.
At a time of such acute distress, does it not behove the Central government to improve the existing universal infrastructure of the MGNREGA before plunging into a programme pretending to augment farmers’ income?
Rajendran Narayanan teaches at Azim Premji University, Bengaluru. Debmalya Nandy is a social worker
Source: The Hindu, 11/02/2019
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