Topic– Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
3) The latest employment estimates of CSO are not credible enough given the paradoxes it creates. Examine.(250 words)
Why this question
Employment is a critical issue in Indian economy. The recent CSO estimates suggesting a huge growth in employment has been criticized for its inconsistent methods and paradoxical association with other indicators in the economy. The issue is related to GS- 3 syllabus under the following heading –
Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Key demand of the question.
The question wants us to dig deep into the current macroeconomic scenario of the country and bring out how the CSO estimates are not credible and what paradoxes they create.
Examine- here we have to dig deep into the issue and find out the causes of the situation- lack of credibility on part of CSO estimates and paradoxes created by it.
Structure of the answer
Introduction – mention the recent CSO report titled “Payroll Reporting in India: An Employment Perspective and its employment generation findings.
- Discuss the reasons as to why the credibility of the report stands questioned. E.g only formal sector is covered, it defines jobs as ones that provide at least one government financed (or mandated) social security benefit such as Employees’ Provident Fund (EPF), National Pension Scheme, or Employees’ State Insurance Scheme; the records used for estimation are such that their completeness, consistency and accuracy are unknown; doubling of participation not considered etc.
- Discuss the other paradoxes it creates. Household surveys carried by Labour Bureau show a decline in worker-population ratio between 2013-14 and 2015-16, suggesting a deteriorating employment situation; growth rates reported by ndex of Industrial Production (IIP), and the Annual Survey of Industries (ASI) are consistently lower than those reported by GDP in manufacturing, suggesting an overestimation of manufacturing value added in the NAS. Demonetisation and the Goods and Services Tax (GST) seem to have dented informal sector production and employment, which official data sources seem in no position to capture etc.
Conclusion– discuss in 2-3 lines the need for consistent, transparent, inclusive and objective analysis of the macroeconomic parameters affecting employment in order to arrive at a correct estimate of employment generation in India.