The number of formally employed Indians may have fallen marginally in financial year 2018.
It declined by 0.1% from 406.7 million the previous year to 406.2 million, the Centre for Monitoring Indian Economy, a think tank tracking business and economic data, reported on July 17.
Even after accounting for a margin of error, given the vast sample size of over 500,000 respondents interviewed by CMIE every month, this is bad news for Asia’s third-largest economy. Because it suggests that no jobs were added in financial year 2018 (ended March 31).
If the margin of error is considered, one could assume there was no decline, said Mahesh Vyas, managing director and CEO of CMIE. “On the flip side, we may also infer there was no growth in employment in 2017-18 .”
In simple terms, the number of people joining the workforce in financial year 2018 was equivalent to the number of those who dropped out due to retirement, job loss, or other reasons, according to a human resources expert.
This, however, is a far cry from the picture being painted by the Modi government ahead of the 2019 general elections. In April, it claimed that 3.11 million jobs were added between September 2017 and February 2018 based on employee payroll data. CMIE had disputed that with its own 1.8 million figure for 2017.
In any case, the data stands in stark contrast to Modi’s 2014 poll promise of creating 10 million jobs every year.
The last two years have been tough for India, with the economy still recovering from the twin shocks of demonetisation and the introduction of the goods and services tax regime.
In financial year 2018, the announcements of new investment projects plummeted by 38.4% and completion of new ones fell 26.8% over the previous year. Foreign direct investments took a beating by 15%, CMIE data show. Muted consumer demand and low capacity utilisation have also been a problem.
These have cumulatively stunted economic growth and job creation—an alarming indication of this was the staggering 23 million applications received by Indian Railways in April for just 90,000 vacancies.
And things aren’t looking up this financial year either.
The monsoon has been somewhat erratic, crude oil prices have risen, foreign portfolio investors are exiting, and the rupee has been sliding, hurting the economy, according to the CMIE. “These are not the best times to expect private entrepreneurs to invest and so not the best time to find new jobs,” said Vyas.