Dial 'M' for Manufacturing -Santosh Mehrotra & J Parida

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published Published on Aug 4, 2019   modified Modified on Aug 4, 2019
-The Hindu

The recent PLFS data, which show a historic decline in manufacturing employment, make one fact plain — India desperately needs a comprehensive industrial policy, absent since 1991

The Union Budget suggests that the government has not recognised the need to create more manufacturing jobs. For the first time ever, manufacturing jobs fell in absolute terms between 2011-12 and 2017-18, to quote the Periodic Labour Force Survey (PLFS) of the National Sample Survey Organisation (NSSO).

Further, during the same six-year period, the total workforce actually shrank from 474 million to 465 million, a first in India’s post-Independence history. While the unemployment rate for all age groups increased from 2.2% (2011-12) to 6.1% (2017-18), youth unemployment rate surged to a level never witnessed before in the Indian economy, increasing from 6.1% (2011-12) to 17.8% (2017-18). The PLFS data also show that while the number of persons searching for jobs tripled between 2011-12 and 2017-18, with the labour force growing at about two million people per year, the economy did not generate enough jobs. The total employment in the intervening years fell by 9.1 million, resulting in a historical increase in the unemployment rate (6.1% or 30.1 million people). Rise in joblessness among the educated youngsters, who preferred to remain unemployed rather than taking up low-paying jobs, contributed to this trend.

Jobs in other sectors

Here, we need to mention that it is no one’s case that India, considered to be the world’s ‘fastest-growing economy, is not creating jobs at all. For instance, jobs in services and non-manufacturing industry (in the areas of construction, mining and utilities) have grown in absolute terms between 2011-12 and 2017-18. However, a gain in these two fields is not enough to offset the loss in agriculture and manufacturing jobs. It also needs to be asserted that while a reduction in the number of people depending on agriculture is a positive development, a fall in manufacturing employment is a worrying reality.

We also need dispose off the concern that the PLFS data are flawed because they do not capture new type of ‘jobs’ such as platform economy employment created by ride-hailing services (like Ola and Uber); food delivery services (Swiggy and Zomato); and self-employment jobs created by Mudra loans. In reality, these are all informal/unorganised-sector jobs, which NSSO samples always capture. It is bizarre to assume that in an economy where four out of every five jobs are in the informal sector, agencies with nearly seven decades of conducting surveys would not capture such jobs.

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