Economic Highlights
New Delhi, 15 February 2021
Employment Crisis
GROWTH STUNTED, NO
OPTIMISM
By Shivaji Sarkar
The country may continue to have employment
crisis as it missed the recipe for quick progress through new job opportunities
after a prolonged period of slowdown and recession.
The Economic Survey 2020-21 (ES) neither speaks
about labour reforms, trends like flexi-staffing nor discusses lack of job
creation. The pandemic has led to severe job losses, cut in wages and work from
home and social distress. The previous ES discussed about impact of employment
or lack of it on the economy. This year it has deviated though a CMIE report
estimated that during lockdown 122 million, over 12 crore, people have lost
jobs in Bihar, Jharkhand, Uttar Pradesh, Uttarakhand, Gujarat, Chhattisgarh,
Maharashtra, Odisha, Andhra, Tamil Nadu, Karnataka, Telangana, Kerala,
Himachal, Haryana, Punjab, West Bengal, Assam and other States.
The worst hit has been the education.
Thousands of private secondary and primary schools have closed down and lakhs
have been thrown out of jobs without a sight of these being restored. The small
education entrepreneurs have gone broke and are not venturing to invest in
education now.
The average employment is estimated at 404
million (40 crore) during 2018-19. It reduced to 396 million (39 crore) by
March 2020. In April, 2020, it reduced by 122 million to about 282 million (28
crore). Since June unlocking, there has been some minor restoration of jobs but
in September 2020, the answer given by the Union Labour Minister in Rajya Sabha
does not indicate a figure.
Some jobs are restored but at wages lower than
the pre-pandemic period and many now on daily wages basis. About 15 million less people were employed in December 2020.
Salaried employees who accounted for 21 per cent of total employment in
2019-20, accounted for 71 per cent of the total job losses.
About 17 crore migrant workers are stated to
have lost their jobs, mostly daily wagers or casual workers. About 10 crore of
them walked back to their distant homes on foot facing inhuman miseries and
humiliation by the police in many States, including Bihar, Madhya Pradesh, Rajasthan,
Assam, UP, Odisha, Maharashtra, and others. At Bareilly in UP and other places remember
the sight when they were made to have a chemical bath by the police. The Economic
Survey citing lack of data says it cannot estimate how many migrant workers lost
their jobs. The Budget does not mention a scheme about them.
The loss has been not only to wagers and the
salaried workers but according to CMIE, 18 million
business-persons are estimated to have lost employment in April 2020. The
average count of entrepreneurs was 78 million in 2019-20. This fell to 60
million in April 2020, which included small traders and hawkers. Though
some of this class is returning to work post-lockdown, the salaried workers are
finding it difficult to get back to work.
The Survey did not touch the issue of
taxations, falling revenue collections though various business groups like CII
and PHDCCI have been clamouring for relief in income tax and other levies to
the individuals for raising their purchasing power for fast recovery. The Economic
Survey is silent also about private sector investment that has remained
stagnant for at least four years. The social security benefits of workers
particularly contributions to provident fund and ESIC have been hit despite the
government announcing subsidy or employers’ contribution.
Finance Minister Nirmala Sitharaman in her Budget
speech takes note of it, “Some employers deduct the contribution of employees
towards provident fund, superannuation fund, and other social security funds
but do not deposit these contributions within the specified time. For the
employees, this means a loss of interest or income and non-deposit”.
Her Budget does not ignore it but allocations
are dicey. The Atmanirbhar Bharat Rojgar Yojana or the EPFO subsidy scheme has
been allocated Rs 3130 crore against its initial allocation of Rs 22,810 crore
in November over three years. It may be an indication of official assessment of
economy remaining sluggish in 2021-22. Other employment generation schemes are
allocated Rs 976 crore this year against Rs 1424 crore in revised 2020-21 budget.
The NREGA was expected to increase number of
working days to 150 from 100. The new 2021-22 allocations of Rs 73,000 crore is higher than the BE for
FY’21 of Rs 61,500 crore, but it is less than what Rs 1,11,500 crore the
government actually spent on the programme for the 2020-21 fiscal. May be the
government hopes that additional 1.23 crore of the 2.69 crore MNREGA workers
would go back to their previous work as the economy opens up and the tally
would remain around 1.56 crore as it was pre-pandemic. It is expected to save
Rs 38,000 crore equal almost to the allocation for Covid vaccine.
The education budget at Rs 99312 crore in
2020-21 saw actual spending at Rs 85,089 crore in the pandemic year that saw
many private schools being closed down. It has been further cut to Rs 93,224 (Rs 54,873.66 crores for schools and
Rs 38,350.65 crores for higher education) in 2021-22 crore suggesting
that Central universities and school education would face crunch in their
delivery mechanism. Even it would not be easy to fund 100 new Sainik and 750
Ekalavya schools sought to be set up with the gasping private partnership.
The key anganwadi scheme of ICDS of
the Women and Child Development Ministry employing low-paid but key workers for
children and women’s welfare would go through a cut of Rs 5572 crore with a
reduced allocation of Rs 24,443 core. It is significant loss to poor women and
children.
Possibly the government feels that 34 per cent
higher capital expenditure of Rs 5.54 lakh crore in 2021-22 budget and Rs 4.12
lakh crore in 2020-21 would generate jobs. The large projects have longer
gestation and usually do not create jobs that fast.
The Budget discusses the new labour codes but
not of its benign or malign impact. All codes like 12-hour shift are not stated
to be labour-friendly. The Ministry of Labour and Employment has
been allocated allocated Rs 13,306.5 crore, Rs 413 crore less than the
revised estimate for 2020-21. The allocation for existing social security
schemes for workers is down 3.4 percent to Rs 11,104 crore.
The job picture in a post-crisis period does
not evoke confidence for a fast recovery. The progress in the new fiscal could
be far stunted than the optimism expressed.---INFA
(Copyright,
India News & Feature Alliance)
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