t is one of those paradoxes that just as we were beginning to bemoan the lack of growth, with gross domestic product (GDP) hitting a low 5 per cent in the April-June quarter this fiscal, we are beginning to see an upward trend in jobs.
Regardless of whether growth accelerates or decelerates, there is the possibility of jobs growth being a variable independent of growth.
It is high time we abandoned our politically-induced fear of jobs data. If we don’t know if jobs are growing or shrinking, we will not be able to do anything about it.
According to the Centre for Monitoring Indian Economy’s (CMIE) four-monthly employment surveys, in both the January-April 2019 and May-August 2019 periods (read here), while we were beating our breasts about the accelerating slowdown, employment actually grew by 4 million, from 400.9 million in September-December 2018 to 404.3 million in January-April 2019, and further to 404.9 million in May-August 2019.
The good news for the Narendra Modi government, which has been under attack for job losses and slowdown, is that even the CMIE surveys, once seen as harbingers of only bad news on jobs front in the post-demonetisation period, is now bringing relief to the government.
But here’s the problem: the period January-June 2019, which covers two quarters covering both the busy period of the last quarter of fiscal 2018-19 and the first quarter slack of fiscal 2019-20, were quarters when GDP slowed down. These were precisely the months in which jobs increased.
To be sure, jobs may rise or decline with a lag following growth or slowdown, but one has to also consider the possibility that the linkage between growth and jobs is now weaker than ever. Regardless of whether growth accelerates or decelerates, there is the possibility of jobs growth being a variable independent of growth.
Originally authored by: by R Jagannathan