Some govt-affiliated economists are trying to browbeat the data, but what about the obvious indicators of rising unemployment?
DS Saksena | May 17, 2018
Statistics has come a long way from the time when British prime minister Benjamin Disraeli observed: “There are three kinds of lies: lies, damned lies, and statistics.” Statistics is now an accredited branch of applied mathematics; statistical methods are routinely used to prove or disprove theories in fields as apart as economics and medicine. Statisticians would, however, shudder to see the use to which statistics is put in the current Indian political discourse where every mistake known to statistical analysis is deliberately committed to prove doubtful hypotheses.
Proceeding from pre-determined conclusions and relying heavily on a priori reasoning, many columnists quote selective statistics to prove doubtful political points. In an article in the Indian Express on April 28, relying on CMIE data, Surjit S Bhalla, well known economist and a member of prime minister’s economic advisory council (EAC), concluded that 15 million jobs were created in 2017, as against an average of 4 million jobs per year in the UPA regime. Shortly thereafter, in another article in the Indian Express, Mahesh Vyas, the managing director of CMIE, observed that the claim of creation of 15 million jobs was absolutely false; rather incomparable data sets, cherry-picking, and dubious statistical analysis were behind the claims of robust employment growth. According to Vyas, only 1.4 million jobs were added in 2017. On May 2, we have an article by Arvind Panagariya, former vice-chairman of the NITI Aayog, in the Times of India, in which he claims that instead of the generally accepted figure of 12 million job entrants in a given year, the number of job entrants is only 7.5 to 7.8 million per year. This has naturally left lay readers quite confused; all economists involved in this debate are well respected yet all are canvassing diametrically opposite statistics, a bit like the doubt being created over the outcome of the battle of Haldighati.
Anecdotal evidence suggests that we are going through an employment crisis, with the IITs reporting placement of hardly 60% students. Engineering and management colleges which had mushroomed in the economic boom of the first decade of the millennium are shutting down at an alarming rate. More than 3 crore applications were received for 90,000 Class 3 railway jobs.
An advertisement for recruitment of 1,137 constables in Mumbai Police has got more than 2 lakh responses, which comes to around 175 candidates for each post. Applicants included three doctors, five lawyers, 167 MBAs, 423 engineers and a large number of post-graduates. Such instances underline the lack of suitable opportunities in the job market. However, a conjoint reading of what Panagariya and Bhalla have written would have us believe that job creation is galloping at twice the rate at which job-seekers are entering the job market. This is pure humbug; at last count 4.83 crore jobseekers were registered with the employment exchanges out of which a paltry 3.39 lakh had been placed. The current year’s professional tax collection for Maharashtra fell dramatically and was the lowest in the last five years; which would not have been the case had the conclusions drawn by Panagariya and Bhalla been correct.
The World Bank has expressed concern over the lack of formal jobs in the Indian economy while some home-grown economists have estimated that we would need a growth rate of 17-18 percent to employ all job aspirants. Demonetisation, GST and now bank frauds have all taken a heavy toll on the job market. Ambitious programmes for job creation like Make in India and Skill India have not taken off.
Such a depressing scenario would merit all-out efforts to rekindle the job market but the government seems to be working in an entirely new direction; they would rather deny the existence of any crisis in employment. The labour department’s quarterly survey has been done away with, to be replaced by monthly payroll data in the organised sector. After it showed unemployment at an all-time high of 5 percent in 2015-16, the government discontinued the Annual Survey of the Labour Bureau; a case of shooting the messenger who brings ill tidings.
The whole debate about the employment situation has its genesis in the electoral promise of the ruling party of generating 1 crore jobs per year. Perhaps in desperation, recently, the PM suggested that a pakoda seller should be counted as a person with good means of employment, which led to the proliferation of a number of pakoda jokes. On a more serious note, obfuscation of an emotive issue like unemployment may prove counterproductive. One may recall the India Shining campaign of 2004; the electorate refused to be convinced that India was shining, leading to the defeat of the incumbent government.
Sir Arthur Conan Doyle said: “It is a capital mistake to theorise before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.” The suspect statistics relied upon by Bhalla and Panagariya fully fit this narrative. Being closely aligned to the government, these gentlemen appear to be intent on forwarding the government’s agenda through their writings.
This entire episode reminded me of some ancient wisdom from the Ramacharitamanas. At the time when Sri Ram’s forces were camping just across Lanka, Ravana’s ministers were telling him to sit tight because Sri Ram’s army was a piddling force! This prompted Goswami Tulsidas to observe: “When gurus, doctors and ministers start talking sweetly out of fear then religion (and knowledge), health and the nation are quickly destroyed.”
Unfortunately, this saying appears to be coming true for us. Fearing the loss of goodwill, teachers in our top-notch schools rarely admonish their students, doctors in five-star hospitals seldom give bitter medicine and ministers keep busy congratulating themselves on their excellent performance; even when all indicators like law and order, employment, agricultural well-being keep turning increasingly negative.
We are lucky to have a press which exposes politicians and their cohorts. The only danger is that academicians would lose all credibility if self-serving theories, based only on doubtful facts, continue to be churned out at the present rate.
Saksena is a retired IRS officer.
(The article appears in the May 31, 2018 issue)
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