Saroj Kumar
The agility of the economy is linked to the pockets of the common man. If people have money in their pocket, they will spend it, only then the demand will increase in the market. When demand increases, jobs will be created. If profit is the fundamental principle of the market, then the market will not create jobs by coping with losses. Unemployment remained a serious matter of concern even before the pandemic. But during the pandemic we had got a full head to blame for unemployment.
Today, when economic activities have returned on track, then the managers of employment are scratching their heads on the question of unemployment. The employment figures for March 2022 paint a scary picture of the economy. On the one hand, jobs are decreasing, on the other hand the unemployment rate is also and on the third side, after wandering from rate to rate, the disappointed condition is returning to the unemployed homes. The economy has become a barren land, where employment has become impossible to sprout.
When the unemployment rate came down in March 2022, economic pundits interpreted the economy to be on the mend. As soon as the employment figures came, the hidden misfortune in this sense came to the fore. Data from the Center for Monitoring Indian Economy (CMIE) shows that the unemployment rate has come down to 7.60 per cent in March 2022 from 8.10 per cent in February 2022.
Jobs should have increased due to reduction in unemployment rate, but here fourteen lakh jobs were reduced. Then what does it mean to decrease the unemployment rate? The direct meaning of the unemployment rate is related to the participation of workers in the labor market. The unemployment rate is based on the average of the employed and unemployed workers available in the labor market. If workers do not go to the labor market to ask for work, then the unemployment rate will automatically come down. This was the reason for the unemployment rate coming down in the month of March.
The Labor Participation Rate (LPR) has come down to 39.5 per cent in March 2022 from 39.9 per cent in February. That is, the lower the labor participation rate, the more the unemployment rate has come down. Surprisingly, the labor participation rate in March remained below the rate during the second wave of the pandemic, when economic activity was severely disrupted by many restrictions. During that period (April-June, 2021) the average labor participation rate was forty percent and the minimum labor participation rate was also 39.6 percent in June.
In the last five years, between 2017 and 2022, the labor participation rate declined by about six per cent. About 90 crore people are employable in the country. Whereas in March 2022, the number of workers in the labor market decreased from eight million to eighty eight million. That is, in March alone, eighty-eight lakh people left the job and sat at home. This is the minimum number of labor force in the labor market in the eight-month period from July 2021. The month of March is considered the busiest month of the year in terms of economic activity, so the occurrence of jobs along with labor participation rate in the labor market is a sign of a major crisis in the economy. This is the first such decline in the number of workers in the labor market in a period of three years since June 2018.
The jobs that are left in the job market, now let’s look at them. After a decline of fourteen lakhs in March 2022, the total number of jobs fell to 39.6 crores, which is the lowest level since June 2021. If there was no agriculture sector, this low level of jobs would have gone into the abyss. Most of the jobs in the agriculture sector, however, are kept in the pseudo-category, which is simply called ‘baith ki forced labor’.
Workers are believed to return to agriculture when jobs are not available in other sectors. In the same agricultural sector, one crore and three and a half million jobs increased in March 2022, due to which the loss of one crore sixty-seven lakh jobs in other sectors was largely compensated. The agriculture sector may have saved the employment figures from going into the abyss, but what is the condition of the workers working here is not hidden from anyone. The daily income of the farmer from farming is only twenty seven rupees.
More than two crore jobs have been lost in the last five years. The sectors where jobs were created in March 2022 include those that are known to generate the most jobs, such as industry, manufacturing, construction, mining and retail. Industrial jobs decreased by seventy six lakh in March, 2022. Forty-one lakh jobs were lost in the manufacturing sector, with most jobs in the organized sector such as cement and metals. Twenty-nine lakh jobs were lost in the construction sector and eleven lakh in the mining sector.
The India Manufacturing Purchasing Managers’ Index (PMI), which shows the health of the manufacturing sector, declined to 54.0 in March from 54.9 in February. This figure represents the slowest growth in factory related activity since September 2021. After the pandemic-hit financial year 2020-21, except July 2021, the manufacturing sector was on a recovery path throughout the financial year 2021-22. This trend was expected to continue in March as well. But the situation turned sour.
After the resumption of economic activities, the construction sector was also expected to pick up. But this sector also stalled after reaching six crore forty lakh jobs. In the year 2018, six crore eighty lakh to seven crore twenty lakh people were employed here. In March 2022, less than six crore twenty lakh jobs were left in the construction sector. It was also a gloomy time for the retail sector, where jobs were reduced to six crore and fifty-six lakhs. Seven crore people were employed here in February 2022.
The loss of jobs in the non-agriculture sector is a sign of slowdown in these sectors. But how did this slowness turn into agility? That is the big question. The agility of the economy is linked to the pockets of the common man. If people have money in their pocket, they will spend it, only then the demand will increase in the market. When demand increases, jobs will be created. If profit is the fundamental principle of the market, then the market will not create jobs by making losses. The profit principle is driving up inflation. This is a dangerous trend. The country created a history of exports worth more than 400 billion dollars in the financial year 2021-22.
According to this export figure, there should not have been a gap between demand and employment in the market. But all economic indicators suggest this jump in exports is circumstantial in nature, an immediate consequence of the restoration of disrupted supply chains. If this pace of exports continues, then employment can be expected to increase. But volatile global economic conditions make this unlikely.
The agriculture sector and the public sector have been in the role of protector in every hour of crisis, regardless of profit or loss. The need of the hour is to strengthen both these areas. In 2019-20, where the growth rate of the agriculture sector was five and a half percent, the non-agriculture sector was decelerating with a growth rate of three and a half percent. In the financial year 2020-21, when the economy plunged by 6.3 percent, the agriculture sector was still growing at the rate of 3.3 percent. Even in 2021-22, the economy has only come out of the pit, while the agriculture sector is on the path of continuous growth with a rate of 3.3 percent. In such a situation, at least the agriculture sector should be given an independent controlling form, so that a strong base of employment can be created beyond the control of the market.