Unemployment, Adani back on agenda, again!
We are still assessing the horrific impact of the Pulwama attack on our CRPF jawans, and debating whether a fitting reply has been given to the ‘terror’ madrasas in Balakot. As the front page discourse has shifted to ‘terrorism’, Pakistan (our eternal enemy), and the problem of Kashmir (our ‘internal’ enemy), unemployment and farm crisis have taken a back seat.
The Centre of Monitoring Indian Economy’s (CMIE) latest report that the unemployment rate has shot up 7.2 per cent in February this year, is a stark reminder that patriotic fervour has not diminished our internal problems.
The report says the unemployment rate is the worst in over two years, climbing from 5 per cent in February 2017 to 5.9 per cent in February last year and to 7.2 per cent this year. The absolute numbers are frightening: the labour force has contracted by 25.7 million since September 2016, and the number of persons employed in the same period has declined by 18.3 million.
There’s a double whammy here. The increase in unemployment comes along with a decline in labour participation. The labour participation rate — the proportion of working age population that is either employed or is unemployed but actively looking for a job — dropped from 43.8 per cent in February 2018 to 42.7 per cent in February this year.
Mahesh Vyas, CEO, and MD of CMIE, said: “This means that a lesser proportion of people are coming to the labour market. Even this lesser number is increasingly not finding jobs.”
CMIE’s data is frightening because far from growth, they reflect a slowdown in actual numbers. While there were 400 million people employed in February 2019, the year-ago figure was 406 million and 407.5 million in February 2017.
NSSO DATA VALIDATED
These figures have in fact validated the Union government’s National Sample Survey Office’s leaked report, which showed that the country’s unemployment rate stood at a 45-year high of 6.1 per cent in 2017-18. The government has made a valiant attempt to discredit the NSSO’s Periodic Labour Force Survey figures, denying they were ‘official’.
In protest, two of the authors of the report — PC Mohanan, acting chairman of the National Statistical Commission (NSC) and JV Meenakshi, an NSC member — stepped down from the organisation.
The reason for the rising joblessness is simple. It is the lack of fresh investment and the consequent slowdown in most sectors of the economy. In manufacturing, the slowdown showed up with the Gross Value Added (GVA) declining to 6.7 per cent in the third (September-December 2018) quarter from 6.9 per cent in the second (July-October) quarter and from 12.4 per cent recorded in the first (April-June) quarter. The latest Index for Industrial Production (IIP) for December 2018 slowed to 2.7 per cent from 8.7 per cent a year ago — figures cited by the RBI governor to justify an interest rate cut to bolster growth. Agriculture, the biggest source of employment too continues to stagnate with the GVA growth in farm, forestry, and fishing slowing down to 2.7 per cent in the third quarter, from 4.6 per cent a year earlier.
ADANI BAGS 6 AIRPORTS
While you were looking toward Pulwama and Balakot, the Adani Group bid and won the rights to operate six airports, edging out a slew of competitors. Promoter Gautam Adani, known for his proximity to the Prime Minister, started business with a trading company not so long ago. Today, he is the country’s tenth richest man.
The bidding process raised eyebrows and charges of cronyism on two counts: first, the Adani Group is a newcomer with little experience in this specialist area of infrastructure; and two, the Adani bids were way, way ahead of the others. In the case of Mangaluru, Adani will pay a revenue of Rs 115 per passenger a month to the Airports Authority of India (AAI), compared to the next highest bid of Rs 45.
The airport privatisation in favour of the Adanis has not gone unchallenged. The Kerala government has filed a writ petition against the grant of the Thiruvananthapuram International Airport to Adani Enterprises and the Kerala High Court has issued notices for hearing. The state government has contended that the AAI is bound to accept the proposal of the state-run Kerala Industrial Development Corporation Ltd, as it was the state that has contributed to the acquisition of land and development of the airport.
As the war clouds recede, eyeballs are coming back to concerns in respect of the economy. However, with elections around the corner, it is still a toss-up whether it will be the ‘national interests’ or the ‘jobs and farm’ issues that will dominate the discourse.