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The Hindu Editorial Analysis- 20th July 2024 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

The Hindu Editorial Analysis- 20th July 2024 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC

 Living in Denial About Unemployment 

Why in News?

Prime Minister Narendra Modi, referencing a Reserve Bank of India report, asserted substantial job creation in recent years, challenging the Opposition's claims of high unemployment. However, various sources, including the Centre for Monitoring Indian Economy, present conflicting reports, highlighting discrepancies in employment data, particularly between the organised and unorganised sectors.

Prime Minister’s Statement and Employment Data

  • The Prime Minister of India cited a Reserve Bank of India (RBI) report, claiming the creation of 8 crore jobs in the past 3-4 years.
  • This statement was made to counter the Opposition’s narrative of high unemployment.
  • The Prime Minister addressed reports from financial institutions like Citigroup, which pointed to inadequate employment generation in India.
  • He emphasised that upcoming infrastructure projects would create more jobs.

RBI ‘Data Manual’ and KLEMS Database

The Hindu Editorial Analysis- 20th July 2024 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC

The Prime Minister referred to a Reserve Bank of India 'Data Manual' released on July 7, titled ‘The India KLEMS Database.’

  • The KLEMS Database includes measures of:
    • Gross Value Added
    • Gross Value of Output
    • Labour Employment
    • Labour Quality
    • Capital Stock
    • Capital Composition
  • The database covers 27 industries across the entire Indian economy.

State Bank of India Report

  • Following the Reserve Bank of India’s release, the State Bank of India published its own report to counter claims by financial institutions.
  • The State Bank of India reported:
    • 8.9 crore jobs were created in manufacturing and services from FY14 to FY23 (excluding agriculture).
    • 6.6 crore jobs were created from FY04 to FY14.
  • The report noted India’s total labour force is 59.7 crore, close to the 56.8 crore figure from the recently released Annual Survey of Unincorporated Sector Enterprises (ASUSE) survey.
  • The State Bank of India highlighted significant differences between these figures and those from private employment surveys.

Centre for Monitoring Indian Economy Report

  • The Centre for Monitoring Indian Economy (CMIE), a private data-gathering agency, reported in July that the unemployment rate rose to an eight-month high of 9.2% in June 2024, up from 7% in May.
  • This report contrasts sharply with the official narrative of significant employment generation.

Ground-Level Reality and Public Confusion

Unemployment as a Major Issue

  • Ground reports indicate unemployment as a major issue, with a large number of applicants for limited job vacancies.
    • In February, around 47 lakh applicants competed for approximately 60,000 constable positions in Uttar Pradesh.
    • In 2022, 1.25 crore aspirants applied for the Railway Recruitment Board’s Non-Technical Popular Categories recruitment exam.
    • Protests erupted in Bihar, Uttar Pradesh, and other states when the Agnipath scheme was announced in 2022.
  • The situation is particularly grim for educated youth, who are expected to lead the ‘demographic dividend.’

Differences in Data Sources

  • Confusion over unemployment rates arises from differences in various databases.
  • The KLEMS data measures productivity growth but does not independently estimate employment, relying on official data from sources like the National Sample Survey Office (NSSO) and the Periodic Labour Force Survey (PLFS).
  • This reliance on pre-existing official data raises questions about the employment figures presented by government agencies.

Complex Structure of the Indian Economy

Organised and Unorganised Sectors

  • India’s economy comprises both organised and unorganised sectors.
    • Reliable data is available for the organised sector through annual statutory publications.
    • However, data for the unorganised sector, which employs 94% of the labour force, is sparse.
      • This sector includes approximately 11 crore farms and 6.5 crore micro, small, and medium-sized enterprises (MSMEs), making annual surveys challenging.

Data Collection Challenges

  • Data for the unorganised sector is collected periodically via the Census every ten years and the ASUSE survey every five years.
  • The government aims to conduct the ASUSE survey annually, but this survey relies on outdated data from the Census and the Urban Frame Survey (UFS), covering the period from 2012-17.
  • The use of pre-2016 data poses challenges due to significant economic shocks from demonetisation, the Goods and Services Tax introduction, the Non-Banking Financial Companies crisis, and the COVID-19 pandemic, making pre-2016 data unreliable for current sampling.

Differences in Labour Force Surveys

  • The PLFS, an official data source, differs significantly from CMIE data due to differences in employment definitions.
    • CMIE adopts the International Labour Organization definition, counting only those who earn an income from work as employed.
    • In contrast, the PLFS includes those who work without income, such as unpaid family workers or those engaged in subsistence activities.
  • This difference results in the PLFS reporting higher labour force participation rates (50%-55%) compared to CMIE (40%-45%), leading to a discrepancy of about 90 million people.
  • The PLFS also counts the disguised unemployed and underemployed, making it appear that almost no one is unemployed.
  • CMIE highlights those who have stopped looking for work, a form of unemployment not recognized in official data.

Conclusion

The real situation of unemployment is evident from frequent reports of youth struggling to find work and facing difficulties in competitive examinations. Despite this, the government often denies the severity of the problem, citing data with significant gaps and limitations.

The document The Hindu Editorial Analysis- 20th July 2024 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC is a part of the UPSC Course Current Affairs & Hindu Analysis: Daily, Weekly & Monthly.
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FAQs on The Hindu Editorial Analysis- 20th July 2024 - Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC

1. What is the main focus of the editorial in The Hindu on 20th July 2024?
Ans. The main focus of the editorial in The Hindu on 20th July 2024 is the economic implications of the recent government policy changes.
2. How does the editorial discuss the impact of the policy changes on the business sector?
Ans. The editorial discusses how the policy changes have created uncertainty in the business sector, leading to a decrease in investments and growth.
3. What are some of the key recommendations proposed in the editorial to address the economic challenges mentioned?
Ans. Some of the key recommendations proposed in the editorial include increasing government spending, providing incentives for businesses, and improving infrastructure.
4. How does the editorial suggest addressing the issue of unemployment in the current economic scenario?
Ans. The editorial suggests that the government should focus on creating more job opportunities through targeted policies and skill development programs.
5. What is the overall tone of the editorial in The Hindu regarding the economic situation discussed?
Ans. The overall tone of the editorial in The Hindu is critical, highlighting the challenges and offering suggestions for improvement in the economic landscape.
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