There has been much cheering and back-slapping in corporate and mainstream media circles at the latest Index of Industrial Production (IIP) figures released on 13 March by the central govt. The IIP for January 2018 was reported to be up by 7.5% over January 2017. The index is a monthly measure of how much industrial production is taking place and how it is changing over time. So, it would appear that industrial production is picking up finally.
However, the same data also shows that in the current financial year 2017-18, that is, April 2017 to January 2018 the growth in IIP has been only 4.1% over the corresponding period of previous financial year, that is April 2016 to January 2017.
In other words, it all depends on what you want to find – the data is the same. The inescapable fact is that industrial growth – the backbone of any economy – remains weak, a few points up or down but nothing to write home about.
Why does the year-on-year comparison of January 2018 to January 2017 show a bigger jump? Its demonetization! Remember, November and December 2016 were the months when Modisarkar imposed one of the biggest economic disasters on India causing a nosedive in economic growth, industrial and agricultural production and employment. January 2017 was the month when the economy was still reeling from this attack. So, comparing this year’s January data with last year’s January is simply reflecting the low level last year and throwing up a larger increase. The better measure is an April to January comparison over previous year and that, as shown above is still weak growth.
CMIE’s latest data on unemployment confirms this by revealing that in the week ended March 11, unemployment rate stood at 7% while the labour participation rate was 42.6%. More comprehensive figures for February 2018 put out by CMIE say that 2.6 crore persons were unemployed, 1.1 crore were “marginally unemployed” and 40.7 crore persons were employed. CMIE defines “marginally unemployed” as those who are unemployed, willing to work but are not actively looking for a job.
The number of employed persons in the country is still below the level just before demonetization, as per CMIE data. In October 2016, 41.4 crore persons were in the labour force. They have still not returned to resume work.
In case you are wondering how the larger problem of joblessness – which Modi had promised to resolve once for all by creating 2 crore jobs – is playing out in the context of these rather merciless figures, then don’t look for any good news.
Every year, some 2.4crore people join the labour force technically – they cross the age of 14 years. But not all of them will actually start working because some are studying, some (mainly girls) are doing domestic work and so on. It is estimated that about 43% actually want to participate in work. That’s still a huge number – about 1 crore.
Compared to this massive, and growing, army of job seekers, growth of jobs has been a drop in the ocean by whatever jugglery you do to calculate the numbers.
So, the growth in IIP, or such other data that the govt. may churn out, is not helping solve the problem. But Modi and his sarkar is blissfully ignoring this mounting crisis.