India Today Conclave 2018: Jobless growth talk is 'nonsense', real data will come out in household survey, says Arvind Panagariya

Economist and former vice-chairman of the Niti Aayog, Arvind Panagariya, on Friday said the talk of "jobless growth is nonsense". He said India grew at 7.3 per cent in the last four years. "Capital is not doing it alone as it has slowed down. So, employment must be growing," he said.
 
Participating in a session 'Democracy, Demography, Demand: The Mysteries of Missing Jobs' during India Today Conclave 2018, Panagariya said the household survey, which was last conducted in 2011, can only tell how much job creation has actually happened as they cover the uncovered sectors. "We will get a clear picture when the 2017-18 household survey will come out. The larger problem is underemployment not unemployment. That is where the real action should happen. "We give free pass to the industrialists but what have they done to drive job creations?" Panagariya asked.
 
Industrialist Uday Kotak, who was also present on the panel discussion, said a data by the Asus study in 2017 showed between the age of 14 and 17 in rural areas, 57 per cent youths don't know how to do division, 42 per cent can't read English, and 41 per cent don't know how to read time on a watch. "If we want to solve the job creation problem, provide skill development and improve the education system. We need to fundamentally change the basis of how we look at jobs. And the three areas where most number of jobs can happen are education, health and security services," he said.
 
Kotak also said these three sectors are significantly underinvested in terms of jobs creation. "In 60s and 70s, India and China were more or less on the same level of GDP. In 2015-16, India's per capita GDP was about $1800, while China's was nearly five times more at $8,000." He said for India to catch up with China, India needs per capita GDP of around 8 per cent for 20 years. "And then if you add growth in per capita, 19 per cent per annum GDP growth is needed to reach at the level of China," he said.
 
Centre for Policy Alternatives Society Chairman Mohan Guruswamy highlighted the country has seen the highest level of unemployment in the last 17 months. "The India Employment Report of 2016 says that the total unemployed club in India is 117 million. Around 13 million of them are openly unemployed. Around 52 million are in disguised unemployment, while another 52 million are women who don't work. You can gloss it over but the fact is India's richest 1 per cent corner 73 per cent of wealth generation. Now that is also growth, but that does not create jobs," he said.
He added that the biggest indicator of job situation is how much capital the government is utilising. "Only 9 per cent of the Budget today is spent on capital expenditure, which means for every Rs 100 spent on running the government, we spend only Rs 9 on creating something new."
 
On the issue of the industry's role in job creation, Uday Kotak said there's has been a significant change in the industry in the 10-15 years. "If you look at the industry before 10-15 years, it focused on putting more capital - most of the time bank capital - and a disproportionate focus was put on capital as the basis of growth. So jobs were not happening at a speed with which the capital allocation was happening. Right now, digital has changed the landscape of productivity."
 
He said that the industry has time and again suggested the government on ways to create more jobs. "There is a tax incentive that, for every job you create for 240 days in a year under Section 80JJA, gives you a 30 per cent break on every new job.  The traditional lala industrialists are in a bit of shock, and which is where we are seeing negative jobs. Flipkarts, Olas and Ubers of the world are creating the jobs. But the old industry is destroying the jobs," he said.