The Indian government has pushed back against a recent report by Citigroup which cast doubt on India's ability to generate sufficient jobs despite a projected economic growth rate of 7%. The Ministry of Labour and Employment released a statement on Monday, taking strong objection to Citigroup's "dismal jobs forecast, " arguing that the report overlooks key data sources.
The crux of Citigroup's report lies in the substantial number of new jobs India needs to create to accommodate its growing workforce. The report estimates that India must generate roughly 12 million jobs annually over the next decade to absorb new entrants into the labor market. However, with a 7% growth rate, Citigroup predicts India might only manage to create 8-9 million jobs each year, falling short of the required number.
The Indian government refutes this claim, emphasizing the comprehensiveness of its data analysis. The Ministry of Labour and Employment pointed to data from the Periodic Labour Force Survey (PLFS) and the Reserve Bank of India's KLEMS dataset. Citing these sources, the ministry highlighted that India generated over 80 million jobs between 2017-18 and 2021-22, averaging roughly 20 million jobs annually. This period, significantly, encompassed the challenging years of the COVID-19 pandemic.
The government's rebuttal underscores a potential difference in methodology between Citigroup's analysis and the official data employed by the Indian government. While details of Citigroup's specific methodology haven't been publicly disclosed, the government's emphasis on PLFS and KLEMS data suggests a focus on formal and informal sectors, respectively. This could potentially paint a more comprehensive picture of job creation compared to analyses that rely solely on traditional employment metrics.
The disagreement between the government and Citigroup highlights the complexities of measuring job creation in a vast and dynamic economy like India's. The informal sector plays a significant role in Indian employment, and accurately capturing its growth can be challenging. Additionally, the nature of jobs themselves is evolving, with a rise in gig-economy work that might not be fully reflected in traditional data sets.
Going forward, this episode underscores the need for robust and transparent data collection methods to accurately assess India's job market. Collaborative efforts between the government, independent research institutions, and private entities could prove crucial in developing a comprehensive understanding of employment trends in the country. This, in turn, would inform evidence-based policy decisions aimed at fostering job growth and ensuring inclusive economic development.