india

Updated: Sep 22, 2019 13:08 IST

The government will soon publish a set of jobs data by counting very small businesses employing less than 10 people, including those with just one employee, by tracking Mudra loans their proprietors have taken, an official aware of the plan said. The data will be the first attempt to capture the smallest segment of a vast informal sector that escapes most economic surveys.

The Pradhan Mantri MUDRA Yojana (PMMY) is a credit scheme launched by the Modi government on April 8, 2015 for providing loans up to Rs 10 lakh to “non-corporate, non-farm small and micro enterprises”. These loans, given by commercial banks and small finance institutions, are classified as Mudra loans.

The establishment-based survey by the labour bureau, which is under way and likely to be published by year-end, will count businesses or employment generated by such firms that are outside the good and services tax network, income tax or any other attribute of formal employment, such as pensions and insurance.

Effectively, this set of data will also count proprietary shops or self-owned, self-operated businesses which may have no hired labour, such as a roadside vendor.

“The decision had been taken last year based on the recommendations of a task force. This will reveal a fuller picture of employment generation in the economy,” a labour bureau official said on condition of anonymity.

The country’s first periodic labour force survey (PLFS) for July 2017-June 2018 released by the government in June showed an unemployment rate of 6.1%, the highest in about four decades. The last “unemployment-employment survey” was carried out in July 2011-June 2012, according to which the all-India unemployment rate was 2.7%.

Each year, an estimated 12 million Indians enter the labour force, but there’s a crunch of jobs for them. The pressure was apparent: in 2018, when at least 28 million people applied for about 90,000 vacancies announced by India Railways, the country’s biggest employer.

In any jobs survey, people with jobs are categorised as employed. People without jobs but looking for work are considered unemployed. The labour force participation rate is the sum of people who are employed plus people who are not employed. In a rough-and-ready sense, the unemployment rate then is simply the number of unemployed divided by the labour force times 100.

Pressure has been mounting on the government, for which the PFLS proved to be an embarrassment, to create a sufficient number of jobs. The official cited above, echoing the government’s stance on jobs, said that since there has been no way so far of assessing very small enterprises and self-owned businesses, the country lacks a comprehensive picture of job creation.

According to the Bharatiya Janata Party (BJP)’s election manifesto, more than 170 million entrepreneurs have availed of loans under the Pradhan Mantri Mudra Yojna. In 2018-19, loans worth Rs 3.11 lakh crore were disbursed under the Mudra scheme, up from Rs 2.46 lakh crore in the previous year.

According to Amit Basole, a labour economist with Azim Premji University, while jobs have been created, there is a question of sufficiency and quality.