oppn parties The Mystery Behind 4 Million Jobs In 8 Months

News Snippets

  • In reply to a question in Parliament, the government says it is empowered to lawfully intercept, monitor or decrpyt information stored in a computer resource in the interest of sovereignty or integrity of India
  • Police stop a 12-year old girl on her way to the Sabarimala shrine
  • In Karnataka, the JD(S) indicates that it might support the BJP government if it falls short of numbers after the bypolls
  • Congress pips the BJP in local body elections in Rajasthan, winning 961 wards to the BJPs 737
  • After Airtel and Vodafone-Idea, Jio also indicates that tariffs will be raised from December
  • Sources in Shiv Sena say that they might revive the alliance with the BJP if it offers the 50:50 deal
  • A miffed Sanjay Rout of the Shiv Sena says that it will take "100 births" to understand Sharad Pawar
  • Mobile operators Vodafone-Idea and Airtel decide to raise tariffs from next month
  • Sharad Pawar meets Sonia Gandhi and says more time needed for government formation in Maharashtra
  • Justice S A Bobde sworn in as the 47th Chief Justice of India
  • Supreme Court holds hotels liable for theft of vehicle from their parking area if parked by valet, says "owner's risk" clause is not a shield from such liability
  • Finance Minister says she is receiving feedback from many sectors that recovery is happening as there is lower stress
  • Sabarimala temple opens, but police bar the entry of women below 50 years
  • Finance Minister Nirmala Sitharaman says Air India and BPCL to be sold off by March
  • Media person Rajat Sharma resigns as DDCA president
Two Muslim litigants in Ayodhya refuse to accept the Supreme Court order, say review petition might be filed
oppn parties
The Mystery Behind 4 Million Jobs In 8 Months

By Sunil Garodia

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.
People are not finding jobs. Several ruling party politicians have even advised the youth to sell pakoras instead, although selling tea would be a better option for then one can dream of being the prime minister one day. Jokes apart, even as the nation faces an army of unemployed, the Employees’ Provident Fund Organisation (EPFO) has reported, citing figures available with it, that more than 4 million jobs were created in the formal sector in the during September 2017 to April 2018. That translates to nearly 17000 jobs every day. So who is getting these jobs? What is the mystery behind a rush of enrolments in EPFO and the ground reality of jobless youth?

The BJP had taken to advertising this fact in a campaign (see the lead picture). But is this true? Are so many jobs being created or is it just that companies are shifting those they had employed informally to the formal sector to reduce profits? Is this post-GST data released by the EPFO believable as a standalone data or should it be compared with data in similar periods in the past? Clearly, more detailed study is needed to establish if new jobs were added or there was just a shift of those employed informally to the formal sector.

The Economic Times (ET) has unraveled the mystery in an excellent editorial. It so transpires that businesses in the formal sector were underreporting employee heads and outlays on salaries and wages. But ever since GST came into force, businesses find that artificial and common ways of reducing profits shown in the balance sheet have vanished. Hence they are bringing more and more workers on the rolls. This is a very plausible theory to explain the mystery.

Another big issue is that generation of the so-called black money has also diminished. Previously, businesses used to take purchase bills of sundry items from the market to reduce profits. The amount paid by cheque to the biller was returned in cash, after deducting the agreed “commission.” After GST, it is becoming increasingly difficult for big businesses to procure false bills. This has dried up their source of generating unaccounted cash.

As the ET has explained, this is a boon for workers as they will now be formally employed and enjoy all the benefits of the social security system in place, like minimum wages, fixed working hours, holidays, PF and ESI. It will also benefit trade unions and NGOs monitoring Indian exporters for fair labour practices. This is one more happy spin-off of GST that will benefit the economy.

read the ET editorial here