How the Modi Government Pads up Job Numbers

In response to a question put up by a group of MPs in Lok Sabha, Labour and Employment Minister Santosh Gangwar said on December 17 that the Pradhan Mantri Employment Generation Programme (PMEGP) has “generated” 17.6 lakh jobs since 2014-15. He gave year-wise figures till November 30, 2018.

These figures seem to be highly inflated and do not have any evidentiary basis. That the Labour Minister is reporting these suspect figures to Parliament is even more remarkable. A similar claim has been made in the Transforming India section of the myGov.in portal which publicises the government’s achievements. There it is claimed that “in the last three years” 11.3 lakh jobs were created under PMEGP. The period presumably refers to 2015-16 to 2017-18.

According to data available on the PMEGP website, during 2014-15 and December 24, 2018, a total of 1,44,596 projects were given credit subsidy under PMEGP. Under the programme, micro-entrepreneurs apply for projects to set up small enterprises, and, after clearing by the District Level Task Force Committee (DLFTC) and subsequently by banks, they are given 25% of the credit needed while the balance is disbursed as a loan.

Nobody maintains any record of how many persons are employed in these enterprises – not the DLTFC, not the banks, nor the Khadi & Village Industries Corp. (KVIC), which is the nodal agency for this programme. Moreover, there is no record of whether the persons so employed are fresh entrants or have simply shifted from one job to another. This is important because the government claims are made to sound as if new jobs are being created by the programme.

So, how does the government arrive at a number for the employment generated? The only way it could be doing this – apart from cooking up numbers – is if they were relying on a sample survey carried out in 2017.

This study was done by an institute called Management Development Institute  (MDI) located in Gurgaon. According to the official Press Information Bureau release, MDI carried out a survey of a 5% sample of enterprises set up under PMEGP between 2012-13 and 2015-16. This worked out to about 10,108 units. The study was done in 2017.

What MDI found was that average employment in these PMEGP enterprises was 7.62 persons and the cost of creation per employee was a whopping Rs.96,209.

Has the Labour Minister taken the average employment of 7.62 per unit and calculated for the whole period? This too looks doubtful!

At this rate, the total employment “generated” would be about 11.56 lakh only and not 17.6 lakh, as claimed in Lok Sabha. What the Minister is asking MPs and the general public to believe is that on an average, each of these new enterprises is employing 12 persons! That is 70% more than what the survey estimated.

Whichever way you slice and dice it, the inescapable conclusion is that the Modi government is padding up figures of job creation. That’s because this is the single biggest failure of theirs, with unemployment raging in the country at about 8.9%, as per CMIE’s (Centre for Monitoring Indian Economy) latest data.