I am very happy that more and more people are talking about some kind of universal basic income or income support scheme for farmers, Yashwant Sinha, Former Finance Minister, tells Supriya Shrinate of ET Now. Sinha also says none of the data released by government has any credibility and that demonetisation and GST played havoc with employment generation.
Reports seem to suggest that unemployment rate in India in 2017-18 was at a 45-year high. The last time we saw unemployment this high was in 1972-73! How bad is 6.1% unemployment for an economy that claims to be the fastest growing in the world?
It is extremely bad. And that perhaps is the reason that the government is not allowing this data to come out officially. I have been saying for some time now that government statistics cannot be believed anymore because we are aware of any number of instances including the bad data series on GDP growth which was released only after being manipulated. So, none of the data being released by the government has any credibility now. The government has been interfering with the data, manipulating it and this is the latest example of it.
Everyone is aware on the basis of anecdotal evidence that both demonetisation and GST played havoc with existing employment. Why do you think these people had to raise the rural employment guarantee scheme budget to Rs 62,000-63,000 crore per year? It was only because the centres of economic activity all over the country have been destroyed. The people who used to work there have gone back, especially from the poorer states of Bihar, Jharkhand, Uttar Pradesh and Madhya Pradesh.
Is there any nuanced way to look at this data? More people are looking into this but the counter argument is that labour force participation rate (LFPR) has been consistently going down since 2004. It was 39.5% in 2011-12, it has actually gone down to 36.9% in 2017-18. How do you explain that?
Yes, one reason which is offered for this is that more people are getting educated, joining educational institutions and going to skilling centres. They are looking for quality employment and there is a constant need for them to improve themselves. That is the reason why perhaps there are more younger people in educational institutions and the skilling centres than out in the job markets seeking jobs. At some point of time, when the cycle completes itself, they will start seeking jobs. The point to be noted is that despite the labour participation rate going down, the unemployment rate is going up, which means that we are not able to cater to the needs of lesser number of people seeking jobs.
One statistic which really stands out and which is where the focal point of the budget perhaps is going to be the joblessness for rural male youth between 15 to 29. It was at 5% in FY2012. That has gone up to 17.4% in FY2018. Add to that the rural stress that is already there. What can the budget possibly do to move the needle on jobs?
Not this budget. This budget cannot do anything because the term of this government or the mandate of this government is coming to an end over the next three months. A government whose term and whose mandate is coming to an end has no business dealing with the future and the established constitutional practice is that they will only present a vote on account and seek three months or four months expenditure sanctioned from parliament.
But that is precedent. Nothing legally binds them to not be able to do something?
This is the argument that is being advanced by the government. The conventions of the constitution are as important and as valid as sacrosanct as the written word of the constitution. If we violate a constitutional convention, we cannot say no that it is not written, it has evolved over last seven decades in our country. The entire British system works on the basis of conventions, there is no written constitution. So conventions cannot be treated in cavalier fashion like this and say that there is no written word.
There are two big issues on which perhaps election 2019 is going to be fought; a) jobs and b)agriculture. I know the budget can possibly not move the needle and you believe it is from a constitutional perspective not right to do so either. But can the budget incentivise formal sector job creation by the private sector?
I was asked this question by another interviewer and I said for job or employment creation, let us look at the amount of work which we have to do in this country. We have to build thousands of kilometres of national highways, lakhs of kilometres of rural roads and construct crores and crores of houses.
Then there are pending schemes like the SagarMala which is the parallel in the sea for the national highway programme. Then we have the linking of rivers to be done. Then we have to set up so many new townships as China has done, where people will move only a short distance away from the village and start living in better surroundings. There they will find employment opportunities also. There is so much work to do. Only if this country started doing that work, we will have enough employment opportunities.
Recently, there was a report in the media about employment generation and GDP growth. They started from 1972 and found that the Vajpayee years from 1999 to 2004 were the best.
But employment generation was high because a lot of economic activity was happening. The economic blueprint of the budget is going to be laced with political realities of the day. Are you in some sense relieved that as far as agriculture is concerned, nobody is now talking about a blanket loan waiver?
Agriculture is clearly in focus because of much agrarian stress taking place in our agriculture and rural areas. The reason for that is very obvious. Agricultural prices in the market have crashed and the farmer is not getting adequate prices for his produce. Something has to be done. I am very happy that more and more people are talking about some kind of universal basic income or income support scheme for the farmers. Much more important than loan waiver to my mind is the issue of guaranteeing an income for the farmer which will resolve the conflict between the farmer who is the producer and the consumer, that is the whole society. This is the only way in which that conflict can be removed.