Citibank Says India is not creating enough jobs, RBI refuses

Citibank Says India is not creating enough jobs, RBI refuses

KAKALI DAS

A growing dispute in India revolves around job data, sparking a tug of war between the Indian government and a private bank. This conflict began last week when an economist stated that Citibank made significant claims about India’s job market.

They released a report with three key highlights.

1. Citibank’s report highlights that India is not creating enough jobs. According to Citibank, India needs to create 12 million jobs annually for the next decade to absorb new entrants into the job market. With many young people entering the market, the demand for jobs is high, but India is apparently not meeting the requirement of creating 12 million vacancies each year.

Despite India growing at around 7% annually, Citibank claims this growth rate is insufficient. At the current rate, India will be able to create only 8 to 9 million jobs per year, falling short by at least 3 million. This is the first claim in the report.

• The second claim concerns the quality of jobs. Citibank asserts that India needs to create better quality jobs where workers contribute more significantly to the country’s economic growth. The report highlights sectors like agriculture, noting that 46% of India’s workforce is engaged in agriculture, yet the sector contributes less than 20% to the country’s GDP.

Regarding manufacturing, less than 12% of India’s workforce is employed in this sector, indicating room for improvement in manufacturing jobs.

• The third claim addresses the pandemic’s impact on jobs. According to Citibank, there are now fewer workers in India’s formal sector than before the pandemic, with the share dropping from 24% to 21%. This means only 21% of India’s workforce has a job that pays a steady salary or wages. This is Citibank’s assessment.

Citibank’s report claims that India requires more jobs and higher-quality employment opportunities, along with an increase in workers employed in the formal sector. As for India’s response to these challenges, it remains to be seen.

The government, however, has rejected this report. This week, New Delhi issued a rebuttal, stating that Citibank did not consider all the official data released by the government.

The statement says, “The Ministry of Labour and Employment cautions against the selective use of private data sources that can lead to misleading conclusions about India’s employment scenario.”

Recently, the Reserve Bank of India (RBI) published its own jobs data, which challenges claims made by Citibank. The Indian Central Bank reported that 46 million Indians joined the workforce last year, marking the highest increase since the early 1980s. Additionally, job growth has surged by almost 6% compared to the previous year.

According to the RBI, the pace of job creation remains robust. This situation has essentially evolved into a battle of data sets, with New Delhi countering the Citibank report with its own data and numbers. Data serves as a potent tool in making arguments, and without independent verification of either set, the debate continues unresolved.

But here’s another indicator: lived experience shapes public sentiment and perception. Take the United States, for instance. Last year, their unemployment rate dropped to 3.4%, marking the lowest in 54 years.

Americans should have been happy about this, but they were not. Multiple surveys indicated that a majority of Americans felt their economy was in recession and that America’s economic situation was worsening.

So, while the data shows one picture, it may not have significantly influenced people to feel optimistic, and this perception also holds importance.

When fresh graduates struggle to find placements, when existing workers face job shortages, when companies shut down, and layoffs occur, people tend to question official statistics. India boasts one of the youngest workforces globally.

So, despite official figures indicating job growth, it’s evident that more needs to be done. It’s crucial for policymakers to be attentive to grassroots concerns and listen more closely to the people’s voices.

12-07-2024

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