oppn parties The Mystery Behind 4 Million Jobs In 8 Months

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  • Congress Working committee asks Rahul Gandhi to take up the position of Leader of Opposition in Lok Sabha. Gandhi says he will consider the request
  • RBI governor Shaktikanta Das said that gold was shifted to India as the quantum of RBI gold abroad had increased due to recent purchases
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  • A four-member panel will review NEET-UG results of 1563 candidates to check if they were given extra marks for exam time loss
  • Mamata Banerjee says her party will not join Modi's oath-taking ceremony. Also says INDIA bloc might stake claim to form government later
  • K C Tyagi of the JD(U) dropped a bombshell when he said that Nitish Kumar was offered the post of prime minister for switching sides. Opposition leaders rubbished the claim
  • This May was India's hottest month in 36 years says IMD
  • T20 WC: India take on Pakistan today. Telecast to begin at 8pm IST
  • T20 WC: Afghanistan stun New Zealand and Bangladesh win against Sri Lanka
  • T20 World Cup: Australia beat England by 36 runs. This spoils England's chances of making the playoffs as they have lost both their matches till now
  • Heat wave continues in the country as monsoon moves slow
G7 commits to promote India-Europe corridor
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The Mystery Behind 4 Million Jobs In 8 Months

By Sunil Garodia
First publised on 2018-06-27 13:44:26

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.
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