Nearly 51 mn person years of employment created annually in last 10 years

A total of 51.4 million person-years of employment has been generated annually between 2014 and 2024 through both governance-led and credit-led interventions of the central government, revealed the latest report released by a private think tank on Monday.

Credit-led interventions such as the Pradhan Mantri Mudra Yojana contributed nearly 31.6 million person-years of employment annually on average since 2014, while governance-led initiatives like the Swachh Bharat Mission and the Pradhan Mantri Awas Yojana added nearly 19.8 million person-years of employment.

In essence, the report titled ‘Employment Generative Impact of ModiNomics: The Paradigm Shifts’, by SKOCH Group, indicates that a total of 510 million person-years of employment have been generated during the past decade under the Bharatiya Janata Party-led government.

However, Santosh Mehrotra, visiting professor at the University of Bath, argues that the report’s claims regarding fractional employment overlook the issue of underemployment.

“Under the concept of ‘fractional employment’, it is highly probable that individuals are working irregularly, earning lower wages, and lacking any form of protection,” he added.

A person-year is a unit of measurement for the amount of work done by an individual throughout the entire year, expressed in hours.

The report considers 260 person-days as equivalent to one person-year. For example, the report assumes that 160 person-days are required for constructing one house under the Pradhan Mantri Awas Yojana — Rural.

The report analyses the employment-generative impact of structural credit from formal sources and fractional employment in the Indian economy. It aims to dispel the ‘myth’ of small amounts of credit being incapable of generating employment.

To achieve this, it utilises ongoing field research and scheme-wise data from 12 central schemes such as the Mahatma Gandhi National Rural Employment Generation Scheme, Pradhan Mantri Kaushal Vikas Yojana, PM-SVANidhi, as well as production-linked incentive schemes, among others, to draw conclusions. However, the findings of the report do not include the gig economy.

Sameer Kochhar, chairman of SKOCH Group, noted, “A criticism often levelled against these schemes is that low wages may be inadequate for sustenance, but what is forgotten is the in-kind money transfers received by the same target groups, such as food security, health facilities, subsidised gas, and so on. The report has not also used any official data or statistics on employment generation such as the Periodic Labour Force Survey or Employees’ Provident Fund Organisation’s payroll data.”

The report also highlights that it takes an average loan of Rs 85,000 to generate one credit-linked employment, which is labour-intensive compared to Rs 90,000 in 2017.

Moreover, the study observes that the credit gap has decreased by 12.1 per cent over the past nine years, from 88.7 per cent in 2015 to 76.7 per cent in 2022. It also suggests a positive correlation between a reduction in the credit gap, a decrease in multidimensional poverty, and an increase in net state domestic product.