Low growth worries PlanCom on job creation

The issue is likely to figure in its assessment of the 12th Five-Year Plan

As it sets about preparing the groundwork for the mid-term appraisal (MTA) of the 12th five-year Plan, the Planning Commission is worried over the impact of slow growth in the first two years of the Plan (2012-13 and 2013-14) on employment and livelihoods.

A Planning Commission official said returning to the high-growth trajectory at the earliest was vital because of the impact slow growth had on employment generation. In 2012-13, India’s economic growth fell to a decade-low of five per cent. And, growth might not see any improvement this financial year, too.

Under the best-case scenario, the commission had targeted average annual growth of eight per cent for the Plan period. The commission official, however, said generating employment was much more important mere headline growth. “Whether we achieve eight per cent growth in the 12th Five-Year Plan or not is just of academic interest; what is not is the impact lower growth will have on livelihood and employment. The MTA should capture all these, as and when it is prepared,” he said.

The commission has started holding a series of meetings with all departments and ministries to prepare a blueprint for the MTA. Officials in the know said the impact of slow growth on job creation was expected to figure prominently in its blueprint.  “Though the MTA will start only after a new government takes over, we have started some groundwork on this and now, it is up to the new commission to accept our assessment and groundwork, or start afresh with a complete set of parameters, targets and goals,” the official said.

Typically, the commission does the mid-term review of a Plan document in the third year of the Plan period. But since the commission’s term is co-terminus with the government, it is generally reconstituted when a new Union Cabinet takes charge. “Though the meetings are mid-year reviews, they will provide groundwork for our assessment of the 12th Plan in the MTA,” the official said.

On Thursday, Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters the final work on the mid-term review would start as soon as the commission would have revised estimates (of expenditure) for this financial year, but “a lot of official work will be done now”.

The official said the efforts of the commission to understand the impact of low growth on employment generation had been handicapped by the lack of updated and accurate data on employment. According to data by the National Sample Survey Organisation, unemployment in India had risen 10.2 per cent between 2010 and 2012. Compared with 9.8 million on January 1, 2010, 10.8 million people were without jobs as on January 1, 2012.

The 12th Plan period started April 1, 2012.

The official added only if India managed to record 6.5 per cent growth from 2014-15, would it be able to say it had reverted to a faster growth trajectory. This, he said, would set the tone for a full recovery from 2015-16.

By the commission’s own admission, employment generation during the five years ended 2009-10 rose at a snail’s pace and the biggest hope, the manufacturing sector, recorded job losses. According to the 12th Plan document, employment in manufacturing fell by five million between 2005-06 and 2009-10, after adding about 12 million jobs between 2000-01 and 2004-05. The document added the trend in manufacturing had to be reversed, as 183 million job seekers were expected to join the workforce through the next 15 years.