 Hello and welcome to NewsClick. Today we have with us Professor Surajit Bajumdar from Jawaharlal Lahari University and we will be discussing what the mystery of the numbers are, that the Indian economy should is currently passing through a phase where what we see is not what we hear and what we hear is not what the government is telling us. First let us look at the employment scenario because there has to be there seems to have been some figures by which at least some of the consultants to Niti Aayog, some of the government ministers, Mr. Jayatli and Mr. Modi has also all talked about increased employment which are either not being captured or have been captured and contested, prominent fund data etc. How do you see the employment data because at the moment we are not talking really of the employment scenario but is it what are we really measuring and what is the government telling us? Well if one looks at the data that is being presented particularly with regard to provident fund. So the figure to put things in perspective is that the claim is that there are about the total of 6 crore people who have EPF accounts, 60 million people have EPF accounts of which roughly about 48 million or 4.8 crores have some kind of regular payments being made. Now if one looks at the total workforce in India our population which is in the working age group is 780 million or 78 crores and those who are designated as workers, a lot of our women are designated as non-workers are also around 500 million or 50 crores. So we are really talking about employment which on a whole is only about 10 percent or less than 10 percent of the total employment in the economy. Formal sector employment that is 10 percent of the total employment in the economy. Now suppose there is some increase in that 10 percent, now that's the data I am given that there is a certain quantum of increase in that. That data by itself tells me nothing because you can have an increase in the formal sector employment which is part of a process of general expansion of employment in the economy. You can have an increase in employment in the formal sector which is of a greater order, a rate of increase than in the rest of the economy or the other way around but you can also have an increase in formal sector employment which is part of a process of destruction of other employment in the economy. So suppose Amazon people start buying more from Amazon, Flipkart and such entities. It could lead to a certain increase in formal employment in a certain part but if that process is also leading to closure of lots of these small unorganized retail outlets, you could have a much larger destruction of employment in those sectors. So the data showing some increase even if I take it that there is no problem of double counting and all there, some increase in that kind of employment doesn't tell you by itself anything about what's happening to employment in the whole economy and certainly doesn't tell you anything when we are in a long-term context as well as an immediate context in which the larger part of the economy in which people are employed, the informal so-called informal and unorganized sector has been badly hit. So if one looks for example at industrial employment even in the previous decade the evidence was that practically no growth of employment was taking place in the unorganized sector which traditionally accounted for the bulk of the employment and all the employment growth was concentrated in the organized sector and that itself was slowing down, growth was slowing down. We know that demonetization and things like that had a much more adverse effect on employment in the unorganized sector. So really perhaps what this attempt to try and project a rosy employment story with this data is suggesting is an in a sense an indirect acknowledgement of how bad the employment situation is. So you have to try and sell a story because that's not the experience on the ground. But even for the prominent fund data is there also an argument that what is being shown is really not the real increase because yes there is an increase on certain counts but certain shall we say people going out of the prominent fund net is not being accounted for. So there is that also shall we say an attempt to address the books? Well until we know the details of what is the data being presented we may not be clear but it is supposed to be the net increase, there is increase, there is new entry, there is exit and it is the net figure that they are supposedly giving. But in a country like India where people are moving from one employment to another, from one location to another, how do you ensure that there is no repetition and that some same people are not being counted twice as to having two different accounts? The claim is that it is all being linked with Aadhaar and therefore there should not be any problem of such counting. But I said that even if that data I take it to be entirely correct it doesn't still tell me what is really happening to the employment situation in the country. What is also however revealing in that data which in a sense is telling you what is happening is if you look at the growth of this employment as per this EPFO data, look at the states, it is very heavily concentrated in a few states. So Maharashtra, Tamil Nadu, Gujarat, some extent Karnataka they account for half the total increase. And there less than 25% of the country's population is accounted for by these states. What is even more interesting is if you look at the industry classification of this EPFO data then you find that half the increase is in one industry which is establishments which provide expert services. I take it to be a euphemism for outsourced services. So essentially whatever this increase is being shown it is essentially that employers are not directly hiring people. They are hiring people using people or outsourcing services and it is the establishments which are providing the outsourced services which are registering their employees for this EPFO. Well half of it is just that one sector. So it is in a sense reflecting the nature of employment growth also that most of it is outsourced and as outsourced so the ultimate employers of people are protected from giving all the benefits to the employees. And their very little scope for these employees also to have a bargain with the ultimate employers. So it's really reflecting in a sense if you look at the data reflecting the process of increased what is called increased informalization of email formal sector work. So the data is not telling you because it is only about the formal sector is not telling you everything about the employment story in the country but it is telling you that a large that a great degree of informalization idea of informalization of formal sector work is also happening. In a different way coming back to the other issues we have also the issue of investments. Is the investments in the Indian economy growing and is also the GDP growth which is now suddenly taken an upward trend according to the government. Again how realistic are these figures? This much can definitely be said that the credibility of the data is in serious question. If you look for example at the investment data you have till January of 2018 a figure showing that there is only 2.5% growth of investment in the previous year and then revised estimate comes in February which raises it to 10%. 2.5% to 10% growth in one month I mean the revision of the revision. Now even if I assume that there is no fiddling with the data this kind of variation would itself bring that data into question. How do I know when the next revision happens this 10% will not become back 2.5%. Is there any explanation why from what were the changes that are they underwent in order for it to be 10%? We don't have any clear explanation as to why this changes happened but essentially and if you look at the next year's figure that also went up but it is less than 10% now 7.5% is what it's supposed to be. However there is no corroborating evidence to indicate that this has happened as far as investment is concerned. Investment is after all an expenditure. It's an expenditure on either construction or an expenditure on machinery and equipment. These are the two things that you spend on. Production is not growing, your data, same data shows that. You have data on production of capital goods as well as on imports of capital goods. Neither of them are showing. In the case of the production of capital goods it is striking that from 2011, 12 till 2017, 18 it is a complete story of stagnation that volume of production of capital goods has remained almost the same. Every year you are producing the same amount, there is no growth. Similarly in the case of imports, now if you compare this growth with previous period when you know investment went up, you find that that 10 capital goods production as well as imports grew rapidly. This time you have complete stagnation. So if this is the evidence, where do you get this story of a growth in investment? Where is it going? This is the investment story. What about the GDP story? So GDP is also part of that same process, part of that same process. There are a lot of people who believe that the GDP growth is being overestimated and one of the sectors where you see this difference is going to go to the manufacturing sector. So the index of industrial production, the index of industrial production revised series, which was introduced after the new GDP series and with the same 2011, 12 base year. That particular index of industrial production also does not show the growth that the GDP series is showing. So clearly there is a problem in the revised method by which it is being, the GDP growth is being estimated. Industrial production is one part, there is also agriculture, there is also services. So are these two sectors also showing no such growth? Well with services we don't have any other indicator of that kind. We have for agricultural production and we do know that both agricultural production as well as industrial production. So in the case of agriculture for example, it looks in the last four years and compares with the previous four years. Then for food grains there is some growth mainly because of pulses. But for non-food grain crops it's actually lower. The four year production, last four years agricultural production is lower than what it was in the previous four years. And every evidence is there of increased distress in the agrarian sector. So agriculture is not doing well, industry is not doing well, construction is not doing well. Even by the GDP data construction is not doing well, investment is not growing. So what is the basis on which this GDP growth is happening? Even if it is not a pure statistical illusion, it is that certain kinds of services which cater to a very small segment of the population and which do not necessarily generate significant employment, they are growing. But large parts of the economy are not growing, not expanding. The segments of the economy on which most people have to depend for their employment, they are not growing, they are in difficulty. For most people it's still agriculture, the most important sector of employment. If they quit agriculture, where did they go in the last 20 years? Because construction, that has also stopped. So all the other evidence would indicate that the employment situation is actually extremely grim. And I think the government perhaps realizes that. And therefore the need to manufacture data, manufacture data or to present data in all statistics and data can be used to say very different things, exactly the opposite things. To say tweak the data, tweak it, change a parameter here, change a parameter there, multiply it here and multiply it there and it sort of changes the series. So that's also the way you could try and do it. So there is no firm evidence of this and we have to say that. And the nature of the data is such and the nature of changes that keep happening is such that really if you tell me that my story of the economy doing badly is not corroborated by the evidence, by the data, I can equally well turn around and say your story of a rosy picture is not corroborated by that same data because the data itself is not credible. Today it's saying one story tomorrow it is another story. And the internal contradictions of the data, investments are not happening, manufacturing is not growing and yet you have the GDP growing, agriculture of course is a different story. In fact I would say that if you really study the data that is available because what gets projected is parts of what is there in the data and the question of whether how authentic is the data as a picture of what's happening in the economy. And if you look at the data as a whole there are several pieces of data that are available. There are many indicators some of which I mentioned which show a picture of the economy doing badly. So there is substantial evidence in terms of data that the economy is doing badly. So you try to improve the investment climate, investment has not picked up but the same story is there with exports. You said make in India, you do this, do that, you claim that so much investment has come, no export growth is happening. And of course we have the flight of capital taking place because of the interest rates have risen in the United States, the Fed has raised its rate so there is also an outflow. She last question to you, do you think Mr. Jayatli and Mr. Piyush Goyal deserve the best fiction prize of the year award? They certainly seem capable of. With the data they have given us, this is a fair claim that they could make, right? Absolutely. Thank you very much for being with us, do watch news click, watch our other episodes, visit our website and see our YouTube channel.