Job at hand: India far behind other nations in public sector employment

India is still far behind the US, China and others in public sector employment

The 1-million big-bang recruitment drive initiated by Prime Minister Narendra Modi will mean that the central government departments and ministries would add a third of their workforce in just one and a half years.

According to a reply to a question in the Rajya Sabha, the government had said 3.13 million people were employed in regular jobs in various government departments in 2019-20. Yet another 861,000 were employed in central public sector enterprises in regular jobs in 2020-21.

Further analysis indicates that the size of the government had shrunk. According to Seventh Pay Commission data, there were 3.30 million regular employees in the central government in 2014. The size of CPSE had also been reduced by over 20 per cent between 2017-18 and 2020-21. According to government data available with the Department of Public Enterprises (DPE), there were 1.09 million employees in CPSEs in 2017-18.

If the government were to achieve this feat, it would be adding at least 15 per cent of total jobs created in a year. Although the latest data on yearly job creation in the formal sector is not available, an Economic Survey analysis from 2020 found that between 2011 and 2018, a total of 4.38 million jobs were added yearly. Another study by Surjit Bhalla and Tirtha Das for the PM’s economic advisory council found that 4.6 million jobs were created during the same period.

China’s premier announced the addition of 13 million jobs in 2022. While the latest numbers for public workers in China are not available, in 2015, when the Chinese government had announced an increase in salaries for government employees, there were nearly 39 million public-sector employees in the country. As a proportion of the workforce, it would mean 5 per cent of China’s workforce had public sector employment. The corresponding figures for the UK in 2021 were 17 per cent, and for the EU, it was 18 per cent.

In the US, a Brookings study shows that 10.9 million were employed in the government in various capacities in 2020. As a proportion of the total workforce, it shall translate into 6.9 per cent of the workforce. The data does not include state government employment.

A 2019 analysis by CP Chandrashekhar and Jayati Ghosh indicated that while the US had 77 public employees per capita, China had 57, and India had 16 in 2015.

Using the same apparatus, if we were to assume that state employment is four times that of central government and armed forces employees, another 1.4 million people, India’s total public sector employment would be in the vicinity of 20 million. Double of that of the US, but half of that in China. In that case, an addition of 1 million would not move the needle. However, as a proportion of the total workforce of 900 million, India will still have only 2.2 per cent of people employed in the public sector.