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Tuesday, Sep 17, 2019

Opinion | In NSSO jobs data row, an apples to oranges comparison

The NSSO assessment published by a financial daily showed that unemployment rate across the country stood at 6.1 per cent, the highest since 1972-73.

opinion Updated: Jan 31, 2019 20:41 IST
Amit Malviya and Kishore Desai
Amit Malviya and Kishore Desai
The data is significant because this was the first comprehensive assessment of the employment situation conducted after Modi’s decision in November 2016 to withdraw most of the country’s banknotes from circulation overnight
The data is significant because this was the first comprehensive assessment of the employment situation conducted after Modi’s decision in November 2016 to withdraw most of the country’s banknotes from circulation overnight(HT File Photo)

A recent story about findings of an unpublished NSSO report on the state of unemployment in India seems to have captured considerable media attention. Debates on unverified and unreliable reports have been a hallmark of run-up to elections in the recent past and this season seems no different. But, in national interest and given the sensitivity of employment related data in India, the leak on the state of unemployment in India deserves deeper examination.

Firstly, the media report alleges that as per the NSSO report, unemployment rate shot up to 6.1% during the year 2017-18, highest level in the last four decades. As per the story, this data pertains to the NSSO Periodic Labor Force Survey (PLFS) that covered the period July 2017 – June 2018. When PLFS was launched, the Ministry of Statistics and Program Implementation (MOSPI) stated that “the main objective of the PLFS is to measure quarterly changes of various indicators of the labour market in urban areas as well as to generate the annual estimates of different labour force indicators both in rural and urban areas”. Later, in a PIB release on 30th January 2019, MOSPI also clarified that “NSSO is processing the quarterly data for the period of July 2017 to December 2018 and the report will be released thereafter”. The simple inference being that the government is still assessing and analyzing the jobs data collected for July 2017 – December 2018. Before the exercise is complete, any view on a partial picture will be severely compromising the integrity and sanctity of this entire exercise.

Further, if one notices the time lags between NSSO’s data collection exercise and dates of publishing it, the speed with which recent conclusions have been drawn appears to be completely out of sync with the past. The NSSO 68th round on Employment and Unemployment Situation in India was conducted between July 2011 and June 2012. The final findings (after processing and analyzing the data) were released in January 2014- a gap of 18 months from the time data was collected. Similarly, for NSS 66th round, conducted between July 2009 and June 2010, the final report was published in November 2011- a gap of nearly 17 months. In this context, looking at a portion of the unverified NSSO report (for which the entire set of data was still being collected till the end of 2018) and making sweeping recommendations based on the same is clearly flawed and seriously questionable.

The second aspect of the story relates to the lack of clarity while comparing unemployment rates in the past. NSSO has historically measured unemployment rate in 3 different forms. As per NSSO, “The three approaches are usual status approach, current weekly status approach and the current daily status approach. Three reference periods used in NSS surveys are (i) one year, (ii) one week and (iii) each day of the reference week. In the usual status approach, the activity status of a person is determined on the basis of the reference period of one year. The activity status of a person in current weekly status approach is determined on the basis of the reference period of one week and that in current daily status approach is determined on the basis of the reference period of one day.” Generally, the Usual Status approach provides the most liberal figure while the Current Daily Status provides the most conservative figure. In 2011-12 the range of unemployment rate among these three approaches was between 2.2% and 5.6%. Now the media stories that discuss NSSO’s latest report don’t mention the exact definition of unemployment rate that they are using. If they are comparing the most conservative estimate of 2017-18 with the most liberal estimate of 2011-12 then that’s nothing short of comparing apples to oranges.

Thirdly, media reports state that the unemployment rates pertain to that of ‘youth’ defined as those between the age group of 15 to 29. It also states that the Labor Force Participation Rate (LPFR) for this population has been declining. It is clearly possible that increasingly more number of people in this age group are now opting for higher education and therefore are voluntarily contributing to unemployment levels. Thus, in the absence of the detailed NSSO report, it will be unfair to draw firm conclusions on the levels of unemployment.

Fourthly, the 2017 data published by International Labor Organization, a UN agency suggests that India’s unemployment rate stood at 3.5% in 2017 (3.3% for males and 4.2% for females), much lower than the global average of 5.4%. Interestingly, as per the same database, India’s unemployment rate in 2012 was 3.6%, and the story was similar in 2009-10.

Finally, there are several other pieces of data pertaining to EPFO, ESIC and NPS which have been formally released by the government in the past. The trends of those data do not completely corroborate with the recent media report. Clearly, there are several gaps and omissions which are crucial to be assessed before drawing large conclusions on the status of unemployment in the country. National data generally presents a nuanced picture and is important to shape policy. Ideally, the government must expedite the data processing exercise and publish the results as soon as it can, so that all confusion and misinformation associated with this important subject is eliminated. Till then, all of us should see headline making ‘leaks’ with more than just one pinch of salt.

Amit Malviya is the National Convenor of Information Technology, BJP and Kishore Desai is a public policy professional. All views expressed are personal.

First Published: Jan 31, 2019 20:04 IST