As job debate rages, many questions still unanswered
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.Updated: Feb 01, 2019, 07:41 IST
The unemployment rate in India touched 6.1%, a 45 year high, in 2017-18 according to the first Periodic Labour Force Survey (PLFS) conducted by the National Sample Survey Office (NSSO). These statistics were first reported in Business Standard on Thursday. PLFS is a slightly improvised version of the earlier Employment Unemployment Surveys (EUS), also conducted by NSSO. The complete findings of the PLFS report are still not in the public, as the report has not been released officially.
Earlier this week, the only two non-government members of the National Statistical Commission (NSC) resigned, protesting on various counts including the government withholding the release of PLFS findings.
A press conference called by the NITI Aayog on Thursday, which was addressed by vice chairman Rajiv Kumar and CEO Amitabh Kant, has further muddied waters instead of articulating the government’s position on the leaked findings. “I want to state it very categorically that this data being cited is not finalised and approved by the government and is a draft report. Therefore using this data is not the right thing to do,” Kumar said, adding that the data will be released by March after being approved by the Centre.
Without commenting on the veracity of the leaked findings, both officials said that because PLFS is a quarterly survey, its findings cannot be compared with results from earlier EUS rounds. This raises the question whether statistics from PLFS will not be comparable with earlier employment statistics of NSSO.
PLFS is only an improvised version of the earlier EUS rounds and even EUS was conducted in sub-rounds to account for seasonality factors, said Himanshu, an associate professor of economics at Jawaharlal Nehru University. NITI Aayog should not have any role in the collection or publication of NSSO reports. They are supposed to be vetted by the NSC, which approved the PLFS report in December 2018, he added.
“The GDP growth data has come out today; you can’t be growing at 7.2% and say there are no jobs being created in the economy… the problem is there is a lack of good quality jobs and that is what we need to focus on,” said Kant. According to the NITI Aayog CEO, “there is a wages problem and there is a very big problem in the informal sector of the economy”.
He added the government is creating “enough new jobs”. “Our own internal analysis showed that we are creating around 7.8 million jobs. Conventional estimates suggested that there are 12 million entrants per year and the country needs roughly around 7 million jobs… the challenge, however is that we need to take into account people exiting low productivity jobs”.
Even as the NITI Aayog officials refused to comment on the 6.1% unemployment rate figure or whether NSC ratified the PLFS report in December, 2018, their official statement cites myriad statistics from private organisations and individual research, to argue that the Indian economy has created a lot of jobs under the present government. None of these have been used to measure job creation or the lack of it in the Indian economy earlier.
NITI Aayog’s refusal to comment on the unemployment rates reported in the Business Standard story means that questions about the absolute number of jobs created and unemployed persons in the Indian economy between 2011-12 (the latest EUS round) and 2017-18 (the first PLFS round) will remain unanswered until the PLFS report is officially released.
Unemployment rate is defined as the share of population which is looking for jobs – defined as labour force – but cannot find employment. The actual number of workers or unemployed persons depends on the size of the labour force in the economy. This means that the number of unemployed can increase or decrease for a given unemployment rate with an increase or decrease in the size of the labour force. For example, the Indian economy added 11.9 million workers every year between 1999-00 and 2004-05. The unemployment rate changed from 2.2% to 2.3% between the 1999-00 and 2004-05 EUS. The number of jobs created per year between 2004-05 and 2009-10 fell to just 0.22 million even though the unemployment rate came down to 2% in the 2009-10 EUS. If the unemployment rate has increased significantly, as has been reported, and the size of the workforce has reduced due to factors such as increasing educational enrolment and fall in the number of women who are looking for work in India, the number of jobs created between 2011-12 and 2017-18 could turn out to be even lower.
(With inputs from Anisha Dutta)