How many jobs has the economy created?
The Consumer Pyramid Surveys of the Centre for Monitoring Indian Economy reports a decline of 1.5 million jobs during the first quarter of this year
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Last week, NITI Aayog released a report by the task force on improving employment data, set up under the chairpersonship of Arvind Panagariya. Given the media discussions on the extent of job creation in the economy, the least that the report was expected to do was to clear the air and say something on the extent of job creation in the economy in the last three years. Instead, what it does is produce a report on the strengths and weaknesses of various data sources on employment in India. There are several of these which are already available in the public domain and a better version is the report prepared by late Prof. T.S. Papola for the International Labour Organization (ILO) in 2014. The ILO report is certainly more comprehensive and analytical than the NITI Aayog report. The NITI Aayog report in comparison appears like an executive summary of the ILO report with significant omissions even in terms of its analysis of the state of employment data.
One of the mandates of the committee was to find ways of obtaining quick estimates of jobs created in the economy. But a reading of the recommendations of the committee suggests that other than reiterating the need for better data, it has approved post-facto what the National Sample Survey Office (NSSO) has already been doing as part of the Periodic Labour Force Survey (PLFS). Most of the variables that the report claims to be available following its recommendations are nothing but a listing of variables already available in NSSO’s employment-unemployment survey reports. The idea of the PLFS is almost a decade old with the pilot for these undertaken between 2011 and 2013.
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In the process, the quinquennial employment-unemployment surveys which were done along with consumption expenditure surveys of the NSSO have been dumped. They have been conducted together since 1973 and were the most credible basis of tracking employment data, a fact acknowledged by the committee. While the rolling out of PLFS is an improvement, the committee has failed to give any details on how the PLFS is going to be superior to the dumped employment-unemployment surveys.
As of now, it appears that the only advantage is the frequency of data reporting on an annual basis for rural and urban along with separate quarterly estimates for urban. But the idea of annual surveys is already in place and the NSSO did conduct several annual surveys on employment and unemployment, the most recent being in 2015-16 for which the data and report are yet to be released. Another annual survey of households was conducted by the labour bureau which again has been discontinued by the present government.
Since the committee itself was formed after the PLFS had started, there is not much that it could have done except to reiterate its superiority in terms of frequency of data made available. But where the committee has missed the opportunity is to suggest ways of improving the quality of data in a rapidly changing country. The nature of work has changed and so has the relationship between employers and employees. These need to be redefined in the current context. The existing framework of classifying workers does not do justice to the kind of data that is required. A good example is the current debate in UK on the status of Uber workers. These have implications not just for statistical estimates but also for policies for inclusion and social security.
The other suggestions of the committee, such as the regular conduct of the time-use surveys and enterprise surveys, are again a reiteration of what has already been under discussion in the public domain for decades. The first time-use survey in India was conducted in 1998 and since then the issue of regular time-use surveys has been discussed. The idea of using the goods and services tax network (GSTN) for enterprise survey and so on are again at a nascent stage and the committee hasn’t been very imaginative in suggesting ways of improving the existing data bases.
But what can be said about the extent of job creation under the present government? Unfortunately, none of the suggestions will see the light of the day in the near future. Most of these are more like a wish list than a solution. The PLFS, which has just started, is unlikely to be able to provide any answer until the end of next year, on an optimistic note. But don’t be surprised if we don’t have any estimate of employment until the general elections of 2019. In a country where the Reserve Bank of India has had trouble counting the exact number of notes which have been demonetized, counting the number of workers is surely going to take longer.
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Fortunately, there are other credible sources which continue to give estimates on how many jobs have been created. The labour bureau survey has reported a decline of 1.6 million jobs between 1 March 2014 and 1 July 2015. The Consumer Pyramid Surveys of the Centre for Monitoring Indian Economy also reports a decline of 1.5 million jobs during the first quarter of this year. Incidentally both these surveys are household surveys and have a sample size which is significantly larger than that of NSSO surveys. The enterprise surveys of labour bureau have also confirmed a slowdown in job creation from an average of 600,000 per year to only 135,000 in the first year of this government—not to mention estimates of job losses from various industry bodies, including the information technology (IT) sector.
The overwhelming evidence clearly suggests that job creation remains a serious problem for this government. Even the macro data on inflation, manufacturing sector growth and credit growth to industry suggest a situation of severe demand problem in the economy, which has been aggravated by demonetization. The crisis in farm sector is one manifestation of it. The multitude of data point to the need for a serious debate on what happened to job creation in the economy. The committee’s mandate was essentially to suggest ways to improve the quality of employment data but also clear the confusion on the current state of employment creation in the economy. Given the lack of clarity on job losses in the economy in the last three years, the least that was expected from the committee was some clarity on the issue. While it has failed to do so, it has certainly ensured that there is unlikely to be any debate on what happened to job creation in the economy during the last five years.
Himanshu is an associate professor at Jawaharlal Nehru University and visiting fellow at Centre de Sciences Humaines, New Delhi.