Photo: Mint
Photo: Mint

Solving the mystery of missing employment data in the Indian economy

The prime minister is partly right in the sense that the most authoritative data on employment-unemployment from the periodic NSSO were not available after 2011-12

In an interview given to Swarajya magazine earlier this month, Prime Minister Narendra Modi lamented the lack of data on jobs in the country. This was in response to a question on why the economy is not creating jobs. The prime minister is partly right in the sense that the most authoritative data on employment-unemployment from the periodic National Sample Survey Office (NSSO) were not available after 2011-12. But this does not mean that there is no data on jobs in the economy.

There are numerous sources, which provide estimates of employment for the whole economy, as well as some for only particular sectors or particular types of employment. Much of the debate on jobs has been based on these data sets ranging from the quarterly surveys of the labour bureau to the privately conducted surveys by the Centre for Monitoring Indian Economy (CMIE).

Apart from these, there are also several good proxies, which can be used to arrive at some idea of the employment scenario in the country, national accounts and wage data being two important sources. The other source that has been used extensively as a proxy for employment generation is the data on social security enrolment from Employees’ Provident Fund Organisation (EPFO).

The absence of authoritative and credible data has led to a situation of claims and counter-claims on employment creation under this government, depending on the choice of data. So far, the most authoritative data, similar in most respects to the NSSO surveys, are the labour bureau annual surveys. The last two surveys report that employment in the economy reduced by 16 million between March 2014 and July 2015. All other sources of data are sectoral and, at best, cover less than 10% to a maximum of 25% of the workforce. Attempts at using these to arrive at national estimates are unrealistic and unreliable. But even with these, the rate of employment creation is not only lower than the rate of employment creation during the United Progressive Alliance (UPA), but also nowhere close to the promised 20 million jobs per year. Even the CMIE data, which is the only private sector data source on employment, suggests a decline in rate of employment creation since demonetization and certainly much lower than what is required.

Among the indirect data sources, perhaps the most conclusive evidence is from the wage data, which shows a decline in real wages since May 2014 when the government took over. Clearly, the evidence on jobs may be less than robust compared to NSSO surveys, but it does show that there is no evidence of job creation having accelerated under this government. And certainly, nowhere close to what is required for the economy and what was promised by the prime minister during his election campaign in 2014.

It is, therefore, disingenuous for the prime minister to lament the lack of jobs data. Since this was one of the promises that fetched him the brute majority, there was enough time for the government to have a survey on employment and unemployment, if it was serious to show its efforts on employment creation. But not only did the government discontinue the annual series of employment and unemployment by the NSSO, it also delayed the scheduled employment-unemployment surveys to the last year of the government.

NSSO conducted six surveys on employment-unemployment between 2004 to 2011-12. These were in 2004, 2004-05, 2005-06, 2007-08, 2009-10 and 2011-12. After 2014, the government asked NSSO to include surveys on sanitation, Jan Dhan Yojana and other government schemes, but no attempt was made to restart the employment surveys until it was pressured to start the periodic labour force survey and the employment surveys of NSSO. But even for this survey, it is unlikely that the results will be out before the general elections of 2019.

Even though the NSSO surveys were discontinued after 2011-12, the annual surveys of labour bureau provided information on the employment trend after 2011-12. But even the annual surveys of labour bureau, which are comparable national surveys on employment-unemployment started in 2009-10, were discontinued after 2015-16 when these showed employment decline by 16 million in the first year of this government. No justification was provided by the government on why these were discontinued.

Clearly, the absence of jobs data is not just a coincidence. The government of the day made all efforts to ensure that there was no credible data on jobs by discontinuing the existing data sources. While the absence of credible data has hampered a meaningful analysis of the state of the economy, as far as jobs creation is concerned, it has not deterred the prime minister and other senior ministers from claiming robust job creation based on dubious and limited data.

It has also helped them to deflect the attention from serious issues of employment quality and quantity to frivolous claims of pakoda-making and paan shops as alternative employment opportunities. While the government may win the debate on job creation using fictitious data and may also benefit politically, the biggest casualty will be the truth of what happened to jobs in the economy. The only beneficiary of the missing jobs data has been the government.

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