Active Stocks
Fri Apr 12 2024 15:57:45
  1. Tata Steel share price
  2. 163.50 -1.00%
  1. NTPC share price
  2. 362.00 -0.32%
  1. ITC share price
  2. 430.10 -1.56%
  1. HDFC Bank share price
  2. 1,518.90 -1.10%
  1. State Bank Of India share price
  2. 766.75 -1.57%
Business News/ Opinion / Columns/  Opinion | The ‘observer’s paradox’ and India’s jobs data confusion

Opinion | The ‘observer’s paradox’ and India’s jobs data confusion

The truth of joblessness is hard to discern if the act of tracking it influences the numbers we get

Photo: MintPremium
Photo: Mint

It’s election season and claims and counter-claims are flying thick and fast. It is that time when the very concept of objective reality is challenged. But does such a thing as objective reality exist at all?

“Objective reality" is the collection of things that we are sure exist independently of us. For instance, if a couple of friends and I standing by a road can all see a house right across the road from us, the house exists. But then, there’s Rashomon. And philosophers muddy the waters by asking questions like: “If a tree falls in a forest and no one is around to hear it, does it make a sound?"

Then there is the Schrödinger’s cat thought experiment. Austrian quantum physicist Erwin Schrödinger imagined that a cat, a vial filled with poisonous gas, a Geiger counter, some radioactive material and a hammer are inside a sealed container. The amount of radioactive material is so little that it only has a 50/50 chance of being detected. If the Geiger counter detects radiation, the hammer will smash the vial, releasing the gas which will kill the cat. Until someone opens the container after an hour and looks in, it is impossible to predict the cat’s fate. During that hour, according to quantum law, the cat is both alive and dead.

In quantum mechanics lingo, this is called the “observer’s paradox". The logic behind this paradox is the ability of observation to influence outcomes.

To come to things more real and immediate, consider the employment data debate. The National Sample Survey Office’s Periodic Labour Force Survey (PLFS) report has not been released by the government, which has led to very valid criticism that the government, in an election year, does not want anything made public that shows its performance in poor light.

The report has since been leaked to the press, and we now know that according to the PLFS data, the un-employment figure in 2017-18 was the highest in 45 years.

The NITI Aayog countered that India’s gross domestic product (GDP) could hardly be growing at 7.2% without any jobs being created. “Our own internal analysis showed that we are creating around 7.8 million jobs," said NITI Aayog chief executive officer Amitabh Kant. “Conventional estimates suggested that there are 12 million entrants per year and the country needs roughly around seven million jobs."

Then we have non-government economists. Using Employee Provident Fund Organisation (EPFO) data, Soumya Kanti Ghosh and Pulak Ghosh calculated that India added seven million jobs in the formal sector alone in 2017-18 However, the Centre for Monitoring Indian Economy reported that the job market either stagnated in 2017-18 or the number of persons employed could have fallen by 0.5 million from 406.7 million the previous fiscal year to 406.2 million.

Economist Surjit S. Bhalla used data from the Annual Survey of Industries (ASI) to give his reading on the jobs scenario. He wrote. According to the ASI data, employment has grown at more than twice the rate in the three NDA-2 years than in the preceding three UPA years. The ASI employment data are also consistent with other sources of formal job data such as the EPFO database. It should also be noted that, around the world, establishment surveys are being preferred to household surveys on jobs."

Bhalla also says that there are many problems with the PLFS data; for instance: “Leaked PLFS reports suggest that India had an urbanisation rate of only 29.3 per cent in 2017-18, even lower than that observed in 2011-12!" This definitely seems incorrect (2011-12 was the last time an employment-unemployment survey was done by the government). In an earlier article in January, he had even rejected the often-bandied-about notion of India needing to create 12 million jobs a year. His research, analysing population, education and labour force numbers since 1983, and taking into account the steady drop in women’s participation in the labour force, concluded that India may need to create less than five million jobs a year. “A large part of the so-called jobs crisis is because of demand for government jobs, not jobs per se," he wrote.

However, his research methodology has been criticized by some economists.

So who does one believe? Maybe we need to go back to Schrödinger’s cat, because in a way are we not talking about an “observer’s paradox" here—observers influencing outcomes? The observers in this case are economists and the outcomes depend on methodologies based on their chosen assumptions. In 1957, American physicist Hugh Everett formulated the many-worlds interpretation of quantum mechanics. Here, both the alive and dead states of the cat persist after the box is opened. The observer and the possibly-dead cat split into an observer looking at a dead cat and an observer looking at a live cat. Two worlds come into being: one with observer+dead cat, and another with observer+live cat. They cannot interact with each other; in physics terms, they are “decoherent" from each other.

As we and our politicians head towards the most divisive elections in independent India’s history, “decoherence" may be a good concept to ponder.

Sandipan Deb is a former editor of ‘Financial Express’, and founder-editor of ‘Open’ and ‘Swarajya’ magazines.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 01 Apr 2019, 01:00 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App