Anything more than a cursory glance at the provisional results of the Sixth Economic Census suggests that something isn’t right with Delhi. The capital has actually had a stable decade economically, with quite a few years of double-digit growth.
The Delhi government’s statistics show steady, if not exceptional, growth in employment over the course of the past decade. Yet the Economic Census shows something else entirely: a 59.57% drop in rural employment and a 11.25% fall in urban employment from the last census, which was conducted in 2005.
That’s a massive drop in employment for a union territory that most would argue has been economically successful. It’s even starker compared to the national average, which has seen employment in rural areas go up by 31.59% over the past nine years and urban job generation leap forward at 37.46% from the 2005 census.
Employment generation isn’t the only category in which Delhi has fared badly, according to the census. The statistics for the growth of establishments also sees rural areas in the capital posting lower figures, with 51.9% fewer establishments counted in this census than the last one, and an urban growth rate that lags far behind the national average.
As a result, Delhi’s share of overall employment in the country has come down from 3.52% in 2005 to just 2.34% now. Its share of overall establishments has similarly declined from 1.81% of all enterprises in the country nine years ago to 1.53%. And all this while the capital has ostensibly been growing at rates of more than 11%.
What gives?
The Economic Census attempts to answer the question in its provisional document, but this response is both unsatisfactory and potentially problematic.
“So far as urban areas of States/ UTs are concerned, Delhi (Urban) shows a decline in growth of employment by 11.25%. This is primarily due to the fact that average employment size per establishment in Fifth EC for Delhi was much higher (4.69) and somewhat unrealistic as compared to the corresponding average employment size of 3.34 in Sixth EC for the NCT of Delhi,” the census document says.
In other words, it is essentially admitting that the fifth census was wrong. It chooses not to use that word, saying instead that it was “somewhat unrealistic” in its assessment of the average employment in the capital, but whether it is a question of inflated figures or an inadvertent error, there is no question that the author of the census is encouraging readers to approach the results of the fifth economic census with scepticism.
The surprising rural establishment figures are more easily explained. Unlike the urban employment figures, where Delhi is the only state or union territory in which growth fell, growth in rural employment and establishments have dropped in other places. Chandigarh, for example, has seen a 68.67% drop in rural employment over the past nine years, with Kerala coming in at 13.25%.
The census suggests that this might be simple a matter of categorisation. “One major reason for this could be due to the fact that certain areas, which were treated as part of rural during the Fifth EC, might have formed part of urban areas in the Sixth EC,” the document says.
But the admission of “unrealistic” figures in the previous census is problematic, because the current document – which is provisional – gives no explanation for why those errors may have been made or why this census is more reliable.
Concerns over the reliability of employment data are not new. Last year, an article in the Economic and Political Weekly argued that the National Sample Survey Office had over-estimated its employment generation figures by nearly 30% all because it used the wrong census data to make its projections.
But to have the census acknowledge that its own previous numbers might have been wrong or “unrealistic” and then not address the reasons for this brings up a whole set of questions about whether we should trust the economic census at all.
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The Delhi government’s statistics show steady, if not exceptional, growth in employment over the course of the past decade. Yet the Economic Census shows something else entirely: a 59.57% drop in rural employment and a 11.25% fall in urban employment from the last census, which was conducted in 2005.
That’s a massive drop in employment for a union territory that most would argue has been economically successful. It’s even starker compared to the national average, which has seen employment in rural areas go up by 31.59% over the past nine years and urban job generation leap forward at 37.46% from the 2005 census.
Employment generation isn’t the only category in which Delhi has fared badly, according to the census. The statistics for the growth of establishments also sees rural areas in the capital posting lower figures, with 51.9% fewer establishments counted in this census than the last one, and an urban growth rate that lags far behind the national average.
As a result, Delhi’s share of overall employment in the country has come down from 3.52% in 2005 to just 2.34% now. Its share of overall establishments has similarly declined from 1.81% of all enterprises in the country nine years ago to 1.53%. And all this while the capital has ostensibly been growing at rates of more than 11%.
What gives?
The Economic Census attempts to answer the question in its provisional document, but this response is both unsatisfactory and potentially problematic.
“So far as urban areas of States/ UTs are concerned, Delhi (Urban) shows a decline in growth of employment by 11.25%. This is primarily due to the fact that average employment size per establishment in Fifth EC for Delhi was much higher (4.69) and somewhat unrealistic as compared to the corresponding average employment size of 3.34 in Sixth EC for the NCT of Delhi,” the census document says.
In other words, it is essentially admitting that the fifth census was wrong. It chooses not to use that word, saying instead that it was “somewhat unrealistic” in its assessment of the average employment in the capital, but whether it is a question of inflated figures or an inadvertent error, there is no question that the author of the census is encouraging readers to approach the results of the fifth economic census with scepticism.
The surprising rural establishment figures are more easily explained. Unlike the urban employment figures, where Delhi is the only state or union territory in which growth fell, growth in rural employment and establishments have dropped in other places. Chandigarh, for example, has seen a 68.67% drop in rural employment over the past nine years, with Kerala coming in at 13.25%.
The census suggests that this might be simple a matter of categorisation. “One major reason for this could be due to the fact that certain areas, which were treated as part of rural during the Fifth EC, might have formed part of urban areas in the Sixth EC,” the document says.
But the admission of “unrealistic” figures in the previous census is problematic, because the current document – which is provisional – gives no explanation for why those errors may have been made or why this census is more reliable.
Concerns over the reliability of employment data are not new. Last year, an article in the Economic and Political Weekly argued that the National Sample Survey Office had over-estimated its employment generation figures by nearly 30% all because it used the wrong census data to make its projections.
But to have the census acknowledge that its own previous numbers might have been wrong or “unrealistic” and then not address the reasons for this brings up a whole set of questions about whether we should trust the economic census at all.