On Thursday, a political storm boiled over after Business Standard reported that, between 2017-’18, unemployment numbers in India reached a 45-year high. The newspaper based its report on a survey, conducted by the National Sample Survey Organisation, called the Periodic Labour Force Survey that the government had not made public.
According to the report, the country’s unemployment rate climbed from 2.2% in 2011-’12 to 6.1% in 2018-’18. Once disaggregated, these numbers look even worse. Joblessness is higher in urban areas than rural areas – 7.8% versus 5.3%. For instance, unemployment among rural men in the age group of 15-29 years rose from 5% in 2011-’12 to 17.4%.
The report corroborated what the government’s critics have been saying – that demonetisation and the ham-handed rollout of the Goods and Services Tax have resulted in large job losses. In a press conference called on Thursday evening, the government hit back. It claimed other datasets – like that of Employees’ Provident Fund Organisation – show employment in the economy is rising. At the event, Amitabh Kant, the chief executive officer of Niti Aayog, also suggested results of the Periodic Labour Force Survey, based on a new methodology which conducts quarterly surveys, is not comparable with older NSSO surveys.
Do these various reasons offered as defence hold up to scrutiny? Scroll.in asked Himanshu, an associate professor at Jawaharlal Nehru University.
Excerpts from an interview.
The government and its supporters claim EPFO data challenges the Business Standard report. Is that a fair comparison?
No. [Employees’ Provident Fund Organisation] data tells us about formalisation of the economy. It doesn’t measure job creation. As such, it tells us how 15% of the economy, which is formal, is doing. But it doesn’t say anything about the informal sector, which is about 85% of the economy. In that sense, it is not a full measure of employment. And the informal economy is where jobs are being lost. Only the [ National Sample Survey Organisation] can tell us how the informal economy is doing.
Some background, please. These reports were delayed. What happened there?
Two surveys, on consumption-expenditure and employment-unemployment, are carried out usually at the same time after every five years but occasionally in-between. The NDA [National Democratic Alliance] government has been apprehensive about both of these – one used for poverty measurement and the other for employment. Maybe they felt the numbers would not be positive. And so, from 2015 onwards, they had begun making noises criticising NSSO surveys.
The survey should have been conducted in normal course in 2016-’17. But it did not. It was eventually carried out in 2017-’18. Its report should have come out last September but it did not. Now, as we see from the data, they were right to be apprehensive.
The new report is called Periodic Labour Force Survey. Some people say its numbers are not comparable to earlier NSSO surveys?
This is NSSO data. The difference between the two is how they report the data. The Periodic Labour Force Survey reports rural data on an annual basis and urban employment data on a quarterly and annual basis. While there is some difference in sampling in urban areas, the broad methodology is same and the two datasets are broadly comparable.
What do these numbers tell you?
First of all, there is nothing wrong with the data. It fits with what we have been saying about job losses after demonetisation. If anything, we have underestimated the extent of India’s jobs crisis. It is far more serious than we had imagined.
This is not just about low job creation but also about the worsening quality of jobs. An ad for 13 waiters gets thousands of applicants. All of these are not people applying for a job for the first time. Many are people dissatisfied with their current jobs. Both show as a huge demand for jobs as well as a huge premium for government jobs.
Both quantity and quality have to be seen together. There are no easy answers here. And there are no short-term answers certainly.
The Business Standard report also says that more people are withdrawing from the workforce – labour force participation is coming down. What does that indicate?
It could be [for example, people] voluntarily moving to educational institutions [for higher studies instead of joining the job market] but the extent of decline is so large that it does not explain the large decline in labour force. The other explanation is “discouraged worker” hypothesis, which is that workers withdraw from labour force if they do not see any hope of getting jobs.
This is 2017-’18 data. How do you think the informal economy has fared since the data got collected? Have things begun improving?
No. All available indicators suggest the situation of informal sector has only worsened, We are in the middle of a deep rural crisis. And a large part of the informal sector depends on rural demand.
Read more from Scroll.in’s series Job Tracker: