The National Statistical Commission (NSC) is actively considering a proposal to estimate employment numbers every quarter to bridge a critical gap in “real sector” data coverage in the Indian economy.
Employment data are currently estimated once in five years through a sample survey by the National Sample Survey Organisation (NSSO). Experts say the lack of more frequent estimates on labour force cripples their ability to effectively forecast the growth rate of the economy. India’s labour force was estimated at 397 million in 2005.
“NSC is looking into different concepts of employment estimates. Some methods are decades old,” said a senior official with the ministry of statistics, who declined to be named.
Having a quarterly estimate of the labour force is also part of International Monetary Fund’s initiative called the Special Data Dissemination Standard (SDDS), of which India is also a part.
SDDS covers four categories — real, fiscal, financial and external sectors. Within the real sector, the four sub-categories are: national accounts that are estimated through Gross Domestic Product (GDP); production indices; labour market and price indices. The periodicity for these four sub-groups is either monthly or quarterly.
In India, estimates for three of the four groups (GDP), Index of Industrial Production (IIP) and Wholesale Price Index (WPI) are made on quarterly, monthly and weekly bases, respectively. It’s only in the labour market that Asia’s third-largest economy has no estimate on a shorter periodicity.
“This (employment data) is very much a requirement,” said D K Joshi, economist with Crisil Ltd, a ratings and advisory firm. “Employment numbers are a critical variable used as an advanced leading indictor. We completely miss out on that,” he added.
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At this point, however, it is not clear how data on India’s labour force will be collected on a quarterly basis, especially when the statistics ministry faces a severe shortage of trained people. Pronab Sen, India’s chief statistician and secretary with the ministry of statistics, could not be reached for comment.
Many countries estimate labour force statistics through household surveys, in which homes are tracked for a certain period of time on a continuous basis. Thereafter, a fresh list of households is drawn up.
SDDS, the IMF’s initiative, does not specify a definition for labour market estimation. However, it wants member-nations to use International Labour Office’s (ILO) concepts and classifications.
Recently, the ministry of commerce tied up with the Centre for Monitoring Indian Economy (CMIE) for the latter to collect data from industries to compile the Index of Industrial Production (IIP). Though 14 agencies provide data for the IIP, the commerce ministry contributes more than 70 per cent of the input.
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