Missing the jobs for the data

The government has scrapped existing job surveys but has moved slowly on creating replacements

The National Democratic Alliance (NDA) has been combatting criticism of poor job creation with a counter-narrative that the country lacks proper employment statistics. 

But the conundrum is this: The existing exercises to collate official jobs statistics have been discontinued and replacement surveys are still to begin. The result: Whether Narendra Modi has fulfilled a 2014 campaign promise to create millions of jobs cannot be verified. 

The critics contend that, with official and private surveys indicating a sharp rise in unemployment, alternative methodologies are meant to counter an embarrassing narrative on jobs and open to interpretation.

In January last year, an exercise by two researchers under the government’s aegis interpreting monthly payroll data released by the Employees’ Provident Fund Organisation (EPFO) in 2017-18 showed a job creation of 7 million — much higher than any other estimates available. That finding created controversies on the veracity of the interpretation. 

That study, however, inadvertently put job creation and data front and centre of the debate, causing the government to discontinue or halt temporarily various official surveys on grounds that they contained flaws. In April last year,  the government had stopped making public the result of quarterly enterprises survey (QES) of the Labour Bureau.

A panel, led by former chief statistician TCA Anant and set up on the recommendations of the Prime Minister’s Office (PMO), recently recommended doing away with the Labour Bureau’s QES and replacing it with either a first-of-its-kind Employment Index or an improved version of the EPFO data. 

Before that, towards the  end of 2017, the household surveys of the Labour Bureau were discontinued and the National Sample Survey Organisation’s quinquennial (once every five years) surveys have also stopped. But it is planned to be replaced by a more comprehensive Periodic Labour Force Survey (PLFS) by the NSSO for period 2017-18. It will be an annual household survey country-wide and a quarterly survey in urban areas. 

Explaining the core issue, Standing Committee on Labour Force Statistics Chairman S P Mukherjee, former University of Calcutta professor of mathematics, said there is no mechanism to get a comprehensive picture of employment in the country. 

So what is the solution? 

The answer is to capture two kinds of data, with one verifying the other. “Both household and establishment surveys need to be conducted simultaneously,” said Mukherjee. “Household surveys establish the employment-unemployment rate and the establishment surveys give a better idea of various sectors of the economy and employment policies are sector-based.” 

This led the government to initiate an overhaul of the employment statistical framework, for which the PMO, no less, took the initiative.

Arvind Panagariya, who was then the Niti Aayog vice-chairman, was asked to suggest solutions. He submitted a report in August 2016. The draft report was made public but the final version was never disclosed. 

The final Panagariya panel report, reviewed by Business Standard, has recommended that a monthly household survey is the ideal way of mapping job creation. The task force had recommended a shift to a monthly household survey, similar to the Current Population Survey of the United States, in the long run, and suggested experimentation with data collection via mobile technology. But it agreed, a monthly household survey in a country as large as India may take some time. 

 “Household surveys are the best way of capturing the employment situation. Enterprises-based surveys are mainly threshold-based. For instance, it will only cover firms with at least 10 workers whereas a majority of the establishments employ less than 10 workers. For establishment surveys, the Economic Census, which is planned to be released this year, may become a base for further employment studies,” Chief Statistician of India Pravin Srivastava told Business Standard. 

Srivastava said the Economic Census will be a much improved version, as it will be GPS-mapped allowing real-time capturing of data on factories which are functional and those that have become defunct. But relying on the Economic Census 2019 would mean that a quarterly enterprises-based survey on jobs may come only by the end of next year. The Anant panel has suggested an alternative in the form of an Employment Index created out of the Labour Bureau’s quarterly surveys after significant improvements. 

 On the EPFO’s payroll data, the Anant panel said the database needs significant changes by bringing the data in tune with the National Industrial Classification (NIC) standards. Besides, EPFO, which covers enterprises with more than 20 workers, is proven to be unstable as the figures get revised every month retrospectively because of delayed filings by employers.

Mukherjee said an area frame survey of the Labour Bureau, of units that employ less than 10 workers, would offer a perspective on the larger informal sector employment. The survey may be commissioned by the end of this year. 

But, as a government official pointed out, the most important step in reforming the country’s statistical framework is to frame a schedule for release of surveys — a key missing element when it comes to jobs statistics. 

For instance, the Labour Bureau’s sixth employment-unemployment survey of 2016-17 — the last in the series — has been withheld, despite Labour and Employment Minister Santosh Kumar Gangwar’s approval last month. An extract of the survey, reviewed by Business Standard, showed the unemployment rate at a four-year high of 3.9 per cent. 

The NSSO’s PLFS was supposed to be released late last year but hasn’t been made public. Sources said it is unlikely that the findings of the household survey, which was supposed to be the most comprehensive one in recent times, will be released before the general elections.

“The government is going to town complaining about the lack of data. The data is there but the government is not releasing it. It has to be honest about the data and the compulsions which have led to withholding it,” former chief statistician Pronab Sen said.