India’s data deficiency and the need for quality unemployment figures

The unemployment rate in India for people aged 15 years and above in urban India reduced to 7.2 per cent during the second quarter ending on September 30 from 9.8 per cent.

Data from the National Statistical Office’s 16th Periodic Labour Force Survey (PLFS) showed that the unemployment rate among females (aged 15 years and above) in urban areas slowed to 9.4 per cent in July-September from 11.6 per cent a year ago, while it was 9.5 per cent in April-June.

This positive yet obvious sign of recovery in unemployment is attributed to just the opening up of the markets. However, questions about the quality of this information remain.

The data story in the growth and development of any nation is crucial, especially for countries like India, where growth potential is ample along with everlasting development issues of poverty, inequality and unemployment.

To answer the question - of how far have we reached after 75 years of independence in terms of development as a nation - requires estimates on the same issues.

However, the major issues faced by social scientists and researchers in answering such questions are three-fold, i.e.,

(i) discontinued existing sources of data on unemployment

(ii) questionable quality of the recently published records and

(iii) the need for publishing new estimates on innovative perspectives of employment. In this piece, we deal with these three issues.

The clueless nature of India’s unemployment data is worrisome. Since 2016, the Ministry of Labour and Employment has discontinued several of its surveys.

Data sources such as Annual Employment-Unemployment Surveys (EUS), published from 2010 to 2016, got discontinued.

In 2016, only the Quarterly Employment Survey (QES) of industries employing workers with more than 10 numbers came into force. The survey was inherently restrictive in its nature in presenting employment data and maintained an absolute silence about the unemployment figure.

In an interview in 2018, Prime Minister Narendra Modi said, “More than a lack of jobs, the issue is a lack of data on jobs.” However, the government doesn’t seem to be acting on this front.

Moreover, the questionable quality of the published data sources of employment adds to the problem of the data deficit.

The recently published EPFO payroll data has suffered from several criticisms that cannot be ignored.

These criticisms of the data – on not being actual payroll data; that it represents only the registered organised sector which is less than 10 per cent of the total employment, and that it ignored the self-employed – raise questions on the quality of the information as an indicator of employment and also in terms of usability in research.

Highlighting this issue on the credibility of the payroll data published by EPFO, India, a study by Ghosh and Ghosh in 2018 suggests taking the findings with a pinch of salt. It also bemoans the loss of data from the NSSO that discontinued publishing unemployment figures.

Instituted in the early 1950s by professor Prasanta Chandra Mahalanobis, who is widely regarded as the father of Indian statistics, the NSSO EUS data could encompass such quality deficits in the employment data in the country.

Similar is the case with PLFS figures. With joblessness found to have fallen for every group of rural/urban, male or female, this data also highlights that the non-farm sector has increased steadily from 68.2 per cent in 2017-18 to 71.4 per cent in 2020-21, having suffered from precarious working conditions, about which the data is silent.

On several fronts of compatibility of datasets and indicators, there are questions galore about the reliability of PLFS data. From the perspective of adequacy, the PLFS data has been suggested to have a greater sample space to come up with more meaningful estimates of unemployment; meaning that the scope for improvisation in PLFS data is huge if it has to be policy-relevant.

In addition to the unavailability of data, existing figures of employment are unworthy of international comparisons. Most emerging and developed countries possess a strong and quality unemployment database as they endow the unemployed with several social security benefits.

The major sources of unemployment data published across the globe, like the Bureau of Labour Statistics (BLS), which has adjusted unemployment rates for the US, conceptualised unemployment since the early 1960s.

Three other organisations that conceptualise annual unemployment data on a standardised basis are the Organisation for Economic Cooperation and Development (OECD), the International Labour Office (ILO), and the Statistical Office of the European Communities (Eurostat) for their specific regions. However, in
the case of India, we suffer significantly from international standardisation and, thus, comparability.

Such paucity of data is not restricted to employment and unemployment situation in India. India, which has a huge diversity and heterogeneity of living, has not realised the need for accounting for important socio-economic aspects of development through standardised and updated databases.

The Census 2021 that got delayed owing to the severity of the pandemic has vanished from public discussion forums, with the government delaying it further. This data crunch and unavailability of credible information do seem to have become institutionalised.

Moreover, the government has come up with new surveys like the Mother Tongue Survey of India involving 576 languages. While such surveys are welcomed, the priority should shift towards the timely release of quality unemployment figures that can fuel research, dialogue and, thus, policy-making in India.

(Krishna Raj is Professor of Economics at ISEC, Bengaluru; Kaibalyapati Mishra is a research student at ISEC, Bengaluru)