In May, the Prime Minister’s office constituted a task force to estimate employment growth based on regular household surveys. After the 2008 global economic recession set in, the government had initiated more frequent employment data gathering, and the Labour Bureau (LB) had been appropriately entrusted with the job of producing quarterly data. The National Sample Survey Organisation (NSSO) also conducts surveys to collect household based data, but their reports are long in coming, usually five yearly. These have been the most popular basis of analysis and discussions about employment and unemployment in India so far. The Niti Ayog seems to think that the efforts of the Labour Bureau need to be supplemented, and instead of strengthening the efforts of the Bureau, a parallel task force has been announced. The difference between the two surveys will be in the sample frame. While the LB is an industry-based non-random survey, the task force will conduct random household surveys and publish it quarterly.
India has an estimated labour force of 47 crores, of which the LB looks at about three crores using a 2012-13 industry census as the sample frame. Since industrial patterns shift with growth, the vice-chairman of the Niti Ayog thinks that a four-year-old frame, of which eight sectors are chosen, may not be perfectly appropriate now. The task force he feels will overcome this deficit by a household survey every quarter, to estimate actual employment and unemployment. Urban employment will be estimated separately.
The frame, cost, scale and speed of such a survey, to be supervised by the task force will have to be unprecedented. Household surveys are usually very time consuming, given the geographic spread and difficulty in accessing respondents during working days. Non-response of households will impact the randomness of the survey. The stigma of failure associated with male unemployment in urban areas will also impact the responses of respondents, while women in low paying and home-based employment, seldom respond to questions of employment. The men in the family respond on their behalf, downplaying their employment. Training and supervision of numerous investigators is an important component of such surveys. All these hurdles are the reason why industry surveys and employment exchanges are supposed to be the nodes of information. Given the poor status of our employment exchanges in matching demand and supply in the labour markets they cannot be used as the only node of information and estimation.
However, all these hurdles notwithstanding, recognition of the fact that employment generation is the purpose of GDP growth and it is politically and socially the most important aspect of growth is a welcome pressure point in public debate. The immediate cause of this development was the latest quarterly report of the LB that estimated a loss of 1.52 casual jobs in sectors such as IT (Information Technology) and manufacturing, during the October-December 2016 demonetisation period.
Besides, about half the labour force is self-employed in small enterprises. It is counter intuitive, almost irrational to assume that they would not have lost sales, income and savings in a cycle due to the shortage of currency in the market. Many of these tiny self-employed enterprises would have business and personal bank loans to repay as part of the two-decade-old financial inclusion project. This would have led to an accumulation of debt, possibly making some enterprises unsustainable.
The new task force should be able to capture this phenomenon if it attempts a past year recall section in its questionnaire. Long term trends in the labour market have not been favourable. Jobs and livelihoods have become fragile. NSSO surveys have generated sufficient data to suggest that job creation resulting from growth is not robust. Casual and self-employment are the long term trends. All the data generated from these new surveys could provide valuable and quick inputs for future labour market policy.