An opaque economy

Lack of reliable data on jobs hurts accountability, sentiment

The National Sample Survey Office (NSSO) will be conducting an annual survey of households on employment in 2018-19, according to a report in this newspaper this week. The issue that is yet to be decided is whether the survey should stick to the April-March cycle or shift to the June-July cycle. A shift, obviously, will undermine comparability. But the bigger question is why has there been a delay in mapping unemployment in the country. It is worth noting that the last such survey took place in 2011-12, as a consequence of some methodological questions about a previous survey in 2009-10. In the meantime, smaller sample surveys have become unavailable as well. 

This delay has happened at a turbulent time for the economy. There is considerable evidence, both anecdotal and otherwise, that joblessness in India is at dangerously high levels. Given that this is a burning issue, and that policy to address it should be framed on the basis of clear evidence, the delay in estimating and releasing these statistics is unconscionable. As with the continued absence of a back series for the new estimates of gross domestic product, the lack of official unemployment estimates undermines democratic accountability.

It is worth noting that there exist many other surveys, some of which use innovative methods, suggesting the unemployment problem in India is reaching crisis levels. This could have, in any case, been predicted following the double hammer-blow on small and medium enterprises (SMEs) represented by demonetisation and the goods and services tax. SMEs have, after all, been the engine of employment growth in India, given the constraints on hiring and firing imposed on larger enterprises. The Centre for Monitoring the Indian Economy or CMIE has revealed the results of one such survey. It estimated that urban unemployment in the first full week of October was at its highest in 11 months. The CMIE is able to produce high-frequency unemployment data with a large sample size using innovative methods such as hand-held devices. When non-state actors are able to manage this cumbersome task, it is an open question as to why the government, with far greater resources, is not able to map unemployment using modern technology. This administration has shown its willingness to take advantage of digital technology across the board — it is puzzling that this crucial aspect of governance, the collection of employment data, is not on the radar of Digital India.

Questions surrounding unemployment data as well as those surrounding the comparability (though not the reliability) of overall growth estimates mean that the true nature of the economy has become opaque. In order to swiftly respond to emerging situations, especially given the scale of some of the economic policy changes that have recently been deployed, the government needs up-to-date and robust data. Investors, too, will lose confidence in an economy in which data is not sufficiently transparent. This is not to impugn the integrity of India’s statisticians; it is just a reminder that political will and resources are required to increase the amount of high-frequency, reliable and comparable data from the authorities. This should be made a priority if sentiments are to be revived and policy is to be framed accurately.