Building bridges

Fast-frequency measures on employment/unemployment are available for free from CMIE. Government should capitalise on these and concentrate its resources on the EUS and on building strong human capital

India's official stance with respect to collection and dissemination of data on employment / unemployment is getting increasingly uncertain.

According to a report in The Indian Express last Friday, the government seems to have "junked" results of the National Sample Survey Organisation's Periodic Labour Force Survey (PLFS). Such a decision was reportedly taken in a meeting between NITI Aayog and the Labour Ministry. Till Monday noon, there was no statement from any of these agencies or the Ministry of Statistics and Programme Implementation refuting this report.

If this report is therefore true, then it raises a question whether the Standing Committee on Labour Force Statistics has examined issues of comparability and methodology of the PLFS as stated by the Chief Statistician of India in an article in Indian Express just a week earlier on February 14. The expectation was that the PLFS report would be released after the Standing Committee's examination. But, it now appears that the report has been rejected by the government, not just withheld.

The government has reportedly decided to use information on Mudra loan beneficiaries available in Labour Bureau's household survey and extrapolate all direct and indirect employment estimates available from this survey over all Mudra loan accounts to estimate the jobs created in recent times.

If this is true, then we can infer that the government considers the Labour Bureau's household survey as reliable. If it is reliable then it can be argued that the report should be made public.

According to the Indian Express report, it is NITI Aayog again that is intervening over matters related to official statistics. If this is true, then  we may also infer that the official statistical agencies have implicitly surrendered their independence to the Aayog by succumbing to its intrusions. This is a very sad outcome of an aggressive attempt to control the narrative on jobs.

It is hard now, to not accept the hypothesis that the government is only interested in data that show its performance in good light with respect to jobs creation and that it is not interested in any professional, established statistical systems or institutions that do not show good results - whether these are of the government or of private agencies such as CMIE. 

But, lets keep hope alive.

None of the characters in the sordid drama of employment statistics in India would have liked events to pan out the way they have. If we can trash those memories and chart a path of building a better environment of professional institutions, reliable data and healthy discussions, we may find solutions to our problems more easily and we may also enjoy our successes better.

While CMIE regularly publishes estimates of employment and unemployment it strongly believes that the need for an independent professional official statistical machinery is imperative.

It is apparent now that unemployment estimates produced by CMIE's Consumer Pyramids Household Survey (CPHS) are broadly in line with estimates of the PLFS. The PLFS estimates an unemployment rate of 6.1 per cent and CPHS estimates it at 5-7.5 per cent for the same period depending upon the definition of the the unemployed. Differences in methodology, sample and execution reflect the different objectives of the two surveys.  CPHS aims to generate fast-frequency time-series of employment and unemployment while NSSO's quinquennial Employment / Unemployment Surveys (EUS) aimed to get a deep understanding of the labour markets as of a point in time.

It is easy to see that the EUS and CPHS complement each other. It is also easy to see that it is not possible for a single survey machinery to simultaneously be a fast-frequency longitudinal survey and also be a deep-dive cross-sectional survey at the same time.

It would be much better for the government to improve the EUS with a larger sample and a bigger investment into creating a stronger internal cadre. A stronger internal cadre is arguably the most important requirement to resurrect the Indian Statistical Service to its past glory. A strong cadre will also ensure that the ISI will keep its professional freedom unencumbered.

It is perhaps a good time to look at a new way forward. Partnership with private agencies is not a bad idea. Fast-frequency measures on employment / unemployment are available for free from CMIE. The government should capitalise on these and concentrate its resources on the EUS and on building strong human capital.