More surveys, less jobs

Beginning this week the government will launch an ambitious enterprise survey to measure employment in medium, small and micro enterprises. The survey will focus on the unorganised sector, ie enterprises that employ less than 10 workers. The survey will be conducted by the Labour Bureau and according to media reports it will use the 2013-14 Economic Census as its base. Last April, the government initiated Periodic Labour Force Survey (PLFS), a household survey conducted by National Sample Survey Organisation to measure unemployment. Results of both surveys are expected by late 2018 or early 2019.

An enterprise survey is conducted to understand the nature of employment. This is in contrast to a household survey that is useful to estimate both employment and unemployment. An enterprise survey is useful to understand the distribution of employment by industry, by type of organisation of employment (public sector, private sector, etc) or nature of employment (part-time, full-time, permanent or temporary).

An enterprise survey cannot provide any estimate of the unemployment rate or the number of unemployed persons, which is our biggest challenge. A measure of the unemployment rate or the number of unemployed persons can only be found by conducting a household survey based on a large and representative sample.

The enterprise survey initiated by the government is not what NITI Aayog's Task Force on Improving Employment Data had proposed. The Task Force recommended an enterprise survey based on GSTN and a separate survey that covers those enterprises not covered by the GSTN. This is not an Economic Census either. Given that an Economic Census is supposed to be conducted every five years and the last one was done in 2013-14, a new Economic Census is due now. But, how does that fit into this survey of the unorganised sector?

The motivation for the new survey reported in the media is that the government hopes to show that employment has increased in the unorganised sector.

There are no announcements yet on releasing regular information based on the Employment Provident Fund Organisation's data. Would the survey of the unorganised sector be a regular feature or would it be another ad hoc effort for some expediency?

Although the PLFS was supposed to produce quarterly unemployment estimates for urban India, it has not announced any plans to do so, even a year after the survey was launched. Maybe, it will release all the quarterly data along with the annual data. That would beat the purpose of creating quarterly estimates. Maybe, the government statistical machinery will improve over time. The official statistical machinery must be strengthened. Ad hoc measures divert attention.

The CMIE-BSE partnership continues to produce high quality, fast frequency employment / unemployment statistics. According to this survey which has a sample size that is larger than that deployed by NSSO, the unemployment rate in urban India in the four quarters of 2017-18 rose steadily -- from 4.7 per cent in the first quarter to 5 per cent then 5.7 per cent and finally 6.6 per cent in the last quarter.

The CMIE-BSE partnership also produces estimates for rural India. Unemployment here has also been rising. It was 3.7 per cent in the first quarter of 2017-18 and then it was 3.6 per cent in the second quarter. Then it rose to 4.4 per cent in the third quarter and finally to 5.4 per cent in the last quarter.

The overall unemployment rate has risen from 4 per cent in the first quarter to 4.1 per cent in the second, 4.9 per cent in the third and then 5.8 per cent in the last quarter. During the last quarter, the unemployment rate increased steadily from 5 per cent in January 2018 to 6.1 per cent in February to 6.3 per cent in March 2018.

The last quarter estimates are preliminary. These will be finalised in the middle of May 2018 to account for non-responses. Historically, these revisions have been small and do not make any material difference to the broad inferences. And the inference is clear -- that unemployment is rising and jobs are not.

Preliminary estimations suggest that jobs did not increase during 2017-18 compared to 2016-17.

Popular author, Chetan Bhagat reported results of a faster, and a yuppy survey using his Twitter handle. 87 per cent of the 20,000 respondents said that it was 'difficult' to 'very difficult' to find a job. And, 61 per cent of the respondents said that they expected anywhere between Rs.5,000 to Rs.15,000 a month. Chetan takes care to qualify that this is not a scientific survey, etc. But, the sample size is large enough for more than just a dekko. Where has the aspirational young Indian of 2014 vanished? They sure don't like frying pakoras as Chetan wrote last Sunday in Times of India.

 

Methodology

Consumer sentiment indices and unemployment rate are generated from CMIE's Consumer Pyramids survey machinery. The weekly estimates are based on a sample size of about 6,500 households and about 17,000 individuals who are more than 14 years of age. The sample changes every week but repeats after 16 weeks with a scheduled replenishment and enhancement every year. The overall sample size run over a wave of 16 weeks is 158,624 households. The sample design is of multi-stratrification to select primary sampling units and simple random selection of the ultimate sampling units, which are the households.

The Consumer Sentiment index is based on responses to five questions on the lines of the Surveys of Consumers conducted by University of Michigan in the US. The five questions seek a household's views on its well-being compared to a year earlier, its expectation of its well-being a year later, its view regarding the economic conditions in the coming one year, its view regarding the general trend of the economy over the next five years, and finally its view whether this is a good time to buy consumer durables.

The unemployment rate is computed on a current daily basis. A person is considered unemployed if she states that she is unemployed, is willing to work and is actively looking for a job. Labour force is the sum of all unemployed and employed persons above the age of 14 years. The unemployment rate is the ratio of the unemployed to the total labour force.

All estimations are made using Thomas Lumley's R package, survey. For full details on methodology, please visit CMIE India Unemployment data and CMIE India Consumer Sentiment.

The creation of these indices and their public dissemination is supported by BSE. University of Michigan is a partner in the creation of the consumer sentiment indices.