Bring clarity to job data in India

One way is to hold the national sample survey more often

There is a lot of hullabaloo every time there is a debate on jobs in India. This was further proven by the results the Employees Provident Fund Organisation (EPFO) amnesty scheme for the formal sector that ended in June. The EPFO asked firms, which had hidden employees who were eligible for PF contributions, to bring them into the rolls. The bait: The companies would not be penalised for this disclosure. Over 10 million workers were added to the PF rosters during the amnesty. To put that into perspective, the government’s estimates for total formal sector employment in India is about 48 million of whom 38 million were on the EPFO roster. The amnesty increased the EPFO’s subscriber pool by 26% and probably total formal sector employment estimates by a similar percentage.

While the political and intellectual discourse is dominated about whether enough jobs are being created and how government policies are or are not helping employment, the truth is much of this is done wearing sunglasses in a dark room at night. As the vice-chairman of Niti Aayog, Arvind Panagariya, pointed out, of the two official surveys used to calculate the state of employment, one misses all shops and plants that employ less than 10 people and is patchy in its coverage of economic sectors, while the other, which is more accurate, the national sample survey, is done only every five years. He proposed that, at the very least, the survey should be done more often. There are other issues regarding measures of the job situation, especially in the informal sector and mobile labour.

It is not true that India is suffering from jobless growth. What is true is that India is not generating enough jobs to absorb the millions of youth entering the workforce every year. This has been further aggravated by the continuing stagnation in private sector investment and, most recently, by demonetisation. What matters politically, in the end, is popular perception and opinion polls are showing that not only is employment seen as India’s primary problem, concern on this issue is now greater than it was under the last two Congress-led governments.