Un­em­ploy­ment is not the big­ger is­sue; mean­ing­ful em­ploy­ment is, says CEA


Kr­ish­na­murthy Subra­ma­nian, the new Chief Eco­nomic Ad­vi­sor (CEA), be­lieves there should be a de­bate on data — be it on jobs or the econ­omy — and that volatil­ity is not nec­es­sar­ily an er­ror.

“Data’s very im­por­tant. I would be care­ful when com­ment­ing on num­bers,” he told Busi­nessLine in an in­ter­view. “As an aca­demic I can vouch for one thing — if you tell me to do some­thing then I will think not twice but 10 times. That is gen­er­ally in an aca­demic’s DNA.”

The changes in the back series were done as part of a process to bring it more in line with the UN sys­tem to mea­sure na­tional sta­tis­tics, said Subra­ma­nian. It was pri­mar­ily done to be able to mea­sure ac­tiv­i­ties in a bet­ter way, to bring in a bet­ter proxy, he added. The jobs de­bate has been a rather in­ter­est­ing one, said Subra­ma­nian. How­ever, what mat­ters is not a “50 ba­sis point or 1 per­cent­age point change in the em­ploy­ment rate, but the is­sue of mean­ing­ful em­ploy­ment”, he added. The data do not ad­e­quately cover the nu­mer­ous ac­tiv­i­ties in the un­or­gan­ised sec­tor, he ob­served. “Un­em­ploy­ment is not the big­ger point to de­bate, it is the mean­ing­ful em­ploy­ment.”

The econ­o­mist’s ba­sic tool is de­mand and sup­ply, said the CEA. “What you see as an equi­lib­rium is an out­come of de­mand and sup­ply,” he said. “So the num­bers in the jobs data are an out­come of the sup­ply side — the num­ber of jobs which firms are cre­at­ing, and the de­mand side — the num­ber of peo­ple skilled enough to take those jobs,” he said, adding that while ev­ery­one is fo­cussing on the sup­ply side, the de­mand side ques­tion is not be­ing asked.

In­ter­view Kr­ish­na­murthy Subra­ma­nian, CEA

Two-part phe­nom­e­non

“We have to re­mem­ber that de­mon­eti­sa­tion and GST were a twopart phe­nom­e­non that ex­panded the for­mal sec­tor,” he said. It is im­por­tant to keep in mind that for any proxy, you would have to mea­sure the ac­tiv­i­ties be­fore it, and the same would not be tuned well enough to be able to as­sess a shock that was com­pletely unan­tic­i­pated, he added.

On the con­tro­versy over jobs data, he said: “My pref­er­ence is to com­ment on data that is re­leased so that one can study and un­der­stand it.

“There­fore, I would go back to data that has been put out in the Eco­nomic Sur­vey, for in­stance. If you take the EPFO data, it does not have data on firms hav­ing less than 10 work­ers and that is why it is un­der­es­ti­mated in the sense of em­ploy­ment cre­ation. If you re­mem­ber, ac­tu­ally, 73 lakh jobs were cre­ated over a pe­riod of 15 months. So, this is some­thing which I would like to vet.”

Jobs data

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