The controversy over NSSO’s self-contradictory unemployment data not only highlights the drawbacks in the survey, but also raises a finger at policymakers who, for the first time, questioned the same.
Soon after the results of the 66th Round of the National Sample Survey Organisation (relating to data collected in FY2009-10) were declared, it became the subject of a huge controversy and debate. In an apparent change in the scheme of affairs, the controversy this time around was spurred not by the usual critics of the government and its statistical system, but from within the government circles itself. Deputy Chairperson of the Planning Commission Montek Singh Ahluwalia slammed the National Sample Survey Organisation (NSSO) report for indicating fall in both employment and unemployment rates at the same time. He ended up claiming that there has been a ‘gross misrepresentation’ of the NSSO data. And the whole system, rather than questioning the priors, decided that the data must be wrong, and the NSSO was reprimanded for its ‘faulty’ investigative methods – something that had been accepted without question and with a lot of pride on many occasions in the past decade or so.
The controversy began when the NSSO, in its survey report titled ‘Employment and Unemployment in India’ (which was conducted between July 2009 and June 2010 and included a sample of over 1,00,000 households), found that employment in labour force had fallen from 42% in 2004-05 to 39.2% in 2009-10 and the unemployment rate had fallen from 2.3% to 2% in the same period. What this essentially translated into was that despite more than an average of 8% economic growth during these five years, sufficient jobs had not been created, suggesting that the government’s economic policy was not inclusive. But countering the argument, Ahluwalia pulled up NSSO for the self contradictory figures saying that the data collection methodology used was faulty. Subsequently, Secretary, Ministry of Programme Implementation T. C. Ananth, went on record to admit that the data was ‘confusing’. “Once you break up labour force participation for women, children and subsidiary status it becomes clear that employment has increased,” he clarified, claiming that the computation of the unemployment rate was a problem as it failed to take into account people who may be self employed. But interestingly, the NSSO data also shows a consistent fall in self-employment – an indicator that more jobs were being created because of economic growth.
As amusing as these official interventions may seem, there is no denial in the fact that the results of the latest survey of the NSSO reveal some important shifts in India’s labour markets and the nature of the growth process that determines these changes. Policymakers, who currently choose to stay in denial, need to take note of these trends seriously and analyse them in detail. For instance, there was an addition of 40-45 million people in the age group of 15-59 between 2004-05 and 2009-10 and unemployment rate for that period has fallen from 2.3% to 2% of the labour force. Agrees Pronob Sen, Former Chief Statistician of India, as he explains, “It is because of the fact that the additional people in the working-age population and some past unemployed people were given jobs, the unemployment ratio has come down.”
At the same time, one must also keep in mind the very fact that the unemployment rate (referred to as the Usual Status Activity – USI – in technical jargon) is computed as the number of people in the age group of 15-59 who are willing to work but did not obtain paid employment for at least 180 days during the past 365 days. Going by this, there is possibility that though many got some or other employment failed to qualify the USI norm and was termed as unemployed in the survey. Supporting the view, Sen says, “The USI is a poor indicator of the employment rate, but it is a reliable indicator when it comes to knowing whether workers are finding jobs or not. For instance, between 2004-05 and 2009-10, the working-age population grew by an average of 2% per year, which is about 8-9 million individuals. They all got some jobs, as did few people previously unemployed.”
Adding to these viewpoints, Senior Economic Expert S. K. Dutta says, “The main issue (in relation to the report) is that while determining the actual status of employment, all factors have not been taken into account. It (the survey) should have looked more into the semi-disguised employment sector, the partially employed sector and then the actual scenario could have come out.”
Another problem cited with respect to the ‘faulty’ data collection in the 66th Round is excessive reliance on outsourced contract investigators. This, say highly placed government officials, is not a new problem and has, in fact, been a characteristic that has plagued several recent rounds of the NSSO.
The idea behind the NSSO coming out with such survey results was to assist the policymakers in formulating better and effective policies for the economy. However, recent developments, such as denial in accepting survey findings and completely ignoring the other findings with respect to trends in the labour market, have resulted in a complete shift of focus from more relevant issues in this context. Add to this the jargon and confusion associated with almost all government findings, and things turn out to be even more complicated. This brings us to further question – Is there really a need for such a mammoth exercise? Perhaps, it’s time to ask those who commission such a survey – Do they really plan to show some light to help improve the scenario of unemployment in India or just want the survey to end up being yet another tool to fool the nation?
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