Measure of Employment Rate muddled by poor data upkeep by concerned agencies

Among numerous issues, the first and foremost, Modi government is widely criticized for failing to fulfill the promise of creating more jobs or insufficient employment generation. Modi government is blamed for bad economics as well despite robust economic indicators suggesting otherwise. Coming to unemployment, there has been a concerted effort to create a misleading narrative that Modi government has dismally failed in creating new jobs. To address, this issue, Pulak Ghosh from IIM Bangalore and Soumya Ghosh, Chief Economic Adviser carried out indepth analysis of data from various agencies to measure employment. But answer to this question was rather tough since even after seven decades of independence, India doesn’t have proper metrics to assess the ground situation without any bias.  The latest report published by Quarterly Employment Survey in December comes with a huge lag of 9 months and covered mere select 8 organized sectors as against 190. Essentially, employment surveys thus far have not portrayed the true picture and suffer from many limitations. Hence the authors tried to evolve a new format to account for employment in both formal and informal sectors on the lines of US monthly pay roll. It is referred to as what is called the Nonfarm pay roll which also accounts for 80% of workers who produce entire GDP of US.

Next the authors attempted to arrive at the correct numbers in terms of people joining the labor force by considering birth rate and then making a conservative estimate of the same. 15million labor force is entering work force every year. Of them only 6.6 million are qualified. Based on estimates, 7 informal jobs are generated annually. As per available data from EPFO (Employees Provident Fund Organization), ESIC (Employees State Insurance Corporation), NPS (National Pension System) and GPF (Government Provident Fund) round 1 crore people are employed in professional bodies and over 1.7 crores are employed by state, which includes education sector and Police. Auto industry provides employs 20 million. Arriving at these numbers has been really an excruciating experience for these economists, since proper records of number of people employed is not properly maintained by various professional bodies and even in informal sectors. States do a shoddy job in compiling the data and fail to have idea of number of people entering labor market annually since they don’t take population growth into account. Further, records are not updated regularly and even people employed for additional jobs as domestic helps etc remain unaccounted. So, the problem is manifold. Despite, glaring inadequacies, a perceptible increase in jobs has been recorded for the year 2017. In absence of fool proof pay roll reporting…it might be little presumptuous to levy baseless allegations….

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