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Friday, July 20, 2012

Two govt surveys sharpen debate on India’s unemployment data

Experts disagree with data showing that India’s jobless rate is lower than those in western countries
New Delhi: Two surveys conducted by separate government agencies have produced different results on the unemployment situation in India, casting doubt over their credibility.
The latest annual survey of employment and unemployment by the Labour Bureau of India has shown a 3.8% unemployment rate in India, while an earlier survey conducted by the National Sample Survey Organization (NSSO) showed this at 2% for 2009-10.
The Business Standard first reported on the Labour Bureau report on 10 July. 
Manish Sabharwal, chief executive of TeamLease Services Pvt. Ltd, a human resource firm, said that the latest survey was a gross understatement of the unemployment rate. “Like poverty, unemployment definition needs a national debate. The 3.8% unemployment rate is unbelievable—it’s science fiction. The rate must be a multiple of this rate—in the range of 15% to 19%,” he said.
Sabharwal added that the precision of the study is misleading. “It’s more dangerous than just understatement as such surveys will mislead policy framework (meant) to address such problems.”
Himanshu, assistant professor at Jawaharlal Nehru University and a Mint columnist, said the true unemployment rate in India is difficult to measure and hence too much credence shouldn’t be given to these numbers. “In a poor country like ours, nobody can afford to remain unemployed for a long time. Even if one is unemployed, he will hesitate to report it because of the social stigma attached with being unemployed,” he said.
A better way of looking at unemployment is worker population rate (WPR), which is defined as the number of persons employed per 1,000 people, Himanshu said. However, he pointed out that the 50.8% WPR reported by the Labour Bureau seems to be an overestimation as NSSO data for the same indicator has always been at the 40-42% level.
Experts disagreed with the Labour Bureau’s proposition that India’s unemployment rate is lower than those in western countries, including the US (8%), Spain (25%), Greece (21%) and Ireland (14%).
Pronab Sen, principal adviser in the Planning Commission, said India can’t be compared with developed countries because of the small size of its organized sector. “Most of the unemployment in India is among the youth. Adult unemployment is very small,” he said.
Bal Ram, director of the Chandigarh-based Labour Bureau, said that the unemployment rate of 9.4% reported in 2009-10 was not comparable with the present survey, which pegs the unemployment rate at 3.8%.
He said the sample size and methodology used for the second annual survey was different.
While the sample size for the 2010-11 survey was over 128,000 households, the one used previously was a little over 46,000. While last year only 300 districts from 28 states and Union territories were taken for the sample survey, this time it was conducted across the country.
In terms of methodology, the sample selection was in proportion to the size and population of a state rather than an even spread adopted for the previous annual survey, Ram said. However, he said that the data used in the current survey was as credible as NSSO data.
According to the Labour Bureau survey, the majority of people were found to be self-employed. While 48.6% are said to be self-employed, 19.7% are wage or salary earners and the rest 31.7% belong to the casual labour category at the all-India level.
“At all-India level, the majority of the employed persons i.e. 52.9% are engaged in the primary sector (agriculture, forestry and fishing) followed by 27.8% in the tertiary or services sector and 19.3% in manufacturing and construction, i.e. the secondary sector,” the survey said.
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