Over the past couple of years, the creation of suitable job opportunities has been of key concern to policymakers. For successive governments, adequate jobs creation has been a vital target that many have sought to achieve through the help of both direct and indirect means of economic intervention. Most such policies, however, have had a varying degree of success. Keeping in tune with economic realities of their time and in light of an ever-expanding labor market and the mismatch in the demand and supply of qualified and skilled labor, most such policy efforts have fallen short of their mark.
But such trends are not without the usual short-term spikes. One such spike in jobs created was measured by the latest Quarterly Economic survey that was released recently. The report which captures the growth in jobs during the second quarter of FY 17-18 has claimed an overall growth in employment in eight key sectors. This included manufacturing, IT and transport, which rose by 1.36 lakh on a net basis in July-September 2017, as compared to the previous Quarter, says the survey.
"Estimates from present Quarterly Employment Survey reveal that there was an overall positive change of 1.36 lakh workers (in July-September) over the previous Quarter (April-June), across eight sectors at all India level," notes The Quarterly Employment Survey by the Labor Bureau for July-September 2017.
The results of the seventh Quarterly Economic Survey report revealed that there was an overall robust positive change of creating jobs for 1.36 lakh workers over the quarter i.e. 1st July 2017 over 1st Oct 2017, across 8 sectors at all India level.
The annual change in employment for that the latest of QES over the corresponding period of the preceding year (i.e. 01 Oct 2017 over 1st Oct 2016) reflects an increase of 2.5%. The sectoral break up revealed that there have been positive shifts in 7 out of 8 sectors that are monitored under the quarter employment.
The shift has been of the following magnitude:
- Manufacturing Sector (+89 thousand),
- Education Sector (+21 thousand),
- Transport Sector (+20 thousand),
- Trade Sector (+14 thousand),
- Health Sector (+11 thousand),
- Accommodation & Restaurant Sector (+2 thousand),
- IT/BPO Sector (+1 thousand),
- Construction Sector (-22 thousand) over last Quarter.
Within construction, this negative change is attributed to the construction of buildings and building completion and finishing.
The status of employment data collection in India
Within complicated economic systems, there are often different ways to gather data on how efficiently one of its arms has been functioning. When it comes to job growth, there are multiple sources and agencies which collect and collate data to facilitate informed policymaking within the labor markets.
The most important of all has been the Employment and Unemployment Survey (EUS) which is released by the National Sample Survey Office (NSSO). The labor bureau, on the other hand, conducts the quarterly employment surveys. These surveys are aimed at covering the quarterly shift in employment data from eight specific sectors. Traditionally, it only involves companies which employ more than 10 employees as participants in their surveys. But from the next quarterly survey onwards, even micro and small enterprises would be involved in the survey.
In addition to these two surveys, there are other bodies, like the Directorate General of Employment and Training (DGET) and The Employees’ Provident Fund Organization (EPFO), both of which fall under the Ministry of Labor and Employment, who are statutorily mandated to collect employment-related data. A detailed reading of the various agencies can be obtained here.
Given the need for good quality data at frequent intervals for effective policymaking, the government revamped the importance of Quarterly employment surveys. One of the first steps in the long chain of labor reforms that were to follow, the government back in 2014, restructured the scope and relevance of the Quarterly employment data.
The scope of the Quarterly employment survey was eventually increased to include industries such as retail, financial services, and telecom to make it a more relevant information source going, so far as to reverse an earlier proposal to scrap the survey. Hence, there has been a shift from the traditional dependence on annual and quinquennial surveys.
The larger problem
Although the shift was done to generate more real-time data, many employment surveys still remain riddled with problems that paint an incomplete picture. Most such data sets leave out a significant portion of the labor force, one that is primarily involved in the unorganized sector. In addition, most such survey-based employment data collection processes provide solely quantitative analysis rather than a qualitative analysis.
According to a McKinsey Global Institute report, the current data assessment by the Labor Bureau and the National Sample Survey Office (NSSO) does indicate broad trends. It doesn’t provide any insight into the quality of the country’s workforce. McKinsey notes that these labor statistics leave out information on independent work, as well as flexible or part-time jobs, even as they constitute a key part of today’s employment scenario.
“Indian government has not conducted any nationwide survey to find out the actual data of employment in the country since 2016. It was during this time that the annual EUS was scrapped and the Quarterly employment surveys were taken to be a right assessment of the state of jobs in India. Its limited scope and superficial assessment have been unable to create a complete picture of the changing economy,” said Santosh Kumar Gangwar, Minister of State, Labor and Employment
With the nature of work evolving at an ever-increasing rate, the changes and shifts within the labor markets have to be identified and noted in a more timely and comprehensive manner. This is vital for informed policymaking. Highlighting the state of job data collection in the country, Minister of State for Labor and Employment Santosh Kumar Gangwar recently admitted the Indian government has not conducted any nationwide survey to find out the actual data of employment in the country since 2016. It was during this time that the annual EUS was scrapped and the Quarterly employment surveys were taken to be a right assessment of the state of jobs in India. Its limited scope and superficial assessment have been unable to create a complete picture of the changing economy.
The different ways of collecting data on jobs often lead to different opinions on jobs creation. For example, recent Quarterly estimates have shown a gradual drop in job creation over Quarters. In a parallel study done by professors at IIM looking at datasets from Employees' Provident Fund Organization (EPFO), Employees' State Insurance Corporation (ESIC), General Provident Fund and National Pension System (NPS), have concluded that job scenario in India isn’t that bad. But this too isn’t error free.
Based on the recommendations of the taskforce for improving employment data in India, The NITI Aayog shifted to the Quarterly estimates to better gauge the impact of policies. But without increasing the scope of the surveys and increasing the depth of responses, the data from such surveys would only yield superficial trends which can be, in some cases, disproved by the use of other methodologies. In order to create an employment data collection system that gives an accurate picture, many more changes are yet to come. Some like steps to include more portions of the unorganized sector and the aim to increase the sectors that the survey covers presently limited to eight are welcome moves in such a direction.