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02 Jan 2018 12:03 PM, Comments Mahesh Vyas

Measuring employment and measuring jobs

Last week, the Labour Ministry released data on employment in the organised sector during the quarter ended March 2017. Effectively, this also makes available estimates of employment created in the organised sector during fiscal 2016-17. These estimates are made from the Labour Bureau’s Quarterly Employment Survey of selected sectors. The sectors covered by the QES include units that employ 10 persons or more in the manufacturing, construction, trade, transport, hotels and restaurants, IT/BPO, eduction and health industries.

According to this, 20.5 million persons were employed in the above as of March 2016 and, this grew to 20.9 million by March 2017.

According to the BSE-CMIE household survey, a total of 405 million persons were employed as of March 2017. So, the estimates presented by the QES account for about five per cent of the total employment in the country. The BSE-CMIE effort covers all kinds of employment including unorganised sector and even self-employed persons.

The scope of QES is limited but, it covers the more important kinds of employment. It measures jobs in the organised sector, which are the ones that people aspire for. These jobs grew by about 2 per cent in the year. They need to grow faster to absorb people from the unorganised sectors where productivity is low and social security is absent.

While the QES covers jobs in the organised sector, it does not include government jobs, which are the kind of jobs that people aspire for over any other kind of job including private jobs or self-employment.

Central government employed 3.5 million persons as of 2016-17. Data on employment in state governments, quasi government bodies and local government bodies is not available for recent years. The last such estimate is available for 2011-12. At that time, central government employment accounted for less than 15 per cent of total government employment. Assuming a similar proportion, total government employment could be of the order of 23 million today, a good 10 per cent higher than the estimated employment in the organised non-government sectors.

It should be easy for the government to publish information on total employment in all arms of government. While the Labour Bureau’s Quarterly Employment Survey is based on a sample survey and will therefore have a margin of error, government employment data will be based on official records and will therefore be a lot more reliable. Given that government is the most preferred employment and the largest provider of employment, it will be particularly useful if the government makes a concerted effort to release such information every month. It will be a useful complement to the QES - currently the only official fast-frequency measure of employment available in India.

Many readers could scoff at the continued importance of government jobs, a generation after liberalisation in the early 1990s. But, this is reality and millennials of small-town India continue to repose faith in a sarkari job.

Governments respond to these aspirations in their own way. A full-page newspaper advertisement last Sunday by the Jharkhand government says that the state provided employment to 1.65 million in the past three years. At first, it appears that the state government was claiming that it provided the jobs. This is of course, not true. The employment was not by the state and these were not necessarily government or other formal jobs.

Governments and the organised private sector provide jobs. The rest is employment by fending for your ownself and can hardly be called a proper job although it is counted as employment.

I cannot decide whether the Jharkhand government’s claims are impressive or incredulous. The latest Statistical Profile available is for 2006 that provides employment data till the year ended March 2005.

According to the BSE-CMIE effort at measuring employment-unemployment, 9.6 million persons were employed in Jharkhand during January-April 2016. This grew to 10.1 million in May-August 2017. The increase of 0.5 million employed in a little over a year does not imply increase in jobs. Most of them found employment, but did not necessarily find jobs. Employment includes working on own farms or as daily labourers or hawking bananas at a bus station.

It is important that we create jobs in the organised sector. It is equally important that we build credible statistical systems to measure and monitor our greatest challenge today - of jobs.

It is good that the Labour Bureau continues to produce the QES although the Task Force on Improving Employment Data had severely criticised this effort. It will be good if the government released data on its own record at creating jobs.


First Published in Business Standard Link