Concealing unemployment data is Centre's own goal

Modi govt’s warning about private economic data ends up highlighting its failures

Maqsood Maniyar | NT

Bengaluru: As the New Year rolled around, the Ministry of Labour and Employment (MoLE) under the Modi regime had a curious reaction to a private unemployment survey, choosing to put out a press release claiming that said data was not trustworthy.

The press note entitled ‘Rebuttal to the news on “unemployment rate” did not refer to the private think tank Centre for Monitoring Indian Economy (CMIE) but merely refers to a private organisation. CMIE had released a survey report, which found that the unemployment rate had increased from 8 percent in November to 8.3 per cent in December, a 16-monthhigh.

The issue assumes significance because, in the absence of monthly government data on joblessness, a lot of policy researchers and economists depend on CMIE’s findings. The Centre alleged that the data released by CMIE suffered from procedural issues such as inadequate sample size and therefore their methodology was “generally neither scientific nor based on internationally accepted norms.”

The MoLE claimed that such private organisations either ended up underreporting or over-reporting joblessness based on the flawed data at hand. Instead, they referred to their own Ministry of Statistical and Programme Implementation (MoSPI) based on the quarterly Periodic Labour Force Survey (PLFS), using it to claim that there had been a post-pandemic recovery.

On the other end of the spectrum of opinions, economists Jean Dreze, Anmol Somanchi and Ajitava Roychowdhury, apart from historians like Nikhil Menon hold that the monthly CMIE survey, which takes into account 1.7 lakh households, underreports unemployment because of certain procedural flaws, including the locations where from where sampling was gathered.

Ultimately, these contentions exist because of the absence of monthly data on employment from the Central government, which abolished the Labour Bureau’s quarterly enterprises surveys in March 2018. Interestingly, it came a year after scrapping the annual Employment Unemployment Survey.

Moreover, a 2017-18 jobs report by the National Sample Survey Office (NSSO), which works under the Ministry of Statistics and Programme Implementation (MSPI), had pegged the unemployment rate at 6.1 percent, a four-decadehigh. The Union government sat on the results until after the 2019 general elections had been concluded, giving the data exercise a political colour.

Unemployment underreported: Economists

Economists, on the other hand, hold that the manner in which CMIE gathered its data was not up to the standards of International Labour Organization (ILO). Dreze and Somanchi pointed out that the sample was collected from what would be regarded as the “main streets” of the village, making it “ biased in favour of well-off households.”

Explaining the flaws in CMIE’s broader tri-annual Consumer Pyramids Household Survey (CPHS), the duo wrote in June 2021 this of the sample in The Economic Times (TET): “The bias is, perhaps, not surprising, since the sampling method apparently consists of surveying the ‘main street’ first in each sample village or enumeration block, and proceeding to inner streets only if the sample size requires it,” they wrote.

“If only for this reason, poor households are bound to be under-represented.” Professor of Economics at Jadavpur University, Ajitava Roychowdhury had a similar view and told TET that the CMIE survey failed to take into account, the plight of the poorest of the poor, namely the daily wagers.

“If someone says on the day of the survey that he is doing something, for example, mobile hawking or rag picking, this person is considered as employed [by CMIE],” he said. “The CMIE does not differentiate between those who are in decent jobs and those who are not. If the ILO criteria of decent jobs are applied, the unemployment rate will be much higher,” Roychowdhury added.

Information vacuum blamed

Experts hold that the absence of monthly government data on unemployment is a symptom of the larger malaise that is the crumbling data infrastructure of the country. Economists have long held that India’s critical socioeconomic data is either absent or unreliable. The Economist in its May edition had said: “India’s once-vaunted statistical infrastructure is crumbling.

Reserve Bank of India governor Duvvuri Subbarao said in his book that flawed data provided by the Centre had led to bad monetary policy decisions.

Historian Nikhil Menon, who penned a book on how the country’s once great statistical institutions were falling apa