What are key methods and sources of unemployment data collection in India?

Currently, unemployment data is collected and disseminated by several departments, agencies, ministries in India. The primary agencies for survey and data collection are Central Statistical Office (CSO) and the National Sample Survey Office (NSSO) of the Ministry of Statistics and Programme Implementation (MOSPI). Other agencies include Labour Bureau of the Ministry of Labour and Employment (MoLE) and Registrar General and Census Commissioner of India under Home ministry. Further, Ministry of Micro, Small and Medium Enterprises (MSMEs) and the Directorate General of Technical Education (DGET) also occasionally collect employment data.

Sources of Data

The data regarding unemployment can come from four potential sources viz. Household Surveys; Enterprise Surveys; Administrative Data and Data from Government Schemes.

Household Surveys

Currently, there are three datasets on household survey as follows:

• Employment-Unemployment Survey of NSSO under MOPSI
• Annual Labour Force Survey by MoLE
• Population / census data from Office of the Registrar General & Census Commissioner.

Employment-Unemployment Survey (NSSO)

Employment-Unemployment Survey (EUS) is the most comprehensive survey providing labour force statistics in India. It was first conducted in 1955 and since 1972-73, is conducted every five years.  The latest such survey took place in 2011-12. The main problem with this survey is its very low frequency {5 years is too long} and time lag between collection and availability of results {data is collected for one year to cover all seasons, and it takes more than a year to disseminate}.

Annual Labour Force Survey (Labour Bureau)

To obtain more regular data on the labour force, the Labour Bureau under MoLE started conducting the Annual Labour Force Survey since 2009-10. Four more surveys have been conducted since then. The most recent one was conducted during 2015-16. The problem of this survey is that it collects data only for a part of year and is unable to catch the information covering entire year. Further, while the EUS covers the entire population, this survey reports data only for population aged 15 and above.

Population Census

Population Census collects data on main, marginal and non-workers. However, since census data comes every 10 years, these figures hardly get any attention.

Household Surveys – Significance and issues

Out of the given four sources, the household survey is the only one which can comprehensively cover the entire population / labour force and thus provides the most statistically valid estimates. This is the reason that it is primary method of estimation of unemployment in most countries. In India also, it is most useful since a large number of workforce is engaged in either self-employment or unorganized enterprises. However, as discussed above, time lag between two surveys and time taken in collection and dissemination of data are two problems of these methods. If we ignore the frequency, household surveys are best and most robust traditions of data collection in India.

Enterprise Survey

Currently, there are five datasets on enterprise survey as follows:

• The Economic Census by MOPSI
• Annual Survey of Industries by MoSPI
• Unorganized Sector Surveys of Industries and Services by NSSO
• Quarterly Employment Survey (QES) (Labour Bureau)
• MSME Census (Ministry of Micro, Small and Medium Enterprises)

The Economic Census by MOPSI

This data covers all the non-agricultural economic activities in the country regardless of their size or sector. It covers both industries as well as service sector. The First Economic Census was conducted in 1977. Subsequent censuses were done in 1980, 1990, 1998, 2005 and latest in 2013-14.

Issues with Economic Census

Economic Census could be the most reliable data, at least for enterprises in India, but it also suffers from severe problem of frequency and consistency. First, there is no fixed frequency of Economic Census. It has been conducted so far irregularly and haphazardly. Second, it covers only non-farm enterprises. It ignores the people engaged in self employment.

Annual Survey of Industries (MoSPI)

Currently, the Annual Survey of Industries (ASI) is the only regular and frequent survey in India. It covers the industrial units registered under Factories Act, 1948 and only those industrial units which employ 10 or more workers (if using power) or 20 or more workers (if not using power).

Significance

• As mentioned above, this is most regularly conducted survey. It collectrs data on several fronts such as number of workers, number of employees, man days, products manufactured, various types of capital, gross value of plant and machinery, wages and salaries, contribution to provident fund workmen welfare expenses etc.
• The ASI also estimates the number of workers employed as contract labour and their wages.

Drawbacks

Despite providing a large number of employment-related indicators, the ASI has several gaps due to which it is rarely been used to count the total number of workers in the economy.

• Firstly, it has limited coverage and covers only firms registered under Factories Act. Thus it ignores self-employed, farm workers, and enterprises which don’t qualify themselves to be included in it.
• Secondly, it uses an out-date frame.
• Thirdly, there is a large time lag in the data. For example, for 2015-16, the reference year is April 1 2015 to March 31, 2016 and the data are collected in 2016-17. At present, only 2014-15 survey results are available on the ASI website.

Unorganized Sector Surveys of Industries and Services (NSSO)

This survey is conducted occasionally by NSSO taking Economic Census as the sample frame. This also suffers from similar problems like annual survey.

Quarterly Employment Survey (QES) (Labour Bureau)

Labour Bureau conducts the Quarterly Enterprise Surveys (QES) to measure employment in eight broad sectors of industry and services. The survey covers enterprises with more than 10 workers in both urban and rural areas. It had been rolled out in the aftermath of the 2008 financial crisis to track the impact of the crisis on employment. It began in the October-December 2008 quarter with approximately 3,000 units. However, by the October-December 2015 quarter, units covered in the sample declined to below 2,000. Beginning in the January-March 2016 quarter, the sample has been enlarged to a little more than 10,000 units across eight sectors including manufacturing, construction, trade, transport, education, health, hotels and restaurants and business process outsourcing. This expanded sample covers about 81% of establishments with more than 10 employees.

Drawbacks

Despite its quarterly frequency, the QES has serious flaws for inferring the movements in employment at the national level. Majority of Indian enterprises are small (>10 workers) and this survey ingnores them. What it covers is only 1.37% of all enterprises in country.  Further, it covers only around 2.77 Crore workers out of a total of 47 Crore or more workers in total.

MSME Census (Ministry of Micro, Small and Medium Enterprises)

This collects data on Small Scale Industries (SSI) and the MSME sector through the MSME Census. Till date, it has conducted four such censuses, in 1973-74, 1990-91, 2001-02 and 2006-07. Its major problems are frequency, time lag and irregularity.

Administrative datasets

The administrative datasets are created during course of enrolling the workers in pension / medical insurance programmes and the information from income tax returns. The key sources of administrative data include the Employees’ Provident Fund Organization (EPFO), the Employees’ State Insurance Corporation (ESIC), the National Pension Scheme (NPS) and other similar sources relating to large private organizations.

Drabacks

Again this method is useful only in counting the workers engaged in formal employments. Further, currently, firms with more than 20 workers are only required to contribute to EPFO. Thus, it ignores then firms with 19 or less workers.

Government schemes

The government schemes enroll millions of people every year. Jobs generated by these schemes provided valuable information, albeit of some categories only. The data generally comes from MGNREGA, Pradhan Mantri Grameen Sadak Yojana (PMGSY), Micro Units Development and Refinance Agency (MUDRA), Integrated Child Development Services (ICDS) programme, Housing for All, Pradhan Mantri Kaushal Vikas Yojana (PMKVY), Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDUGKY), and various infrastructure projects and livelihood schemes that create jobs.