Govt to conduct annual job survey, labour bureau study not realistic: Panagariya
The Modi government’s three-year celebrations have been marred by the Opposition’s charges of jobless growth and a slowing economy.
The Opposition says job creation in recent times has been the slowest during the NDA rule. The government has responded by setting up a task force led by National Institution for Transforming India (Niti) Aayog vice-chairman Arvind Panagariya to device a methodology for timely and reliable employment data.
In an interview to HT, the 64-year-old former economics professor said the government would ask the National Sample Survey Office to conduct an employment survey for “the real picture” on job creation. Panagariya also spoke about the farm sector crisis as he brushed aside claims that demonetisation had hammered the economy.
Edited excerpts of the interview:
Q: The government has spoken about the credibility of the employment data and you are heading a task force to decide on new methodology to measure job creation in the country. What is the problem with the present way to calculate jobs?
Employment is calculated on the basis of two separate surveys. One is the household survey by the National Sample Survey Office (NSSO) and other is establishment survey of the labour bureau. The last NSSO survey was done in 2011-12 and the establishment survey of the labour bureau was in 2015-16.
Most of the present debate on job creation is on the establishment survey for eight sectors that the labour bureau started after the global financial crisis in which industries with more than 10 workers are surveyed every three months.
The data is used to generate nation-wide numbers for these eight sectors and the problem is with the multipliers used to convert the sample into national numbers. It is not a random sample like (in) NSSO. The survey covered all the states only after December 2016 and before that the data was for only 11 states. This restricted sample covered 3-3.25 crore people in these sectors which was less than 10% of the total 47 crore people estimated in the workforce. Even if we take out 20-25% people in agriculture, the coverage is poor. You don’t know what is happening to the industries having less than 10 persons.
Q: What is the way ahead?
The best and most extensive survey is by the NSSO as it is more reliable. Its frequency is very low and we are going to propose to conduct the survey on annual basis and for the urban areas, once in three months. This will help gauge the employment created in a more reliable and realistic manner.
Q: Even NSSO employment numbers are confusing and sometimes misleading. Someone working even for a few days is considered employed.
The NSSO methodology is similar to anywhere else in the world. We cannot change that. The weekly NSSO figure is quite correct. It tells us that unemployment rate in India was around 5-8% in 2011-12. The usual employment status (if a person is working for a day in 183 days out of 365), which is often quoted, is more liberal and gives unemployment rate of 2-3%. To end the confusion, we will suggest that employment be measured through weekly status while providing usual status.
Q:It is being said that employment generation has been poor.
It is a perception being given in the absence of good data. This perception is being created as a large number of the workforce is in the unorganised sector – self employed, small firms and self-owned enterprises. In that situation, as I have been arguing, the employment and unemployment surveys are giving okay numbers.
Q: You have been speaking about underemployment. What is that?
There has been a lot of underemployment and it has been a long-standing problem. Making perceptible dent in it will take a long time. I say that if there are two or three people for the same job then there is underemployment. Like if you having a plumbing problem and two or three persons are coming to resolve it, then it is underemployment.
Q: Have enough jobs been created by the NDA government? The information technology (IT) sector is losing jobs.
One general point is that we look at jobs that disappear and don’t look at jobs that appear. IT people are saying they are increasing jobs. Saurabh Srivastava, who was one of the founders of Nasscom, said that in the last three years six lakh additional people have been employed by five largest IT firms alone. He predicts that 25-30 lakh new jobs will be created in the next few years. There are industries where jobs have not been created like construction, which has a huge potential. The government is working on it. In labour-intensive industries like textiles we have to create more jobs. With small investment in these sectors, we can create a large number of jobs.
Q: Despite the government focusing on farm sector revival, agriculture is in distress. Farmers in Maharashtra and Madhya Pradesh are demanding a loan waiver. Do you think loan-waiver is the road forward?
Farm loan waiver is largely a political issue for the government and can provide relief. In Uttar Pradesh, it was an election promise and the waiver given was for small and marginal farmers. I think it is a balancing act for politics.
The waiver can also create pervasive incentive for those who are paying back their loans on time. On reviving the farm sector, we have made several suggestions which include remunerative prices for crops, allowing farmers to directly sell produce to consumers or corporate firms and deficiency payment to farmers in case the produce price falls below the minimum support price. We have also suggested precision farming, promoting micro-irrigation and opting for high-value horticulture.
Q: Do you think there was an impact of demonetisation on growth. Experts say the latest GDP figures suggest so.
You have to look at annual figure of 7.1% growth. It is higher than what all critics (of demonetisation) said. I don’t think there was any major impact. There can be marginal one, which cannot be measured quantitatively. In the early 1990s when I said that we can grow at 7%, people thought I was crazy. In the present world, 7.1% is high. Yes, we want to grow at 10%.
Q: High growth is for corporates and economists but not for salaried people like me or farmers in villages.
That is not true. A recent report said salaries in IT sector had risen on an average by about 5%. Remember inflation is very low. So, this wage increase in real terms is good. I am happy to see that all of us are aspirational now. In my era, you will see a decade pass by without any change. In Mayur Vihar (east Delhi), my wife tells me that after every three weeks the place looks different. Lot is happening in the infrastructure sector. But, we also have legacy sectors such as construction, textile and steel, which are still struggling. Large parts of the economy are flourishing.