Interview of PC Mohanan member National Statistics Commission: On Controversies around India’s unemployment data..

PC Mohanan gives a no holds barred interview on Indian unemployment report and many other things:

India’s statistics minister Sadananda Gowda told Parliament last week that reports of the unemployment rate touching 6.1% in the NSSO survey is fake. Having headed the survey, how do you react?

I personally cannot agree. The NITI Aayog (a government think tank) was the first to say that it’s a draft report. Once I approve it, how is it a draft report? The NITI Aayog CEO (Amitabh Kant) gave some reason why this is not comparable, which is also misleading. When we approve a report, I am not going to give a figure which is not comparable with the other ones. Second, the concept of employment and unemployment are universally accepted. International Labour Organization prescribes the standards, we all follow it.

The government also keeps talking about collecting and processing the quarterly data from July to December 2018. Do you expect this to be much different from the annual survey’s findings?

I don’t expect much variation between the annual data and the quarterly data. All Western countries produce quarterly employment data. We have quarterly data on GDP, but no employment data. So, under a new system, we thought we will make an attempt to produce quarterly employment data. But in rural areas, quarter-to-quarter changes will hardly be any. So we thought, let’s try for the urban area at first. It is kind of a trial, for one or two years we will see. The annual reports are based on a first visit, the quarterly will depend on the second or third visit. They are two different surveys—in the sense that the quarterly reports you are readying are only for urban areas, whereas this 2017-18 NSSO survey is rural plus urban. In India, you don’t expect too many changes in annual employment from the quarter. Here we don’t give people unemployment allowance or security. And many of the people employed are in the government sector. So, quarter to quarter changes may not be that much and the annual data will have no relation with the quarterly.

He shares some wisdom on unemployment numbers. It is not as bad as we think:

How bad is India’s unemployment?

Unemployment goes up and down in all countries. In India, traditionally we had very low unemployment that it is not at all visible, it is only in the leaked report that we are seeing a high. In India, if you hang around a place for some time and you always would get some work to do, it may not be much productive work. Those people were never recorded as unemployed. But educated employment has always been high in India, may not be as high as what we see now. Unfortunately, NSSO surveys are not very good in finding out why this has happened except say the growth of education. But we don’t ask the question why are you unemployed. Obviously, there is a mismatch between what the candidates are aspiring and what is available in the market. When I first saw the numbers first, I realised it may not be comfortable for the government. But I really understand why the government is so worried about us. We only provide the numbers, we are statisticians and not economists. They could have released the data and interpreted it in some manner to tackle the damage.

What are your thoughts on the jobs data?

Having personally seen the numbers, I think it is a story of rural transformation. Take for example, education. Instead of dropping out at a very early age, the percentage of women in the education system is very high until the age of 23-24. Earlier, it used to be only up to 17 years. So, there is a five-year shift; these people are no more in the labour force because they are still in the colleges. So that will reduce the labour force to some extent because they are out of the labour force. And earlier, the unemployment used to start at 20 onwards, now basically it is 24 onwards, so 20-24 they are in colleges and all that. So there’s a shift in the employment pattern from the report.

Is this is the biggest factor which increased unemployment?

No, there are other factors. Once they come out from the colleges, they are no more prepared to work on their father’s farm or looking after something and then get married and become housewives. I think awareness and aspirations have gone up. They don’t want to enter into a low-productive work. This immediately will pick up the unemployment ratio because they are not showing up in the unemployment-numerator.

But they don’t account for the downfall in workforce participation?

It has been coming down for some time. The previous one too showed that it has been drastically falling for rural females. If you look at more carefully, it is the marginal employment, for instance housewives who might work for morning one or two hours on the farm or in a shop. All of them are not full-time workers. This kind of job I personally find that there is a decrease.

On one hand, you see GDP improving, and on the other hand, you see unemployment also increasing. How do you make sense of this?

Yes, one might wonder that when fewer people are working, how is the GDP going up. But you must understand that somehow in India, the relationship between employment and GDP has been not that strong. The reduction of the jobs are mostly taking place in the small and micro enterprises and I think their contribution to the GDP is not that much, when compared to big corporates.

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