Experts disagree with data showing that India’s jobless rate is lower than those in western countries
New Delhi: Two surveys conducted by separate government agencies have
produced different results on the unemployment situation in India,
casting doubt over their credibility.
The latest annual survey of
employment and unemployment by the Labour Bureau of India has shown a
3.8% unemployment rate in India, while an earlier survey conducted by
the National Sample Survey Organization (NSSO) showed this at 2% for
2009-10.
The Business Standard first reported on the Labour Bureau report on 10 July.
Manish Sabharwal, chief executive of TeamLease Services Pvt. Ltd, a
human resource firm, said that the latest survey was a gross
understatement of the unemployment rate. “Like poverty, unemployment
definition needs a national debate. The 3.8% unemployment rate is
unbelievable—it’s science fiction. The rate must be a multiple of this
rate—in the range of 15% to 19%,” he said.
Sabharwal added that
the precision of the study is misleading. “It’s more dangerous than
just understatement as such surveys will mislead policy framework
(meant) to address such problems.”
Himanshu, assistant professor at Jawaharlal Nehru University and a Mint
columnist, said the true unemployment rate in India is difficult to
measure and hence too much credence shouldn’t be given to these numbers.
“In a poor country like ours, nobody can afford to remain unemployed
for a long time. Even if one is unemployed, he will hesitate to report
it because of the social stigma attached with being unemployed,” he
said.
A better way of looking at unemployment is worker population
rate (WPR), which is defined as the number of persons employed per
1,000 people, Himanshu said. However, he pointed out that the 50.8% WPR
reported by the Labour Bureau seems to be an overestimation as NSSO data
for the same indicator has always been at the 40-42% level.
Experts
disagreed with the Labour Bureau’s proposition that India’s
unemployment rate is lower than those in western countries, including
the US (8%), Spain (25%), Greece (21%) and Ireland (14%).
Pronab
Sen, principal adviser in the Planning Commission, said India can’t be
compared with developed countries because of the small size of its
organized sector. “Most of the unemployment in India is among the youth.
Adult unemployment is very small,” he said.
Bal Ram, director of
the Chandigarh-based Labour Bureau, said that the unemployment rate of
9.4% reported in 2009-10 was not comparable with the present survey,
which pegs the unemployment rate at 3.8%.
He said the sample size and methodology used for the second annual survey was different.
While
the sample size for the 2010-11 survey was over 128,000 households, the
one used previously was a little over 46,000. While last year only 300
districts from 28 states and Union territories were taken for the sample
survey, this time it was conducted across the country.
In terms
of methodology, the sample selection was in proportion to the size and
population of a state rather than an even spread adopted for the
previous annual survey, Ram said. However, he said that the data used in
the current survey was as credible as NSSO data.
According to the
Labour Bureau survey, the majority of people were found to be
self-employed. While 48.6% are said to be self-employed, 19.7% are wage
or salary earners and the rest 31.7% belong to the casual labour
category at the all-India level.
“At all-India level, the
majority of the employed persons i.e. 52.9% are engaged in the primary
sector (agriculture, forestry and fishing) followed by 27.8% in the
tertiary or services sector and 19.3% in manufacturing and construction,
i.e. the secondary sector,” the survey said.
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