Time for India to move away from larger sob-stories of falling employment

Published: November 20, 2019 2:20:44 AM

It’s time India moves away from the larger sob-stories of falling/stagnating employment, towards where the light and dark spots are, and what they reveal about a rapidly-changing economic structure

India economy, economy news, employment, falling employment rate, NSS, PLFS, employment news, employment news 2019In the accompanying table, please note that while the Usual Principal Status figures show a rise of about 45 million, that of Subsidiary Status shows a fall of about 94 million.

By Amaresh Dubey &
Laveesh Bhandari

Employment has been the subject of much argument over the past few years, and it appears that it will continue to be so. We conducted a simple exercise to understand how employment patters are changing over time—we used the comparable PLFS and NSSO data of surveys conducted in 2004-05, 2011-12 and 2017-18. And within that, we analysed the employment reported as per usual primary status.

But first the methodology. Within the ambit of NSS surveys, there are two methods of calculating employment and unemployment—the Usual Primary method and the Usual Primary Subsidiary method. We use the former; some others use the latter. There is nothing extraordinary about what we do and what others do, except that our aggregate results differ. Note that only the aggregate results differ, the patterns don’t, because we have a primary look at the underlying patterns that make up the whole, while others concentrate on the aggregate figures—be they related to employment or the other side of the coin, unemployment.

So, what is the difference? To put it simply, the NSS and later PLFS questionnaire ask each person whether they were employed and what was the primary and subsidiary work? Those who report their usual primary status to be homemakers, students, retired or unable to work tend to be classified as out of the labour force. Now, the interesting thing is that some people who classify their primary activity to be not in the labour force may also take up some employment for a limited amount of time (less than six months). This is subsidiary employment that is for only a minor part of the preceding year.

The question, then, is, should it be included in total employment figures? What are the pros and cons for subsidiary employment inclusion or exclusion? We argue here that it is time policy focused only on primary employment and discarded the Planning Commission method of adding subsidiary work to total employment figures.

In the accompanying table, please note that while the Usual Principal Status figures show a rise of about 45 million, that of Subsidiary Status shows a fall of about 94 million. Of this 94 million, about 65 million already have a Principal Status, so it is not that they are out of a job. That mostly leaves those not in the labour force with a Subsidiary Status denoting work, their numbers have fallen by about 27.7 million and were about 12.8 million in 2017-18—falling steadily throughout the period.

Moreover, adding Subsidiary Status jobs with Principal Status jobs will necessarily yield wrong insights into how employment is changing in an economy marked by rapid technology changes.

That primary employment is rising gives us much hope to build upon. Analysing its patterns, as mentioned, will provide insights into how to accelerate those changes that are creating greater opportunities. The fall in subsidiary employment has a different colour, and it needs to be addressed separately.

Finally, what work is done under Subsidiary Status? The bulk of the work is for household enterprises and most of those are unpaid. And if that is falling, why is it of policy interest? There is a very large literature in the country on disguised unemployment and unproductive and extremely small household enterprises. Employment marked by Subsidiary Status largely reflects that element. We, instead, focus on the larger problem of primary employment.

We find many such dark spots—less educated, self-employed, the agricultural-cropping sector, many manufacturing segments, less educated women, rural areas, etc. But we also find many bright spots—middle school educated, graduates, many personal services, livestock sector, agricultural services, etc. There is a deep structural shift occurring in the Indian economy, and a fascinating and rich picture is emerging as more data is accessible.

We would be more keen on seeing a wider discussion on these patterns, because that will better help devise economic policies that can impact employment more. Whoever estimates the numbers, it is time we moved away from the larger sob-stories of falling/stagnating employment, towards where the light and dark spots are and what they reveal about a rapidly-changing economic structure.

Dubey is professor, JNU; Bhandari is an economist and heads Indicus Foundation.

 

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1NSO consumer spending report: How Narendra Modi’s advisors are cutting him off from reality
2MPs missing the meeting on Delhi pollution violated trust of citizens
3India needs a central coordinator for its cybersecurity ops