India’s unemployment survey report
India’s unemployment survey report
What in news about India’s unemployment survey report ?
- India’s labour participation rate which is very low by world standards, fell sharply after demonetisation.
- The women were largely at the receiving end and bore the brunt
About Special Data Dissemination Standard (SDDS):
- Monthly measurement of the unemployment rate is one of the requirements of the Special Data Dissemination Standard (SDDS) of the International Monetary Fund (IMF).
- The SDDS was established in 1996 to help countries access the international capital markets by providing adequate economic and financial information publicly.
- India was one of the early signatories of the SDDS.
- India complies with many requirements of the SDDS, but it has taken an exception with respect to the measurement of unemployment.
Exception: Govt does not produce any measure of monthly unemployment rate
- The Government of India does not produce any measure of monthly unemployment rate, nor does it have any plans to do so.
- Official plans to measure unemployment at an annual and quarterly frequency is in a shambles.
- This does not befit India’s claims to be the fastest growing economy and as the biggest beneficiary of a famed demographic dividend.
About Centre for Monitoring India Economy (CMIE) Survey
- The Centre for Monitoring India Economy (CMIE), a private enterprise, has demonstrated over the past three years that fast frequency measures of unemployment can be made and that seeking an exception on SDDS compliance is unnecessary.
- Moreover, The CMIE decided to fill India’s gap in generating fast frequency measures of household well-being in 2014.
- In its household survey, called the Consumer Pyramids Household Survey (CPHS), the sample size was 172,365 as compared to that of the official National Sample Survey Organisation (NSSO), which was 101,724.
- In both surveys, the sample selection method has been broadly the same.
About NSSO survey :
- The National Sample Survey Office (NSSO), formerly called the National Sample Survey Organisation is the largest organisation in India conducting periodic socio-economic surveys.
- It is under the Ministry of Statistics of the Indian government.
- Moreover, it was set up in 1950, the employees of the NSSO are from the Indian Statistical Service (appointed through the UPSC) and the Subordinate Statistical Service (appointed through the Staff Selection Commission).
- The NSSO conducts large-scale sample surveys throughout India. It is headed by a Director General.
Advantage of CMIE survey over NSSO survey
- The CPHS is comprehensive, surveying its entire sample every four months where each survey is a wave.
- The CPHS is also a continuous survey, and so, for example, three waves are completed in a year.
- The CMIE’s CPHS thus has a much larger sample and is conducted at a much higher frequency than the NSSO’s.
- Further, the CPHS is conducted as face-to-face interviews necessarily using GPS-enabled smartphones or tablets.
- Intense validation systems ensure high fidelity of data capture.
Difference between the CPHS and the NSSO surveys
- Firstly, the difference between the CPHS and the NSSO surveys is the reference period of the employment status of a respondent.
- Secondly, While the NSSO tries to capture the status for an entire year and for a week, the CPHS captures the status as on the day of the survey.
- This could be as one of four factors: employed; unemployed willing to work and actively looking for a job; unemployed willing to work but not actively looking for a job, and unemployed but neither willing nor looking for a job.
- Moreover, the recall period in the CPHS is of the day of the survey and the classification is elementary, the CPHS has been able to capture the status fairly accurately with no challenges of the respondent’s ability to recall or interpret the status.
- At last, the NSSO’s system is quite complex.
Key findings in Unemployment report of India:
- India’s labour participation rate is very low by world standards and even this low participation rate fell very sharply after demonetisation.
- The average labour participation rate was 47% during January-October 2016.
- The world average is about 66%.
- Labour participation rate fell after demonetisation
- Immediately after demonetisation in November 2016, India’s labour participation rate fell to 45%;
- Moreover, 2% of the working age population moved out of labour markets.
- Despite , there are lot of people who were willing to work who decided that they did not want to work anymore.
- Unemployed gave up looking for jobs any further, unemployment rate fell
- The data show that it was not the employed who lost jobs and decided to stop working. They mostly retained their jobs.
- It was unemploted lost hope of finding jobs in the aftermath of demonetisation.
- As more and more unemployed left the labour market, the unemployment rate fell.
- This is because the unemployment rate is the ratio of the unemployed to the total labour force.
- India’s female labour participation rate is very low than of men as per CPHS survey .Moreover, the entire brunt of demonetisation was borne by women.
4.Reason for the decline of female labour participation rate :
- Researchers have shown that this fall is because of rising household incomes that reduce the need for women to join the labour force.
- Additionally, increased enrolment in higher education by women which delays their entry into the labour force.
- Moreover, The cultural and security factors that keep women away from the labour market in India.
- Further, it is evident that employers are also biased against hiring women.
- The Goods and Services Tax shock
- After the demonetisation jolt came the Goods and Services Tax shock of July 2017 that drove away small enterprises which could not compete in a tax-compliant environment out of business.
- This caused a substantial loss of jobs.
- Preliminary estimates suggest that employment shrunk by 11 million in 2018.
- The brunt of this was again borne largely by women.
- But men too were also impacted.
- Labour participation rate declined
- Male labour participation rate dropped to 72.4% in 2017 and then to 71.7% in 2018.
- In contrast, female labour participation was as low as 15.5% in 2016 which dropped to 11.9% in 2017 and then 11% in 2018.
- Moreover, Urban female labour participation rates fell faster than rural female participation.
- Meanwhile, In urban India it dropped from 15.2% in 2016 to 10.5% in 2018.
- The corresponding values for rural women were 15.6% and 11.3%, respectively.
- Although female labour participation is substantially much lower than male participation, the few women who venture to get employment find it much more difficult to find jobs than men.
- Finally, The unemployment rate for men was 4.9% in 2018 and that for women in the same year was much higher — 14.9%.
- This higher unemployment rate faced by women in spite of a very low participation rate indicates a bias against employing women.
- Drawing women into the labour force by removing the impediments they face to at least bring their participation levels close to global standards is critically important for India to gain from the demographic dividend opportunity .
- But, This window of opportunity is open only till 2030.
- By not using a good data monitoring machinery, the Indian government is keeping both itself and the citizenry in the dark.