Unemployment Data Based on Draft Report
01, Feb 2019
Prelims level : Economy Mains level : Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
NITI Aayog officials debunk media report of 6.1% Joblessness:
- The government’s think tank NITI Aayog debunked claims that unemployment in 2017-18 was at a 45-year high. The NITI Aayog said the report of the National Sample Survey Office (NSSO), cited as the source for the report, was in fact a draft and not approved by the government.
- According to the NSSO’s periodic labour force survey —the unemployment rate was 6.1% in 2017-18. The only year of comparable data when the unemployment rate was higher was in 1972-73. It was at 2.2% in 2011-12.
- The NSSO report is a matter of much controversy, with the two external members of the National Statistical Commission citing the delay in its release as a major reason for their resignations.
- The data reportedly showed that joblessness was higher in urban India (7.8%) than in rural India (5.3%). Within this, it stood at 17.4% for rural males and 13.6% for rural females. In urban India, joblessness was at 18.7% among males and a huge 27.2% among females.
- Importantly, the data reportedly showed that the labour force participation rate (LFPR), the measure of people working or looking for jobs, declined from 39.5% in 2011-12 to 36.9% in 2017-18. This phenomenon — of unemployment rising while the LFPR dipped — is a cause for serious worry, explaining that it probably shows that people are simply giving up on finding jobs and have stopped seeking work.
- National Sample Survey Office and its Functions
- NSSO recently released data on unemployment in India. It was the 68th round of the Employment and Unemployment Situation among Major Religious Groups in India report.
Key findings of the survey:
- The unemployment rate in urban areas reduced from 4.5% in 2004-05 to 3.4% in 2011-12, the unemployment rate in urban areas reduced from 4.5% in 2004-05 to 3.4% in 2011-12.
- According to the survey, which was conducted in 2011-12, the unemployment rate across all the religious groups in rural areas was on the lower side than those in urban areas for both males and females.
- The most peculiar finding of the survey is that Christians which are supposed to be a better off community have the highest rate of unemployment in both rural (4.5%) and urban (5.9%) areas in 2011-12. The rate in urban areas for Christians stood at (8.6%) in 2004-05 while the rural rate stays constant.
- While the unemployment rate in rural areas has decreased for Sikhs (from 3.5 to 1.3%) – now the lowest across all religious groups – it has slightly increased for Muslims (from 2.3 to 2.6%). At 3.3%, Hindus have the lowest unemployment rate in urban areas.
- Self-employment is the major source of income for almost half the households, across all religious groups, in rural areas, followed by casual labour.
- In urban areas, the proportion of households deriving major income from regular wage or salary earnings is the highest. Half the Muslim households in urban areas have self-employment as major source of income, the highest among all religions, while regular wage or salary earnings was the highest for Christians with 45.8 per cent households.
What does the Survey Indicate?
- The survey confirms the apprehensions shown by many experts that India is facing rural distress. As survey clearly indicates that all religious groups registering an increase in unemployment in rural areas.
- The report states that the unemployment rate is 1.7% in rural and 3.4% in urban areas. In its previous report of 2013, unemployment rate was 1.5% in rural and 4.8% in urban areas.
Why do Christians have largest unemployment rate?
- Unemployment level in India is highest among those people who are richer and more educated. The reason is that poor people can’t afford to stay unemployed, and hence, opt for any kind of work, irrespective of the nature of the job. The better off have the capacity to be unemployed as they look for the right job. Christians are the most educated group, hence unemployment rate is higher among them
- Among the persons of age 15 and above, the proportion of people who are not literates was the lowest for Christians. Also, the proportion of persons with educational level secondary and above is highest for Christians.
- The quinquennial Employment and Unemployment surveys of National sample Survey (NSS) are the primary sources of data on various indicators of labour force at National and State levels. These are used for planning, policy formulation, and decision support and as input for further statistical exercises by various Government organizations, academicians, researchers and scholars. NSS surveys on employment and un-employment with large sample size of households have been conducted quinquennially from 27th. Round (October 1972 – September 1973) of NSS onwards. These surveys provide data on various indicators of labour force at National and State levels
How is unemployment measured in India?
- The National Sample Survey Organization (NSSO) provides three different estimates of employment and unemployment based on different approaches / reference periods used to classify an individual’s activity status. These are the:
- Usual status approach with a reference period of 365 days preceding the date of survey Current weekly status approach with a reference period of 7 days preceding the date of survey. Current daily status with each day of the 7 days preceding date of survey as the reference period.
- In order to find out whether an individual is employed or unemployed it needs to be 1st determined whether h/she belongs to the ‘Labour Force’ or not, which in turn depends on the Activity Status of the individual during the chosen reference period.
- Activity Status refers to the activity situation in which the individual is found during the reference period with respect to his participation in economic or non-economic activities.
- The NSSO defines following 3 broad Activity Status i) Working (engaged in an economic activity) i.e. ‘Employed’ ii) Seeking or available for work i.e. ‘Unemployed’ iii) Neither seeking nor available for work. All those individuals having a broad activity status as i) or ii) above are classified as being in the Labour Force and those having activity status iii) are classified as outside the Labour Force. Thus labour force constitutes of both employed and unemployed. Labor force (also called work force) is the total number of people employed or seeking employment in a country or region. One is classified as ‘not in labour force’, if he or she was engaged in relatively longer period in any one of the non-gainful activities.
- Unemployment rate is the percent of the labor force that is without work.
- Unemployment rate = (Unemployed Workers / Total labor force) X 100
- The NSSO collected employment data based on ‘usual status (UPS)’ only up to its 8 rounds. However, since the beginning of the 27th round (1972-73), quinquennial(5-yearly) surveys were being conducted by NSSO to collect employment-unemployment data based on all the three approaches of UPS, CWS and CDS.