Statistical jugglery by Modi govt conceals worsening unemployment crisis in the country
We must not rely on ‘usual status’ of Periodic Labour Force Survey data but should consider the ‘current status’ on the ground to mitigate the miseries of the jobless, who are under great distress
The Periodic Labour Force Survey (PLFS) has just come out, following which the government and its supporters have been telling the country that both the Labour Force Participation Rate (LFPR) and the unemployment rate had been improving for the last three years.
But the government has obviously resorted to political jugglery without considering the worsening reality on the ground on the one hand, and without understanding the statistics on the other which conceal more than they reveal. The data must not be allowed to cover-up the crisis of joblessness that the country is reeling under.
We must understand both the critics and the government to reach a worthy conclusion. The government data says that the labour participation in the country in 2017-18 was 36.9 per cent and unemployment rate was 6.1 per cent. One should recall that the report for the year had created a great controversy in the country, because Modi government had tried to suppress it, and one of the members on the panel had resigned in protest.
The leaked report claimed that unemployment in the country had gone to a 45 year high, which the Modi government had denied because it had come just before Lok Sabha Elections 2019. However, after the election was over, the government had accepted the figures. Therefore, there is no denying the fact that unemployment rate had been worsening in Modi Raj.
It was the first report under the new system of assessment. The government had then made some structural changes in the NSSO. Since then, NSSO has been conducting the survey.
The survey for 2018-19 showed improvement in LFPR to 37.5 per cent, which further rose to 40.1 per cent in 2019-20. During this period, it also showed improvement in unemployment rate which fell from 6.1 per cent to 5.8 per cent in 2018-19 and 4.8 per cent in 2019-20.
Critics have been saying something different. They say that unemployment had been worsening even before the pandemic struck the country, which further worsened the LFPR and the unemployment rate. They question how can unemployment rate improve when the economy of the country was undergoing a historical fall, and the rate of growth in 2019-20 tumbled down to only 4.2 per cent.
The critics thus suspect the data itself, its modes of collection, and the analysis on yearly basis. They seem to have a point.
The data the Modi government is quoting is the ‘usual status’ of the employment scenarios in the country on yearly basis. Now dive deep into the PLFS data to clear the picture. The ‘current status’, which is quite different, is collected and analysed on weekly basis. During July – September, 2019, LFPR was 36.8 per cent which slightly improved to 37.2 and 37.5 in the next two quarters, but fell sharply in the last quarter April-June 2020 to 35.9 per cent about 0.9 per cent even below the first quarter.
Unemployment rates during these quarters were 8.4, 7.9, 9.1, and 20.9 per cent respectively, which shows the deterioration in unemployment situation.
Youth unemployment rates for 15-19 years old were far worse in all the four quarters of the year under survey, at 20.6, 19.2, 21.1, and 34.7 per cent respectively. That was the real position on ground when the pandemic struck the country. It was the ‘current status’ which has been concealed under the ‘usual status’ that the government is quoting.
Thus, the ‘current status’ of unemployment and the labour force participation rate has suddenly deteriorated even going by the PLFS survey.
The country was put under lockdown on March 24, 2020, and during January-March 2020, LFPR was 37.5, unemployment rate was 9.1, and youth unemployment rate was 21.1 per cent. When we look only at the ‘usual status’ data, it conceals the ‘current status’ of the ground reality.
The ‘current status’ data shows that India's unemployment rate stood at 23.5% in May 2020. Thereafter, it had been fluctuating on a month on month basis until January 2021. It means that in one month, people were getting employed and the next month they ended up losing it.
From the beginning of 2021, it has worsened. The unemployment rate in January was 6.52 per cent, which rose to 7.97 per cent in April, and 8.2 per cent on May 9, according to CMIE data. In May 2021, the unemployment rate was 11.9 per cent, in June 9.17 per cent, and on July 23 it was 7.26 per cent. Urban unemployment was higher at 8.39 per cent as against the rural unemployment at 6.74 per cent as on July 23.
As for the labour force participation rate, according to the ‘current status’ assessed by CMIE, it was 42.9 per cent in October 2019, which fell by 7.08 per cent in April 2020. It was 40.66 per cent in October 2020, and 36.79 per cent in April 2021 which was four months low since January 2021.
We had lost 7.35 million jobs in April, and had only 390 million people in job, ie only about one third of the requirement. Total loss of jobs in April-May 2021 was 22.7 million. LFPR stood at 39.6 per cent in the week ended June 27, 2021, which is much lower than even the average LFPR of 42.7 per cent of 2019-20 according to CMIE data.
It is indeed alarming that employment between July 2020 and March 2021 was close to 38 per cent, which fell to 36.8 per cent in April, and 35.3 per cent in May 2021. It recovered a little to 36 per cent in June 2021.
The ground reality is thus too worrying to be ignored. We must not rely on the ‘usual status’ of the PLFS data, but should consider the ‘current status’ on the ground to mitigate the miseries of the jobless, who are under great distress, and many of whom are even dying by suicide.
Views are personal