No sooner were the results of the 66th Round of the
National Sample Survey Organisation (relating to data
collected in 2009-10) released, than they became the
subject of great controversy. Surprisingly, the controversy
was created not by critics of the government and its
statistical system, but from within government circles!
Some highly placed officials found that the results
of this massively large sample survey - conducted
by one of the most respected governmental statistical
organisations in the developing world - contradicted
their own presumptions about the pattern of growth
of the Indian economy. Instead of therefore questioning
their own priors, they decided that the data must
be wrong, and castigated the NSSO for its faulty investigative
methods (which they had earlier accepted without question).
Others pointed to specific problems with the data
collection in the 66th Round, such as excessive reliance
on outsourced contract investigators, even though
this is not a very new problem, but rather has plagued
the NSSO during several of its recent rounds.
However amusing these official interventions may be,
there is no doubt that the results of the latest large
survey of the NSSO reveal some very important changes
in the labour markets in India, and also in the nature
of the growth process that determines these changes.
They therefore deserve to be taken seriously and analysed
in detail, including by the same policy makers who
otherwise currently choose to be in denial.
The starkest result relates to the slowdown in overall
job creation, which is what has generated the headlines
about ''jobless growth''. The NSS surveys are extremely
inclusive in their definition of economic activity,
trying to capture all kinds of work including self-employed
work, part time work, home based work and so on, and
therefore it is wrong to think that they automatically
exclude work that is outside the formal sector. Even
so they indicate a dramatic deceleration in the rate
of employment generation.
The charts below relate to usual principal status
activity, which is the main activity that people declare
themselves to be engaged in on a usual basis over
the course of the previous year. They also refer to
those above the age of 15 years. The employment numbers
have been derived by applying the participation rates
of the NSSO survey of 2009-10 to interpolated population
figures from Censuses 2001 and 2011.
Chart
1 >> Click
to Enlarge
Chart 1 shows the dramatic deceleration in total employment
growth, from an annual rate of around 2.7 per cent
in the previous five-year period to only 0.8 per cent
in the latest quinquennium. For females, there was
an absolute decline in employment - although it is
certainly true that this may reflect the lack of recognition
of women's work, since the biggest element of the
decline relates to women's self-employment. But even
male employment shows quite a sharp deceleration.
This slowdown in employment generation is evident
across both rural and urban areas, though it was especially
marked in rural India.
Nor should it assumed that the overall slowdown in
employment generation is simply the reslt of less
employment in agriculture, which is after all a typical
feature of a broad process of industrialisation and
development. Rather, as Chart 2 indicates, rates of
increase of non-agricultural employment also fell
sharply, indeed halved, for all workers taken together.
The collapse was sharpest for female workers. But
even for male workers, the slowdown in non-agricultural
job creation was strongly evident.
Chart
2 >> Click
to Enlarge
The
remaining charts provide evidence on absolute numbers
of people, in the 15+ age group, by gender and residence.
These charts include data from the smaller 64th Round
of the NSSO, conducted in 2007-08, which was specifically
devoted to employment. This is useful because it allows
us to check whether the latest round is indeed a significant
outlier, or part of a trend that was already emerging
a few years earlier.
From these charts, a more complex picture emerges,
which clearly needs to be analysed and understood
carefully. It is evident that the latest round really
confirms the trends that were already beginning to
show by 2007-08, for most categories of workers. Therefore
claiming that this round specifically was affected
by data collection problems is not so convincing.
Charts 3 and 4 show the distribution of rural females
and males respectively, over the recent rounds, in
terms of absolute numbers. For rural females, it is
certainly true that self-employment has collapsed,
showing a decline of more than 20 per cent compared
to five years earlier. This is obviously a matter
that needs to be delved into, not in terms of the
adequacy of the investigative methods, but also in
terms of questioning whether the forms of self-employment
that were said to have emerged were really viable
at all.
Chart
3 >> Click
to Enlarge
Chart
4 >> Click
to Enlarge
This question becomes significant because it is clear
that self-employment has also fallen for rural male
workers. In both categories, the increase has been
in casual work. This increase is marginal for rural
women (some of whom are likely to have withdrawn from
the work force) but quite substantial for men in rural
India. Regular employment has been largely stagnant.
The good news is that there has been a substantial
increase in those engaged in education, for both rural
females and rural males. The increase is really quite
significant, around 50 per cent over the five year
period for both males and females, and amounting to
nearly 20 million more young people (above the age
of 15 years) being engaged in education as the principal
activity.
Could this be related to the evident decline in unemployment?
Not really, because it turns out that while unemployment
seems to have fallen both in terms of rates and absolute
numbers, as is evident from the charts, they have
not fallen much for rural males though they have declined
slightly for rural females.
Chart
5 >> Click
to Enlarge
Chart
6 >> Click
to Enlarge
In
urban India, similar trends seem to be at work, as
indicated in Chart 5 and 6. Self-employment has decreased
for both men and women, and in fact the decline is
significantly more for urban men. Regular employment
has increased marginally for both categories. However,
a note of caution is necessary before such a finding
gives rise to even minor celebration. In the previous
large survey round, the largest increase in regular
employment for urban women was in domestic service,
as maid servants and the like, which is not exactly
the most desriable form of work. So obviously, further
investigation is necessary before we can adequately
intepret this trend.
Casual employment for both male and female workers
has increased to a greater extent. Specifically for
the age cohort 25 to 59 years for all India, there
were around 18.2 million more casual workers, compared
to 6.4 million additional regular workers and 4 million
more self-employed. At the same time, unemployment
rates appear to have fallen, especially for this age
group. The decline in unemployment even during a period
of very low aggregate job creation is a paradox that
deserves further examination.
The increase in numbers of those engaged in education
is so substantial that it clearly requires another
look. Chart 7 provides the absolute numbers of increase
of those engaged in education as the principal activity,
for the age cohorts of 15 to 19 years and 20 to 24
years. While the biggest increases are for those presumably
going in for secondary and higher secondary schooling
(in the age group 15 to 19 years) there are also substantial
increases in the older age group, suggesting involvement
in different forms of tertiary education.
Chart
7 >> Click
to Enlarge
This is good news, of course: the citizens of India
deserve to be better educated and the economy desperately
needs a more skilled work force. But it also points
to a concern that should surely exercise our policy
makers, if they can bring themselves to look at a
dataset that they appear to reject at present. According
to these data, there are nearly 30 million more young
people putting themselves through more education in
the hope of being able to access better jobs. The
total numbers of such youth in secondary and tertiary
education is at least 55 million.
Soon, perhaps even within the next five years, these
young people will enter the job market and expect
to access employment that is at least minimally commensurate
with the efforts they have put in to receive more
education. But in the previous five year period, all
forms of employment (regular and casual paid work
as well as self-employment) only increased by around
28 million. If this sluggish pace of job creation
continues, there will be even larger gaps between
aspiration and reality in India's labour markets.
That such a combination is a recipe for enhanced social
tensions and political unrest is well known and has
been reinforced by recent experience across the world.
If only for that reason, surely the government should
sit up to take notice of its own data?
*
This article was originally published in the Business
Line, on July 12, 2011.
