A jobs problem: Labour data in India is lagged and patchy. But supply-demand mismatch is still clear

What is the news?

Recently, GOI unveiled a quarterly report on employment for April-June, which estimates the labour demand of nine handpicked non-farm sectors by surveying establishments with 10 people or more.

What has been the job market trend in India?

India’s economy has been slowing down since 2017-18. Three successive years of dropping GDP growth rate, followed by a contraction last year. Given this context, the big question is what’s happened in the job market?

– As per the latest quarterly report for April-June, though job creation grew by 29% in seven years, but only a million jobs have been added annually over the last seven years.

– The annual PLFS (July 2019-June 2020) shows that there is a shift in employment pattern since 2018 towards agriculture and informality.

– The quarterly PLFS captures only urban trends and the last available one (October-December 2020) confirms the shift away from salaried jobs. The percentage of salaried jobs in October-December 2020 was 48.7%, lower than the 52.7% during the intense lockdown phase of April-June 2020. The unemployment rate of 10.3% in October-December 2020 was higher than the 7.9% of the corresponding period in 2019.

What can be done?

First, step is to start releasing data consistently and also reducing lags. As of now the urban PLFS is released with a lag of nine months and the combined one takes longer.

Second, we need a far bigger industrial manufacturing sector.

The GoI recognises the second solution. It should recognise the first one, too.

Source: This post is based on the article “A jobs problem: Labour data in India is lagged and patchy. But supply-demand mismatch is still clear” published in TOI on 28th Sep 2021.