The recently released data by the Periodic Labour Force Survey (PDLS) indicates a fall in the unemployment rate in India, with an increase in Labour Force Participation Ratio (LFPR) between 2017-18 and 2019-20.
This decline in unemployment during the years when the economy slipped drastically, raises questions about the ‘growth’ that the government is showing.
While the numbers on the headlines might be positive, the detailed report of 721 pages paints a disturbing picture.
The 2019-20 survey, estimating the distress in the labor market, after which the nationwide lockdown was imposed as the coronavirus pandemic broke out in the country.
Despite the economic fall induced by the pandemic, the data show a decline in the unemployment rate down to 4.8 percent in 2019-20.
This is the lowest in three years as the unemployment rate went down to 5.8 percent in 2018-19 from 6.1 percent in 2017-18.
The parallel increase in labor participation from 37.5 percent to 40.1 percent in 2019-20 is disconcerting.
The methods used to calculate the Unemployment Rate (UR), Worker-Population Ratio (WPR), and the Labour Force Participation ratio vary from usual status and current weekly status.
For analyzing the individual’s employment activity over the last 365 days, the usual status method is used. While considering the activity performed over a week’s period, the current weekly status is used.
Now, the Labour force is defined very broadly by the system as it includes anyone who supplies or offers to supply labor for the production of goods and services.
The umbrella term includes both the employed as well as the unemployed population under the terms and conditions.
As one looks deeper into the report, it is clear that the increase in unpaid family helpers has been tremendous since the economic standstill.
With a larger portion of the unemployed moving towards agriculture, the help they are getting is from the family members who are not paid.
The own-account workers’ category of the PLFS is those who manage small enterprises with no paid labor.
The discrepancies in the analysis can be deduced from the fact that even though the survey for the assessment of agricultural households was conducted before the recently released PLFS, the report has not been released yet.
Without the data on consumer expenditure, which was earlier collected by the National Sample Survey Employment and Unemployment surveys, there is no credibility to the PLFS report on agriculture households.