Government cites EPFO data to counter joblessness debate

Ravi Dutta Mishra & Subhash Narayan

Mumbai, April 25 (IANS) While rising unemployment has become a weak link for the Modi government fighting for a comeback to power at the Centre, a government agency has come out with fresh evidence that employment is not only being created across sectors but is also rising at break-neck speed amidst a growing economy.

The fresh numbers comes at a time when a report citing the National Sample Survey Office's (NSSO) revealed that unemployment in the country was at a 45-year-high of 6.1 per cent in 2017-18. The publication of this data has been withheld by the government.

The Central Statistical Organisation (CSO) under the Ministry of Statistics and Programme Implementation (MoSPI) on Thursday came out with its latest assessment of employment that shows in 18 month period between September 2017 and February 2019, over 2 crore jobs were created in the country.

The data, however, represents growth only in the formal sector where economists already believe that situation is better. It is also based on data of new subscribers joining the Employees Provident Fund Organisation (EPFO) that does not provide the overall picture on employment.

The real stress lies in the informal sector, where new jobs have not been created, rather millions lost their employment following the demonetization exercise.

"There is a potential of double counting when employment rate is calculated based on EPFO subscription. You can't assume that each of these is completely independent of each other. The problem would have been solved had each of these been linked to the Aadhaar," former chief statistician of India Pronab Sen told IANS.

"The data only points to growth in the organised sector. We already know that the formal sector is growing. The problem is in the informal sector, which is going through massive unemployment," Sen said.

The CSO data shows that between September 2017 and February 2019, in all 2,12,33,663 new subscribers were added to the EPFO fold. As EPFO subscription starts only on employment in the formal sector, CSO has taken the numbers to represent fresh additions to country's workforce. But it has also added a caveat, that the "present report gives different perspectives on the levels of employment in the formal sector and does not measure employment at a holistic level".

The CSO based its employment assessment based on the number of new subscribers entering three major schemes: the Employees' Provident Fund (EPF) Scheme, the Employees' State Insurance (ESI) Scheme and the National Pension Scheme (NPS).

The organization has come with similar statistics in the past too to represent employment numbers. But in the absence of any other credible official data source presenting a complete picture of the country's employment scenario, this has become one of the yardstick to show numbers being added to countrys workforce.

After a long gap, the NSSO came out with unemployment numbers last year. A leaked copy of the report became big embarrassment for the government as it showed that unemployment in the country last year (FY18) was at a 45-year-high of 6.1 per cent.

Several experts have also expressed doubt over the unemployment, growth rate figures and have alleged that the government was suppressing uncomfortable data.

Explaining one such point of contention, R. Nagaraj of the Indira Gandhi Institute of Development Research had told IANS that as the employment rate has fallen, one would also expect output growth to have decreased, unless there is a huge rise in productivity per worker for which there is no evidence.

"So, the rising GDP and declining employment rate for the same year seems anomalous," he said.

Nagaraj, alongside several economists, in a statement released earlier this month, questioned the government's intent behind the Gross Domestic Product (GDP) methodology revision and called for the restoration of independence of statistical bodies in light of the allegations that government was suppressing uncomfortable data.

(Ravi Dutta Mishra can be contacted at ravidutta.m@ians.in and Subhash Narayan at subhash.n@ians.in)