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Employment in India has registered a robust V-shaped recovery after being adversely impacted between April and June 2020 during the Covid-19 induced lockdown and in April-June 2021 during the second wave of the pandemic, Krishnamurthy V Subramanian, former chief economic advisor to the Centre, said in a paper on Friday.
Subramanian is now serving as the executive director of the International Monetary Fund (IMF).
Using the official survey data of the National Sample Survey Organization (NSSO) to document the facts on employment in India, the paper titled “Employment in India: Data Sources, Facts, and Trends” showed that both the worker-population ratio (WPR) and labour force participation rate (LFPR) are higher while the unemployment rate (UR) is lower in October-December 2022 than the subsequent quarter in 2019.
“The full recovery has manifested for both male and female workers. Unlike male workers, the recovery for females did not manifest immediately in a V-shaped manner but took a longer time. This is consistent with women being primary caretakers during a health shock in the family. Nevertheless, female employment has grown consistently over the period from 2018-19 (FY19) to FY21,” the paper read.
Further, the paper also provided evidence of the increasing formalisation of the labour force. The number of workers in the formal sector stood at 60 million in FY21, which is 11 per cent or 6.2 million higher than in FY19.
Similarly, in the organised sector, the total number of workers estimated in FY21 stood at 98.9 million, 4.3 million higher than the pre-pandemic year. The share of formal workers grew by 9.3 per cent in the organised sector. On the other hand, the share of informal workers decreased by 0.8 per cent during this period.
The number of workers in the unorganised sector in FY22 fell as compared to FY21 owing to the decrease in workers in the formal and informal sectors of the sector. The paper credited this to the Centre’s special measures to improve the social security net of the workers during the pandemic.
Besides, the paper also examined the survey methodologies of various sources of data on the labour market in the country including the private data generated by the Center for Monitoring the Indian Economy (CMIE). The paper called to cease the use of CMIE data on employment in India till the flaws in its survey methodology are fixed.
“The use of current daily status (CDS) by the CMIE data leads to the problems in objective definition of employment. Unlike CMIE, PLFS reflects the diversity in employment in India as the CMIE data fails to capture intermittent employment. Also, CMIE is unlikely to capture employment in the Gig economy comprehensively. [Thus] we arrive at the indisputable conclusion that CMIE employment data is unreliable. Given the timely availability of official NSSO data now, the use of CMIE data to infer employment in India must stop till the flaws in their survey methodology are fixed,” the paper said.
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