Amidst a severe jobs crisis as evidenced by anecdotal accounts, stagnant corporate headcount, low wage growth and data from independent agencies such as the Center for Monitoring the Indian Economy (CMIE), the government has recently painted a rosy picture. Tried to make. On January 2, the Union Ministry of Labor issued a press statement, where it cited the Reserve Bank of India’s KIEMS database, to indicate that employment in the country would increase by 36 per cent to 643.3 million between 2014-15 and 2023-24. Done, which compared to 7. % increase in last decade

However, experts have expressed caution. He noted that self-employment and unpaid labor are counted in the figures presented by the government, and raised the issue of its deteriorating quality. jobs. In addition, some have suggested that KLEMS, not being a robust primary data source for employment, figures are only “estimates,” which may be inaccurate.

Certainly, the Labor Ministry’s latest claim of an improving jobs outlook is consistent with a similar assessment from July. Citigroup’s attempt to dismiss a research report that said India Even with a growth rate of 7% will struggle to create enough employment opportunities, the ministry said, citing official data sources such as the Periodic Labor Force Survey, RBI-KLEMS, EPFO et al showed “steady improvement” in key labor market indicators. The government also said that both the Labor Force Participation Rate (LFPR) and the Worker Population Ratio (WPR) are improving, while the unemployment rate has declined over the past five years.

Experts noted that because the KLEMS data does not go into details about where jobs are generated, it does not provide a picture of the quality of jobs.

“The main reason for the decline in unemployment in the last decade is the increase in employment in agriculture in rural areas. Most of these jobs are unpaid family labour,” said Professor P Ramakumar of the Tata Institute of Social Sciences. There is no employment, it is not meaningful, productive employment in any form,” he said.

According to KLEMS data, during the Narendra Modi government, employment in agriculture grew by 19 percent compared to (-)16 percent during the United Progressive Alliance (UPA) regime. In manufacturing, employment grew by 15 percent compared to 6 percent, and in services by 36 percent compared to 25 percent. Agriculture accounts for about 42-43 percent of total employment, and manufacturing accounts for about 9-10 percent.

“A sharp increase in agricultural employment is a sign of distress in the job market. It means, workers are unable to find jobs in other sectors,” said Pranab Sen, former chief statistician. “It also means that productivity per worker in agriculture has fallen dramatically.”

Sen explained that the massive increase in employment over the past decade has been in the “distress category”. “Regular employment has declined, while self-employment has increased, that too in agriculture,” he said.

According to the Periodic Labor Force Survey (PLFS), the percentage of regular wage workers (in the total workforce) declined from 22.8 per cent in 2017-18 to 21.7 per cent in 2023-24. On the other hand, self-employed workers increased from 52.2 percent to 58.4 percent. The first PLFS survey was conducted by the National Sample Survey Office (NSSO) in 2017-18.

Meanwhile, on the KLEMS database, experts and statisticians say it is not an ideal tool for estimating employment in the country, as the RBI does not collect any employment data, but from the PLFS, the annual survey of industries. Makes estimates based on data. (ASI), Annual Survey of Unincorporated Sector Enterprises (ASUSE) etc.

PC Mohanan, former member of the National Statistical Commission, said that the KLEMS estimates are as good as the population numbers used for similar estimates. “The worker population ratio from the PLFS is multiplied with (India’s) population estimates, and then used to estimate employment,” explained Mohanan.

“Population estimates have severe limitations, as the NFHS (National Family health survey) data, the fertility rate has declined, as compared to the assumption they (RBI) made… Given this scenario, the KLEMS estimate is probably not correct. Statistically, it is not a strong source of employment claims,” said Mohanan.

The RBI-KLEMS project started in 2009 as an educational exercise by the RBI. KLEMS stands for Capital (K), Labor (L), Energy (E), Materials (M) and Services (S). It is a framework used for measurement. industry-The level of “total factor productivity” (TFP), which economists consider a measure of the efficiency of all inputs to produce a unit of output.

KLEMS takes employment data from the PLFS, but not as absolute figures on the number of workers. PLFS provides only the share of workers in the population. Thus, to get the number of workers, the WPR is multiplied by the total population, which is where problems arise, as population estimates are based on assumptions, as was the case in the last census exercise in 2011.