THE confusion over employment data presented in the Economic Survey persists and needs to be cleared up by the government.

The latest Economic Survey released last week indicates that unemployment has decreased slightly, from 6.24pc to 6pc. The decline is very small, but what is surprising is that unemployment should be coming down at a time when the growth rate is a whole three percentage points lower than what it needs to be to minimally absorb new entrants in the labour force.

Some debate around the employment numbers broke out around the Economic Survey announcement, when different figures were circulating regarding this crucial statistic.

Also read: Minister sees no decline in joblessness

One set of figures, leaked from the Planning Commission, showed unemployment rising sharply, while the other, from the Economic Survey, showed it coming down slightly. The finance minister reacted testily to this development, contending that a reconciliation of the two sets of numbers was yet to be undertaken, but insisted that until then the figures in the Economic Survey would stand.

Now another voice in government, the minister for planning, has gone on record to say that unemployment could not have fallen last year because the growth rate was simply not enough to absorb the new entrants in the labour force.

A closer look at the labour force figures given in the Economic Survey reveals a fall in all numbers related to employment.

The Survey shows that for the first time in more than a decade, the total size of the labour force went down, as well as the number of people employed and unemployed. This is a puzzle in the numbers and runs contrary to what intuition would suggest. What is also mystifying is that the finance ministry and Planning Commission are calculating different numbers regarding employment.

Traditionally, it is the job of the Planning Commission to do the analysis on the raw data gathered by the Bureau of Statistics, but this time it seems there are two parallel analyses being carried out, with an aim to eventually ‘reconcile’ their findings at a later time.

So inevitably, there is confusion on whether or not the fall in the unemployment rate shown in the Economic Survey should be taken seriously, and the government’s own planning minister appears to agree.

This confusion ought to be cleared up quickly to pre-empt allegations of data manipulation.

Published in Dawn, June 10th, 2015

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