Questions arising from QES data

What is the issue?

The Labour Bureau’s All-India Quarterly Establishment-based Employment Survey (QES) for the first quarter of 2021 (April to June) throws up some perplexing numbers raising suspicions on reliability.

What is the survey about?

• The objective of the QES is to enable the government to frame a “sound national policy on employment”.
• It covers establishments employing 10 or more workers in the organised segment in 9 sectors - manufacturing, construction, trade, transport, education, health, accommodation and restaurants, IT/BPO, and financial services.
• These sectors account for 85% of the total employment in establishments employing 10 or more workers as per Sixth Economic Census which serves as the basis of QES survey.
• The QES has reported a simple growth rate of 29% in employment in FQ2021 over 2013-14.

What are the other surveys regarding employment?

• While the QES provides a demand side picture, Periodic Labour Force Survey (PLFS) gives the supply side picture of the labour market.

• The release of the PLFS results in 2019 showed the highest-ever unemployment rate of 6.1%.
• CMIE data has been projecting a distressed labour market scenario especially during the pandemic.

PLFS is released by National Sample Survey Office (NSSO) under MoSPI to generate estimates of various labour force indicators.

What cautions were raised from QES data?

• Limited coverage - establishments with ten or more workers account for a mere 1.66% as per the Sixth Economic Census.

• Also, a disproportionately 81.3% of workers are in unorganised sector as per the PLFS data.
• Employment growth despite economic slowdown - The QES provides very broad employment figures — 3 .8 crores approximately in FQ-2021.
• But CMIE data revealed a discouraging picture in April where salaried class shed around 3.4. million jobs compared to March 2021 and the urban unemployment rate was as high as 9.78%.
• The real national income growth rates also declined from 2017-18 onwards.
• Credibility of statistics – QES reports that 87.5% of the estimated workers were regular workers and just about 2.1% were casual workers.
• Also it mentions that 66-86% of estimated employees received full wages in contrary to other reports including those by the Central government.
• Overlaps between the registrations – AES says that contract workers accounted for overall 7.8% .
• But Annual Survey of Industries for 2017-18 mentions that 36.37% of the total workers are employed in the organised factory sector.
• Methodological shortcomings - An outdated sample frame, non-comparability of employment numbers from EC-2013 with QES and differences in methods used for gathering information adds to unreliability.

What can be inferred from the survey?

• It would have been more prudent to await the release of a newly updated frame in the EC-2020 and then canvass for the QES.

• F12021 QES must be considered as a starting point of the new data set rather than as a continuum of the Sixth EC.
• The Labour Bureau could have put a high-frequency labour market information base like most advanced economies.

Source: The Hindu

Quick facts

Economic Census

• Economic Census is the complete count of all establishment located within the geographical boundary of India.

• It is conducted by the Union Ministry of Statistics and Program Implementation (MoSPI).
• The first Economic Census was undertaken in 1977.
• The last one was Seventh Economic Census, conducted in 2019 by MoSPI partnering with CSC e-Governance Services India Limited, a Special Purpose Vehicle under Ministry of Electronics and Information Technology.