NITI Ayog expresses serious reservations over unemployment data of J&K, questions methodology

JAMMU: NITI Ayog has expressed serious reservations over unemployment data which government of Jammu and Kashmir has shared with it.

Sources said that the Ayog has questioned the methodology adopted for finding out the number of unemployed in the state. It has said that the manner in which data is collected is erroneous and it does not reveal the real picture but gives just an insight into the problem of unemployment which the state as well as whole country has been battling.? No policy or programme will be successful in reducing unemployment if the reliance is on the data presently available with the states.

Ayog has strongly recommended that 6the surveys conducted both by state?s own Directorate of Economics and Statistics (DOES) and the central National Social Survey Organisation (NSSO). It has said that these surveys should be replaced with annual enterprise survey using enterprises registered with the Goods and Services Tax Network (GSTN) as the sample frame. Samples drawn from GSTN will have the virtue of covering enterprises of all sizes except those with turnover below Rs. 20 lakh and from industry as well as services sectors.

Ayog has said that since the GSTN would get updated on a continuous basis, it would provide a fully updated sample frame at all times. It has further advised the state government that since GSTN will not adequately cover own-account and other small enterprises which employ large proportion of the workforce; there remains need for Economic Census at regular intervals. For Economic Census to be relevant, Ayog has advised that the frequency should be increased to once every three years.

Ayog has held out that the in addition to providing a full picture of the workforce structure by enterprise size and sector classification, such a survey will also provide sample frame for periodic survey of enterprises of all sizes across all sectors. It has stressed that subset of enterprises in Annual Enterprise Survey using GSTN as sample frame should be regularly tracked. Ayog has said that it will lead to the generation of monthly or quarterly enterprise based employment estimates.

Ayog has strongly recommended that labour department of the state should be tasked with undertaking this survey at the earliest.? Administrative data from a number of sources can be potentially exploited to collect data on certain category of workers. Among these sources, employee Provident Fund Organization (EPFO) database, which contain information on employees for whom employers make contributions towards provident fund. In addition, there are several privately sponsored provident funds, whose databases can complement the EPFO database.

Employee State Insurance (ESI) database includes data on government employees receiving medical insurance. Similar datasets exist for private employees covered by privately-run-insurance companies across the country. National Pension Scheme (NPS) database contains information on government employees enrolled in the scheme. In parallel, there exist private insurance schemes containing similar information and that too exhaustive one. These sources would help in increasing relevance of unemployment surveys.

Administrative data can only be used to measure the extent of formalization in the workforce. But even this requires adopting a new definition of formal workers. After considering various alternatives, Ayog concluded that it was desirable to adopt a new, more pragmatic definition of formal workers. Accordingly, it recommended that at least for purpose of counting, workers covered under Employees? State Insurance Act, Employees? Provident Funds and Miscellaneous Provision Act, government and other public sector employees, workers having coverage under private insurance or pension schemes or provident funds and workers subject to tax deduction at source on their income through submission of Form 16 or similar Income Tax form.

Significant employment generation also takes place as a direct result of public investment in infrastructure and expenditure on government schemes. Loans extended to enterprises under special schemes also result in job creation. These public investments, expenditures and loans can serve as important sources of measuring job creation.

Directorate of Economics and Statistics (DOES) should carry out systematic survey of individuals or enterprises that have availed MUDRA loans. With banks providing details on these borrowers, it is a straightforward matter to quickly complete such as a survey, Ayog has recommended. It has further recommended that state?s DOES should work with Union Ministry of Statistics and Programme Implementation (MoSPI), Union Ministry of Labour and Employment (MoLE) and other central ministries for collecting employment data work together to eliminate duplication and overlaps. It is also important that in writing their survey reports, all the departments clearly spell out limitations of their estimates. The reports must also explain the relationship among different surveys and explain why they are or are not comparable.