Who is called Unemployed in India?
When the Budget of the Government of India for the fiscal year 2022-23 was announced, a job crisis was looming in the economy. The overall unemployment rate of India as of 28th January 2022 was 6.7%, for urban India it was 8.3%, and for rural India, it was 6 percent, as per the data published by the Centre for Monitoring the Economy (CMIE).
When we talk about jobs in the economy, usually the term ‘Unemployed or Unemployment’ also comes into play.
What does it mean?
In 1982, the International Labour Organization (ILO) defined the term ‘unemployed’ as all those aged above 15 who (i) had not worked for at least one hour during the previous week, (ii) were available to take up employment within two weeks, and (iii) had actively looked for employment in the previous month.
An unemployed individual is under this definition therefore, not someone without work but without employment. The difference between work and employment is circumscribed by the boundary of what is considered economically productive, the boundary determined by the UN System of National Accounts.
History of Employment Unemployment Data in India
The history of calculation of labour force in India is focused on rural workers post-independence due to agriculture being the primary occupation. Given the complexity of the unorganised sector wherein the majority of India’s labour force can be found, the data collection for the same is challenging and crucial at the same time. Since independence, the methodology of data collection of the labour force which includes unemployment rate has been evolving. The questions in the survey have either directly or implicitly tried to understand the nature of employment and then derived the type of unemployment.
In the first Agricultural Labour Enquiry (1950-51), wage employment for half a day or more was counted as a full day’s occupation and less than that was ignored. All those persons who worked even for a day during the reference period of a month were taken to have been gainfully employed.
In respect of unemployment, firm data were collected only from those adult male labourers who reported wage paid employment each month. Thus, for those labourers who did not report wage-paid employment, it was assumed that they were self-employed for that period.
In the second Agricultural Labour Enquiry (1956-57), the time spent approach was adopted by recording the number of days spent on different economic activities in which the members of the household were engaged during a reference period of one week. The scope of the third Enquiry (1963-65) was widened to cover rural labour households instead of agricultural labour households alone covered in previous enquiries and renamed as Rural Labour Enquiry.
To reduce the gap between two successive enquiries, the third Rural Labour Enquiry (1977-78) and all other subsequent enquiries have been integrated with the general ‘Employment & Unemployment’ surveys of the National Statistical Survey which are conducted on a quinquennial basis.
The 1983 Survey (fourth RLE) methodology was kept as a ‘no change model’ retaining the same conceptual framework. This was done to maintain comparability between two rounds. The 1987-88 survey, while making no change in the existing conceptual framework, made some alterations in the sample design in order to cover more households belonging to higher income groups.
In NSSO 50th Round (1993-94), daily disposition data were collected for all persons surveyed and Current Weekly Status (CWS) was determined on the basis of this time disposition data.
For finalising the survey methodology and schedules of enquiry of the 55th round (1999-2000), a working group was set up. Certain questions to identify employment in the unincorporated enterprises, migration, females in the households, children, and monthly per capita consumption expenditure were added.
In the eighth quinquennial survey on employment and unemployment which was integrated with the 61st round (July 2004 – June 2005) of NSS, apart from the information usually collected in the quinquennial rounds, information on some new items was collected. In the 61st round survey, an attempt has been made to assess the quality of self-employment in terms of earnings through certain probing questions. Information on ‘period of seeking/availability for work during the last 365 days’ has been collected for all the persons of age 5 years and above. In the earlier quinquennial rounds, this information was collected only for those who were unemployed in the usual principal status (activity status of 365 days preceding the survey).
In the 62nd round (July 2005 – June 2006), households’ engagement in different public works programmes aimed at generating employment was captured. As per this round, people who were available for work but were not able to find it were considered as unemployed.
The major features of data collected in NSS 66th and 68th rounds were the same. The activity participation of the people is not only dynamic but also multidimensional – it varies over regions, age, education, gender, industry and occupational categories.
Considering the importance of availability of labour force data at more frequent time intervals, the National Statistical Office launched the Periodic Labour Force Survey (PLFS) in April 2017 which continues till today. The unemployment rate is defined as the percentage of persons unemployed among persons in the labour force.
Indian Definition of Unemployed
The Labour Bureau of India undertakes this survey on ‘Employment and Unemployment in India’ annually. The survey categorises a person into either of the three activity categories:
- working or being engaged in ‘economic activity’.
- not working, but making tangible efforts to seek ‘work’ or being available for ‘work’ if ‘work’ is available.
- being not engaged in any economic activity (work) and also not available for ‘work’.
Based on these activity categories, the survey determines the labour force and the workforce. The labour force comprises all those persons who were either, ‘working’ and those who were ‘seeking or available for work’, while the workforce comprises only the ones that are working or seek to work.
Whereas, the unemployment rate is calculated as the proportion of persons who are not working, but are actively seeking a job. This kind of worker can be termed involuntary unemployed as they want a job but are unable to find one. There will be another category of unemployed persons such as not working and neither actively looking for a job that will be termed as voluntary unemployment.