Quarterly labour market surveys will help policymakers,as long as they are reliable.
THERE is a plan in the pipeline for the ministries of labour and statistics to join hands to produce a quarterly,pan-India survey of the labour market. This would hopefully generate reliable employment and wage statistics at regular intervals. Currently,the two sources of dependable labour market data are the National Sample Survey Organisation (NSSO) and the Labour Bureau. The NSSO conducts its survey once every five years,and also releases a quick thin sample survey annually though this is less reliable. The Labour Bureau has been conducting a quarterly survey of eight largely export-sensitive sectors ever since the financial crisis of 2008-09.
The unavailability of critical statistics at more regular intervals is a serious problem. Job market data helps policymakers take informed decisions. For instance,the Fed is monitoring the monthly US labour market data to help it decide when to start tapering its bond-purchase stimulus. Equally,data on wages and unemployment important for analysing GDP growth and the business cycle is key to evaluating the success of policy interventions. Access to sound and up-to-date statistics,therefore,refines policy and gives it the feedback necessary to craft a quick response. The quality of political debate also stands to gain enormously from such access.
In India,due to the large informal sector,and the high proportion of self-employed individuals and small-scale production,collecting accurate data is challenging. Regardless,this must be done. The damage that can be caused by unreliable data,that then has to be frequently updated is evident. Arguably,the reason why inflation is so entrenched in the economy is because the RBI had based its earlier policy on a growth rate of 8.4 per cent for 2010-11,which was later updated to 9.3 per cent. Crucially,with nearly 13 million young people added to the labour force each year,these are numbers the political class should want to watch.