The Many Questions Arising From QES Data

Context: Release of the first Quarterly Employment survey (QES) raises more questions than answers.

• Policy gap: India ratified International Labour Organization’s Employment Policy Convention, 1964, which requires ratifying countries to implement “an active policy designed to promote full, productive and freely chosen employment.” India does not have one till now.
  • QES survey not considering overlaps between registrations (factories or shops registering under more than one law) & considering tax laws (Factory Act, Shops Act etc) than labour laws while collecting data on formalization.
• Scope for external influences: QES survey projects a rosy picture of economy and labour market with a simple growth rate of 29% in employment in 2021 over 2013-14.
• Statistical gimmick: QES provides very broad employment figures of “3 crores and 8 lakhs approximately” in FQ-2021 against a total of 2 crores and 37 lakhs in 2013-14.
  • Low real growth numbers: The compound annual growth rate (CAGR), a far more reliable indicator of growth rates spanning several years, remained in the range of 3-4%.
• Mismatch raising questions over credibility: Positive indicators in QES survey is not substantiated with other data such as
  • CMIE data in April, 2021, revealed that salaried class shed an estimated 3.4. million jobs from the level in March 2021 and the urban unemployment rate was as high as 9.78%
  • Provisional estimates of annual national income for 2020-21 showed contraction in manufacturing (-7.2%), construction (-8.6%) and trade (-18.2%), which are some sectors covered in QES.
  • Real national income growth rates declined 2017-18 onwards: Annual average growth rate in 2013-14 to 2020-21 was 4.95%.
• Pandemic impact not captured: During pandemic, smaller establishments suffered much more than bigger industries as they faced challenges concerning debt repayment, wage and statutory dues.
  • QES says contract workers accounted just 7.8%, which is plausible as given low employment demand and cost-minimising by manufacturers.
  • No collection of data on differential impact of the pandemic on caste and religion.
• Claims by employers presented as reliable data: Two QES data raises critical questions
  • 87.5% of estimated workers were regular workers and just about 2.1% (12.5% in construction) were casual workers.
  • 66-86% of estimated employees received full wages including in construction, trade and hospitality industries.
• Wastage of resources: As Labour Bureau initiated five segmented employment surveys when it could have put in place a high-frequency labour market information base like most advanced economies.