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Issue:January' 2018


Assault on institutions reaches nadir

G. Srinivasan

P.C.Mohanan and J.V.Meenaksh Overt assault on timehonoured institutions has become the hallmark of the outgoing Modi Sarkar
The acme of emasculation of institutions reached its nadir when the residual two non-official members of the National Statistical Commisson (NSC) put in their papers on January 28, 2019 following the earlier resignations of two other members, including the acting head P.C.Mohanan, a career statistician and J.V.Meenakshi ,early this year. The bone of contention behind this spate of resignation, centered on the government’s apparent objection to release a report using the Periodic Labour Force Survey (PLFS) in December, 2018 highlighting the huge decline in employment or loss of job, particularly post-demonetization.

Other unstated but obvious reasons for such an act of abnegation from the duly constituted official body members might also be pertaining to squeamishness about the earlier release of the back-series data on the economy, particularly the gross domestic product (GSDP) number, which logged laggard growth during the UPA-led government‘s tenure and were released by the NITI Aayog circumventing convention and the NSC’s views.

In fact, Radha Binod Barman, who chaired the NSC between 2016 and 2018 before Mohannan took acting charge in November last, said the NSC ought to have been the final authority on whether to release the jobs report. This is presumably so as the NSC is the professionally competent organization, unlike the Niti Aayog which is a political institution for designing policy for governance.

The bone of contention behind the spate of resignation, making the NSC well-nigh a dysfunctional entity, centred on the government’s apparent objection to release a report using the Periodic Labour Force Survey (PLFS) in December, 2018- highlighting the huge decline in employment, particularly post-demonetization

To make the displeasure of the NSC members perspicuous, it needs to be stated that a discernible but disturbing feature was detected on the quality of the current 2011-12 base GDP series released on January 31, 2018 when the earlier GDP growth estimate of seven per cent for 2016-17 was revised upwards to an incredible 8.2 per cent. This was done despite the muchvaunted commentary on how the demonetization took the mojo out of the entrepreneurial élan of the real sectors in the economy!

Reports leaked by a pink business daily suggest that the findings of the new PLFS for July 2017-December 2018 are none too comfortable to the incumbent government with unemployment logging a five-decade peak of 6.1 per cent.

It needs to be noted that the National Sample Survey Organization (NSSO) set of PLFS in 2017 is a regular and continuing survey meant to pan out annual estimates on labor force on employment and unemployment along with quarterly estimates for the urban areas on a fast frequency and holistic manner, according to the Minister of State (Independent Charge) for Labor and Employment Mr. Santosh Kumar Gangwar in a written response in Lok Sabha on February 11, 2019.

Atal Bihari Vajpaye A mention needs to be made that the NSSO wound up its survey for 2017-18 (the first since 2011-12), now re-christened the PLFS in June last year. The significance of the NSSO can be gauged from the fact that by far it is the largest survey undertaking body anywhere in the world and it was set up in the 1950s when no other country had ever contemplated for such a sample survey. While many nations and global agencies followed the NSSO methodology, noble laureate Angus Deaton had done pioneering research work in inequality and poverty openly admired and benefitted by the NSSO figures.
If the data gleaned and processed by the NSSO remain anathema and hence execrable, one need to recall that it was at the initiative of the BJP’s statesman Prime Minister Atal Bihari Vajpayee who commissioned the former RBI governor and eminent economist Dr. C. Rangarajan to revamp the country’s rickety statistical bedrock. Dr.Rangarajan came out with two sensible suggestions way back in 2001.

C. Rangaraja One was the need to establish the NSC for ensuring credible data not only for national governments but also for multilateral bodies for intercountry comparisons as well as for investment decisions by private corporate. The second suggestion was the creation of a designation called the Chief Statistician of India (CSI), heading the Central Statistical Office by a professional and not a career bureaucrat. Incidentally, the NSC is the apex body for all statistical matters with a comprehensive remit so that its ability to generate data with independent oversight is seldom in doubt for ensuring data credibility and reliability from the outset.
But to cast dark doubts on the data collection machinery of the NSC/NSSO by the incumbent government just because the data on jejune job creation is inconvenient at a time when a renewal of mandate is being sought is plumb wrong, wonks wryly say.

To make the existing members of the NSC uneasy efforts were made to the effect that the report was only a draft and the ultimate approval was to be given by the government.

Santosh Kumar Gangwar Mohanan was on record that one of the reasons why he and another member resigned was the non-release of a survey report made by the NSSO and approved by the commission to be released in December 2018. The release date was decided in concert with the NSSO almost a year ago. While the NSSO spawns three to four reports a year and these are routinely approved by the commission and released by them subsequently, the “special attention” lavished on this particular report by the line ministry (Labuor) was possibly because it implicitly impugned some of the audacious claims of the government post-demonetization and the inept rollout of the Goods and Services Tax(GST) in July 2017 and the associated anguish and dislocation it wrought to trade and industry, most of them in the informal and unorganized sector.

As per the leaked version of the socalled “draft report” as derisively dismissed by the mandarins in the Niti Aayog, the employment situation in the country is but morose and not rosy. Besides a tripling of the observed unemployment rate to 6.1 per cent, it also revealed very sharp spurts in the unemployment rate among the youthful (aged 15-29) to levels ranging from 13.6 per cent for rural females to 27.2 per cent for urban females; and significant declines in the labor force participation rates for all sections down to 23 per cent for females and a stark 16 per cent for female youth, reflecting the rueful state of women empowerment. Interestingly this set of appalling numbers also found its ricocheting reflection in the recent household surveys made by the CMIE.

To make the existing members of the NSC uneasy and unpleasant for no fault of their own other than revealing the facts to speak for themselves, efforts were made to the effect that the report was only a draft and the ultimate approval was to be given by the government. Besides, a series of posers on the methodology were also red-flagged and these emanate from Niti Aayog and not from the Chief Statistician of India (CSI) whose job is to uphold the veracity of the official facts and figures literally. It is rather ironical that the report which was based on a new series of surveys on employment after a hiatus of six years had to be junked sans ceremony!

Professor and Center Director, NCAER(National Council of Applied Economic Research)-National Data Innovation Centre, Sonalde Desai quoting the leaked report’s claim that more than half of the population is out of labor force said that what the statistics showed was that the trend is dominated by women and the rural populace. She said that if the full report were available, it would be rural women who would drive the employment story, which is very much akin to a continuation of the trend between 2001-02 and 2011-12 documented by the NSSO under a different earlier government (read UPA)!

Whatever conclusion one draws based on the interpretations of the experts with domain knowledge on the subject, the fact remains that the paucity and undependability of official data and even where they exist they get smothered or released after due dress-up by the authorities with an explicit view to purveying positive flow of information to the public is but pathetic. This erodes the very veracity and credibility of official figures.

As such, it is small wonder this has given rise to a plenty of nongovernment data sources in the social sector like education and public health akin to Centre for Monitoring Indian Economy (CMIE) for industry and employment data. In fact, CMIE kicked up a shindy among the authorities by stating that immediately after demonetization in November 2016, India’s labor participation rate fell to 45 per cent; 2 per cent of the working population , i.e., about 13 million, moved out of the labor markets. It further averred that after demonetization thunder came the GST shock of Jul 2017 that drove away small enterprises out of business, causing substantial loss of jobs.

India’s labour participation rate fell to 45 per cent; 2 per cent of the working population , i.e., about 13 million, moved out of the labor markets. The GST shock of Jul 2017 drove small enterprises out of business, causing substantial loss of jobs.

Preliminary estimates suggest that employment shrunk by 11 million in 2018. It may be recalled that the NSSO’s quinquennial(five-year) employment surveys were to be held in 2016-17. But faced with the twin troubles of demonetization and the abrupt rollout of the GST in 2016 and 2017 respectively which wrought havoc on employment situation in the country, the year was switched to 2017-18 in the garb of preparing a new Labor Force Survey to replace it! Separately, a quarterly survey of select employment- intensive sectors set off by the Labor Bureau after the 2008 global financial meltdown, that gave some clarity on ground realities, was inexplicably jettisoned. Instead proxy data from enrolments into social security schemes for formal sector employees are being bandied about as a mark of job-creation, which economists of plausible cerebral power, dismissed as them for all their worth!

Ultimately, the NDA-II did not conceal its aversion for the unattractive underbellies of ugly tidings particularly when it is confronted with a new lease of life on the strength of its past assurance of acche din for all and development for all. But the least it would have done to save its credentials as a party with a difference is to abide by institutional values and not to queer the pitch by fostering parallel official bodies of its own liking to make a mockery of revered and venerable ones that had stood the test of time and served the nation well with warts and all and mostly all!

The author is a former Deputy
Editor, the Hindu Group and a
freelance economic journalist.