Himanshu: India’s economy is too complex to afford less-than-robust statistics

India’s statistical system had come under criticism for denying or delaying access to survey data. We have seen delays in updating the base year for key variables like the Consumer Price Index (CPI) and National Accounts, both of which have a base which is more than a decade old.

Improved survey coverage and data-release frequency would help generate confidence in our statistical system. But it is also essential for statistics to serve as inputs for economic analysis and policy formulation. Regular base-year updates for many macro variables are necessary, given the economy’s dynamism.

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The NSO has expanded the coverage of its annual Periodic Labour Force Surveys (PLFS) and also increased the frequency of data releases from quarterly to monthly, starting with April 2025. Going monthly has meant that the NSO had to increase the PLFS sample size by 2.65 times to 272,304 households, together with changes in sampling design for the generation of monthly estimates. A larger sample also lets the NSO release quarterly estimates for rural areas (done only for urban areas so far). 

PLFS data has been a valuable tool to track trends and patterns in India’s workforce structure since 2017-18. Along with their precursor Employment-Unemployment Surveys (EUS), available since 1972-73, PLFS results provide a comparable data series on employment patterns. 

However, these also remain the only credible source of information on the quality of job and earnings from them. While there are several sources for the wages and earnings of casual workers, EUS-PLFS data-sets are the only source of information on the earnings of regular workers, who account for almost one-third of all workers in the economy.

The monthly report for April 2025 released on 15 May is the first of the monthly series. It presents estimates of the Labour Force Participation Rate (LFPR), Workforce Participation Rate (WPR) and Unemployment Rate (UR) by ‘weekly status’ for rural and urban areas. 

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For the latter, the findings are broadly similar to what was revealed by the quarterly report for October-December 2024. But its rural estimates are significantly at variance with findings of the annual report for 2024, with a lower LFPR and WPR in April 2025, and significantly higher unemployment rate for the 15-29 age group (and also for the country’s 15-plus population).

While monthly estimates of basic indicators are useful, these are of limited relevance for an economy whose employment structure is very diverse and complex. Unlike rich countries where most workers have regular payroll jobs in non-farm sectors, the Indian workforce relies mostly on informal employment. 

Even today, almost half of all Indian workers are engaged in agriculture, compared to less than 5% in most developed countries. Variations in the LFPR, WPR and UR are less relevant in an economy with a large proportion of the population vulnerable in terms of job quality and income assurance.

If the purpose of the monthly series is to provide meaningful insights into our labour market, it requires detailed data on sectoral shares, the nature of enterprises and earnings from employment. Fortunately, the data lets us generate most of these estimates. The PLFS’s re-introduction of land information allows rural analysts to delve deeper. 

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The principal challenge now relates to how we understand and characterize the labour market. Given the emergence of new employment categories such as gig work and new forms of labour arrangements interlinked with land and credit markets, we need a better understanding of what holds back the creation of quality jobs in the economy. The revamped PLFS series also expands its questionnaire on education and skills, which have emerged as important drivers of changes in the economy’s employment structure.

While the NSO has stepped up to provide the basic data necessary for us to analyse and understand the complexity of the country’s labour market, deeper research is now needed for this move to spell meaningful policy engagement. Research and policy must look beyond basic estimates of the WPR and unemployment rate. Expanding the monthly release to include wages/earnings, job quality and other relevant co-variates would aid the process of analysing India’s employment challenge.

The author is associate professor at Jawaharlal Nehru University and visiting fellow at the Centre de Sciences Humaines, New Delhi.