A

REPORT
ON
MEASUREMENT
OF
UNEMPLOYMENT
IN INDIA
PRESENTED BY:

Sandeep Kumar Baranwal

MA (Economics)

Session 2009-11

Gokhale Institute Of Politics and Economics

Contents
Serial no Name of the topic

1 Objective of the study

2 Introduction to the measurement of unemployment

3
Reasons for the measurement of unemployment in India

4 Guidelines for the measurement of unemployment in India

5 Types of unemployment in India

6 Measurement of unemployment in India: an Introduction

7 General measurement of unemployment in India

8 Concepts and definitions adopted in various important data sources

9 Approaches to measurement of unemployment in India

10 Three approaches to measurement of unemployment in India: in a nutshell

11 The detailed activity categories under each of the three broad activity statuses used in the
survey

12 Sources of Data on Unemployment

13 Analysis of Approaches to Measurement of Unemployment in India

14 Recommendations for the measurement of unemployment in India

15 Bibliography
Objectives of study
1. To gain insight of measurement of unemployment practices in India
2. To understand the procedure for estimation of unemployed population under
different types of unemployment
3. To understand the difference between different types of measurement of
unemployment in India
4. To identify the target population that needs immediate government attention
5. To gain insight about difficulties faced in estimation of unemployment in
India
6. To gain insight in the areas of unemployed population
7. To suggest an appropriate change in the measurement of unemployment in
India in context of globalization.
Reasons of measurement of unemployment in
India
1. To address the problem of unemployment
2. To identify the causes of unemployment in India
3. To undertake appraisal of government policy vis-à-vis employment
generation in the economy
4. To identify the sectors with labor-intensive technology
5. To decide on pattern of investment expenditure on education
6. To identify the trends and pattern of unemployment in India during the
planning era
7. To identify the scope for promotion of various sectors through state support
such that they contribute to the employment growth of the country
8. To identify the manners in which fiscal expansionary policy is framed such
that short term employment generation and opportunities be created to
immediately address the problem of unemployment
9. To foster planning for balanced regional development
10.To discover the structure of unemployment and their implications on various
socio-economic parameters
11.For designing poverty alleviation programs that target the unemployed, the
daily status measure would seem to provide the best estimate of
unemployment, since it is the poor who are likely to experience short spells
of unemployment rather than the nonpoor who can afford to stay
unemployed longer.
Guidelines for the Measurement of
Unemployment India
1. In measuring unemployment in a country like India, certain specific features
of the workforce need to be taken into account. They are:
2. The sample size of the unemployed should be such that the characteristics
exhibited by them should be representative of the entire population.
3. The field workers should be efficient.
4. A time for the survey should be selected such that there exists less of
mobility of the people in that time period.
5. Use of information technology and satellite pictures shall be used to get the
information about the density of the population in a given region.
6. While recording information about the unemployment, the interviewee
should be also asked about their highest educational qualification and areas
of interest.
7. The unemployed people should be asked to report about their unemployment
in the office of Employment Exchange.
Types of unemployment in India
India as a nation is faced with massive problem of unemployment.
Unemployment can be defined as a state of worklessness for a man fit and
willing to work. It is a condition of involuntary and not voluntary idleness.
Some features of unemployment have been identified as follows:

1. The incidence of unemployment is much higher in urban areas than in rural

areas.
2. Unemployment rates for women are higher than those for men.
3. The incidence of unemployment among the educated is much higher than
the overall unemployment.

There is greater unemployment in agricultural sector than in industrial and

other major sectors.

Economists and social thinkers have classified unemployment into various

types. Generally unemployment can be classified in two types:

(1) Voluntary unemployment

In this type of unemployment a person is out of job of his own desire doesn't
work on the prevalent or prescribed wages. Either he wants higher wages or
doesn't want to work at all. It is in fact social problem leading to social
disorganization. Social problems and forces such as a revolution, a social
upheaval, a class struggle, a financial or economic crisis a war between
nations, mental illness, political corruption mounting unemployment and
crime etc. threaten the smooth working of society. Social values are often
regarded as the sustaining forces of society. They contribute to the strength
and stability of social order. But due to rapid social change new values come
up and some of the old values decline. At the same time, people are not is a
position to reject the old completely and accept the new altogether. Here,
conflict between the old and the new is the inevitable result which leads to the
social disorganization in imposed situation. In economic terminology this
situation is voluntary unemployment.

(2) Involuntary unemployment

In this type of situation the person who is unemployed has no say in the
matter. It means that a person is separated from remunerative work and devoid
of wages although he is capable of earning his wages and is also anxious to
earn them. Forms and types of unemployment according to Hock are:

1. Cyclical unemployment - This is the result of the trade cycle which is

a part of the capitalist system. In such a system, there is greater
unemployment and when there is depression a large number of people
are rendered unemployed. Since such an economic crisis is the result of
trade cycle, the unemployment is a part of it.
2. Sudden unemployment - When at the place where workers have been
employed there is some change, a large number of persons are
unemployed. It all happens in the industries, trades and business where
people are employed for a job and suddenly when the job has ended
they are asked to go.
3. Unemployment caused by failure of Industries - In many cases, a
business a factory or an industry has to close down. There may be
various factors responsible for it there may be dispute amongst the
partners, the business may give huge loss or the business may not turn
out to be useful and so on.
 4. Unemployment caused by deterioration in Industry and business -
In various industries, trades or business, sometimes, there is
deterioration. This deterioration may be due to various factors. In
efficiency of the employers, keen competitions less profit etc. are some
of the factors responsible for deterioration in the industry and the
business.
5. Seasonal unemployment - Certain industries and traders engage
workers for a particular season. When the season has ended the
workers are rendered unemployed. Sugar industry is an example of this
type of seasonal unemployment.

The problem of unemployment has becoming a colossal. Various problems have

caused this problem. There are individual factors like age, vocational unfitness
and physical disabilities which restrict the people. External factors include
technological and economic factors. There is enormous increase in the
population. Every year India adds to her population afresh. More than this every
year about 5 million people become eligible for securing jobs. Business field is
subject to ups and downs of trade cycle and globalization. Economic depression
or sick industries are often close down compelling their employees to become
unemployed. Technological advancement contributes to economic
development .But unplanned and uncontrolled growth of technology is causing
havoc on job opportunities. The computerization and automation has led to
technological unemployment. Strikes and lockouts have become inseparable
aspect of the industrial world today. Due to these industries often face economic
loses and production comes down. Since workers do not get any salary or wages
during the strike period they suffer from economic hardships. They become
permanently or temporarily unemployed. Today young people are not ready to
take jobs which are considered to be socially degrading or lowly. Our
educational system has its own irreparable defects and its contribution to the
unemployment is an open truth. Our education does not prepare the minds of
young generation to become self-employed on the contrary it makes them
dependent on government vacancies which are hard to come. Our State right
from the beginning of Five year plans has introduced several employment
generating schemes and programmes over the years but in the absence of proper
implementation and monitoring have failed to achieve the required targets.
Recently UPA Government has come up with Rural Employment Guarantee
program which aims to provide minimum days of employment to people living
in the villages. This is a laudable programme if implemented sincerely because it
will provide employment to people during natural calamities like drought, floods
etc. The remedial measures for reducing unemployment may lay greater
emphasis on creation of opportunities for self -employment, augmentation of
productivity and income levels of the working poor, shift in emphasis from
creation of relief type of employment to the building up of durable productive
assets in the rural areas and instead of attempting to revert somewhat to
protectionist policies the pace of privatization may be accelerated.
Measurement of unemployment in
India: an Introduction
The National Sample Survey Organization (NSSO), which provides estimates of
the rates of unemployment on the basis of its quinquennial surveys, uses three
different concepts. A person is considered unemployed on Usual Status (US) basis,
if he/she was not working, but was either seeking or was available for work for the
major part of the reference year. On the basis of a week as the reference period, a
person is considered unemployed by Current Weekly Status (CWS), if he/she had
not worked even for one hour during the week, but was seeking or was available
for work. The third concept of unemployment is the Current Daily Status (CDS),
which is in terms of total person days of unemployment, and is the aggregate of all
the unemployment days of all persons in the labor force during the reference week.
Thus, unemployment is measured through labor force surveys which elicit the
`activity’ status of the respondent for a given reference period. First, the
respondent is identified as not working. Second, for those not working, the typical
question is of the form: are you available for work, and have you made some effort
to find work during the last x days. Those who answer in the affirmative are the
unemployed while those who answer in the negative are the people who have opted
out of the labor force. The labor force is the sum of the employed and the
unemployed and the rate of unemployment is the proportion of labor force that is
unemployed. The reference period could vary from a week, to four weeks to a year.
Such an approach works well when the activity status is invariant within the
reference period, i.e., either the person is employed, unemployed or out of the
labor force.
Beginning with the 27th round in 1972/73, labor force surveys have been
conducted every five years using standardized concepts and procedures based on
the recommendations of the Committee of Experts (Planning Commission, 1970).

The usual status unemployment measure is defined with respect to a reference

period of a year. The multiple activity status issue, which is more acute longer the
reference period, is resolved on the basis of majority time. This criterion is used
first to classify a person as either belonging to the labor force (i.e., employed or
unemployed) or not belonging to the labor force. If the person belongs to the labor
force, then whether the person is to be classified as employed or unemployed is
decided once again on majority time. The survey also uses a reference period of a
week to compute a `weekly’ status unemployment measure. Here a person is
regarded as employed if she or he worked for at least one hour during the reference
week. It follows that a person is unemployed if she or he did not work for even one
hour during the reference week and sought work or was available for work during
the reference week. Clearly, the usual status measure reflects only long
unemployment spells. For instance, a male in the working age group (who is never
out of the labor force) would be unemployed on the usual status measure only if
the unemployed spell during the year is longer than the employed period. While,
the weekly status measure captures short unemployment periods, it ignores
unemployment for less than a week. A third approach is to abandon the effort to
assign every individual a unique activity status over the reference period. The NSS
employment survey elicits an individual’s time disposition during each day of the
reference week. A day is split into two half-units and an individual is assigned a
unique activity status for that period (rather than the reference week). This
information can be used to compute person days of unemployment in the economy.
As households are surveyed uniformly throughout the year, the aggregates derived
from weekly data are representative of annual aggregates. The `daily’ status rate
of unemployment is the proportion of labor force (measured in person days) that
is unemployed (also in person days). For most of the labor force work is seasonal,
short-term and without tenure. Consequently, an individual’s activity status can
vary even within as short of a reference period as a week. The daily status
unemployment rate would therefore seem the appropriate one for capturing their
unemployment.
General Measurement of Unemployment
in India
There are basically two categories of measurement of unemployment. They are:

Claimant Count

This method of calculating unemployment was widely used in the 1980s as well as
the 1990s. This method, basically takes account of the number of heads
unemployed and receiving unemployment benefits. Computation should be done
with care since there may be double counting of people who have registered
themselves in employment exchanges and those who are receiving the
unemployment benefits.
The method has two advantages of calculating unemployment by using
administrative records. Firstly, this method takes a complete count of the
unemployed and so it is free from any sampling error.
Secondly, obtaining such data is also very cost effective and is available on a
regular basis.
However, this method of computation is fraught with certain limitations. The
collection of data follows administrative rules and regulations, which may not be in
line with statistical principles. Again, since different countries follow different
computational rules, it is difficult to compare the unemployment statistics across
different countries. Another difficulty is that the rules tend to change over time and
so the unemployment data cannot be compared across different time horizons.
Another disadvantage of using the claimant count as a measure of unemployment
is that it takes into account only that portion of the population, which has registered
themselves in the employment exchanges or has claimed unemployment benefit.
The individuals who have not registered in both but are unemployed are left out of
the unemployment count of the administrative records. Hence, the administrative
records give a lower estimate of the actual employment scenario.
The above-mentioned limitations of administrative records gave rise to the most
current computation method, that of Labor Force Survey.

Labor Force Survey

The Labor Force Survey is done by taking household samples. A standard

questionnaire is prepared. All individuals in the workable age are asked about their
employment status and the relevant data is taken. Individuals are next classified
into employed, unemployed or economic active. The sample data is then utilized to
estimate the number of individuals employed, unemployed or underemployed.
The labor force survey also has many disadvantages. The use of standard
questionnaire is itself faulty. The respondents may provide subjective answers,
which in some case may be misleading. Next, the sampling method has many
statistical errors, which gets magnified with smaller size of the sample. Again a
well-equipped statistical infrastructure is mandatory for a more accurate collection
of data. Experienced supervisors and interviewers are required.
The greatest advantage of this computational method is that they meet international
standards. Unemployment statistics obtained hence can be used to compare data
across countries and across different periods of time.
Concepts and Definitions adopted in Various
Important Data Sources
One of the serious problems in this field is the use of different concepts and
definitions and employment and unemployment in different sources such as NSSO
and census and in the same source also it has changed over time. This makes the
comparison of data among various sources quite difficult. However, efforts have
been made by various sources to standardize the definitions, particularly NSS, to
ensure comparability of data over time. Brief description of changes in the
concepts and definitions in two main sources, namely census and NSSO, are
discussed below.
(i) Population Census
The data on economic activity of the people collected up to the 1951 census were
based on income and dependency concepts. From the 1961 census onward, the
concept of work measured in terms of time or the labor force concept has been
followed. In 1961 census, in case of seasonal work, a person was considered as a
worker if he/she had some work of more than one hour a day throughout the
greater part of the working season. In the case of regular work, the person should
have been employed during any of the fifteen days preceding the day on which the
enumerator had visited the household.
In 1971 census, every person was asked what his main activity was, i.e. how he/she
engaged himself mostly. On the basis of this question the population was divided
into two main activities as “workers” and ‘nonworkers’. The reference period
adopted was one week prior to the date of enumeration in the case of regular work.
If a person had participated in any such regular work on any one of the days during
this reference period and this has been returned as his main activity, the person was
categorized accordingly.
In the case of seasonal workers, a person’s main activity was ascertained with
reference to such work in the last one year even if the person was not economically
active in the week prior to the enumeration because it may be likely that even when
a person is engaged in some work during the period of one week prior to the date
of enumeration, the main activity of the person may be cultivation, agricultural
labor or some other work attended to normally by the person in the course of the
year. Every person whether he or she had returned himself or herself in any of the
basically non-working category was required to state his or her secondary work.
Each person was asked if besides the main activity, the person had participated in
any secondary work. The economic question of the 1981 census were formulated
so as to first divide the population into those who had worked any time at all
during the year preceding the census and those who had not worked at all during
the year. The latter were termed as non-workers. Having classified the population
into these broad groups, an attempt was made to sub-divide those who had worked
any
time into two groups: (I) main workers- those who had worked in some economic
activity for the major part of the year, i.e. for a period of six months (183 days) or
more; and (ii) marginal workers- those who had worked for some time during the
last year, but not for the major part. An attempt was also made to find out whether
those who were non-workers or those who were marginal workers seeking or
available for work. Thus, a trichotomy of persons into mutually exclusive groups
of main workers, marginal workers and non-workers was introduced in the 1981
census. A uniform reference period of one-year preceding the enumeration was
adopted for recording activity status in the 1981 census irrespective of whether the
activity was seasonal or regular. In the 1991 census, a uniform reference period of
one year for both seasonal and regular activities was adopted as in 1981 census.
With a view to net persons engaged in unpaid work on farm or in family enterprise,
the word “Including unpaid work on farm or in family enterprise” was inserted in
the schedule itself. The question of seeking/available for work was asked only for
non-workers. In case of non-workers seeking/available for work, information
whether they are seeking/available for work for the first time or not was also
ascertained so as to know the number of entrants to the labor force for the first
time. In order to ensure that the economic activity of unpaid workers on farm or in
family enterprise (women, children are the predominant constituent of this force)
properly enumerated in the 1991 census, the instructions to census enumerators
were expanded and emphasis was laid on the need to ask probing questions
regarding the work done at any time at all last year or any of the seasons in the
reference period specially in the case of women. Though the questionnaire of 2001
Population Census is not yet finalized, the economic questions to be asked are
likely to be same as asked in 1991 census.
(ii) National Sample Survey Organization Concept of work:
The NSSO has defined ‘work’ or ‘gainful activity’ as the activity pursued for pay,
profit or family gain or in other words, the activity which adds value to the national
product. Normally, it is an activity, which results in production of goods and
services for exchange. However, all activities in ‘agricultural sector’ in which a
part or whole of the agricultural production is used for own consumption and does
not go for sale are also considered as gainful.
Approaches to Measurement of Unemployment
in India
The NSSO survey has adopted three different approaches to measure employment
and unemployment. The three approaches are:
(1) Usual status approach with a reference period of 365 days preceding the date of
survey.
(2) Current weekly status approach with a reference period of seven days
preceding the date of survey.
(3) Current daily status approach with each day of the seven days preceding date of
survey as the reference period. This approach attempts classification of person-
days and not persons.
The NSS classifications of economic activity are based on the recommendations of
Expert Committee on Unemployment Estimates (1970) set up by the Planning
Commission. The estimates are generated separately for four quarters of year.
These quarters are almost co-terminus with four ‘seasons’.
This helps to study the seasonal pattern of employment and unemployment.
(a) Classification according to Usual Status Approach
The status of activity on which a person has spent relatively longer time of the
preceding 365 days prior to the date of survey is considered to be the usual
principal activity status of the person. Accordingly, a person’s principal usual
status was considered as working or employed if he or she is engaged relatively for
a longer time during the reference period of last 365 days, in any one or more of
the work activities. A person was treated as Seeking or Available for Work or
unemployed if he or she was not working but was either seeking or available for
work for a relatively longer time of the specified reference period. Similarly, one
was classified as ‘not in labor force’, if he or she was engaged in relatively longer
period in any one of the non-gainful activities. Within the two broad activity
categories “working” and “not in labor force”, the detailed activity category was
determined on the basis of time spent criterion. A person categorized as ‘worker’
on the basis of his/her principal status is referred to as ‘principal status worker’. A
non-worker who pursued some gainful activity in a subsidiary capacity is referred
to as ‘subsidiary status worker’. Principal status workers and subsidiary status
workers together constitute ‘all workers’ according to the usual status
classification. The usual status concept covering the principal and subsidiary
workers is the closest to the concept used in the Census to enumerate workers. By
including even those who are not principal workers but work in a subsidiary
capacity, e.g., students, pensioners, etc., the usual status concept comprehensively
covers all those engaged in or seeking economic activities. In a situation where
social security in the form of a reasonable and assured support as allowance for
unemployment is not guaranteed, those who take to work in a subsidiary capacity
do so generally out of economic compulsion. Hence both the Principal and the
Subsidiary workers need to be considered in estimating both the labor force and
employment. Moreover the usual status concept; with one year as the reference
period over which disposition of time to activities is seen in classifying an
individual as being in or out of labor force, and those in labor force as being
employed or seeking work, yields more stable estimates of employment in contrast
to the other two concepts which have shorter reference periods of a week or an
average day of the week respectively. Taking the usual status concept as the
reference, it is possible to study the nature and characteristics of those employed,
using the information available from the data compiled on current weekly and
current daily status concepts bases
(b) Classification according to current weekly status approach
For classification of the population under current weekly status approach, a
priority-cum-major time rule has been adopted. According to the criteria, status of
‘working’ gets priority over status of ‘not working’ or ‘being available for work’.
Status of ‘seeking or being available for work’ in turn gets priority over non-
gainful activities pursued. When a person is found to be possessing more than one
gainful activity, the unique activity is decided as that activity on which relatively
more time has been spent. A person is considered to be employed if he or she
pursues any one or more of the gainful activities for at least one-hour on any day of
the reference week. On the other hand, if a person does not pursue any gainful
activity, but has been seeking or available for work, the person is considered as
unemployed.
(c) Classification according to current daily status approach
Under this approach, all the activities of a person are listed on each day of the
preceding week. Up to two statuses were recorded for each day of the reference
week for persons pursuing more than one activity during the seven days of the
reference week. The unit of classification is ‘half day’. Under this concept, a
person is considered as ‘working’ (employed) for the entire day if he had worked
four hours or more during the day. If he had worked for one hour or more, but less
than four hours, he is considered as working for half day and ‘seeking/available for
work’ (unemployed) and not in labor force for other half of the day, depending on
whether he was seeking or available for work or not. If a person is not engaged in
any work, even for one hour on the day, but was seeking/available for work for
four hours or more, he is considered unemployed for the entire day. If he is
available for work for less than four hours only, he is considered as unemployed
for half day and not in labor force for other half day. A person who neither had any
work to do nor was ‘available for work even for half of the day’ is considered ‘ not
in labor force’ for the entire day. The aggregate of ‘ day units’, either half or full,
under the different activity categories during the reference week divided by seven
provides the estimates of average number of person days by activity category
during an average week over the survey period on one year.
Three approaches to measurement of unemployment
in India: in a nutshell

(1) 'Usual Status' approaches: This is based on the status of the activity on which a
person spent the majority of the 365 days preceding the date of the survey. A
person is considered to be 'working or employed' if he/she was engaged for a
relatively longer time during the past year in any one or more work-related
(economic) activities. A person is considered to be 'seeking or available' for work
or 'unemployed' if the person was not working but was either seeking or available
for work for a relatively longer period of time during the past year.

(2) 'Current Weekly Status' approaches: A person is considered to be working or

employed if the person was engaged for at least one hour on any one day of the
previous week on any work related (economic) activity. A person who has not
worked for even one hour on any one day of the week, but has been seeking or has
been available for work at any time for at least one hour during the week, is
considered to be 'seeking/available for work' (unemployed). Others are considered
to be 'not available for work' (not in the labor force).
(3) 'Current Daily Status' approach: This approach attempts to classify employment
by person-days, rather than by persons. A person is considered to be 'working'
(employed) for the entire day if he/she has worked 4 hours or more during the day.
If a person has worked one hour or more, but less than 4 hours, he/she is
considered to be 'employed' for half the day, and 'seeking/available for work'
(unemployed) or 'not available for work' (not in the labour force) for the other half
of the day depending on whether he/she is seeking or available for work.
The data are obtained through sample surveys conducted by the National Sample
Survey Organisation (NSSO). Every fifth year, the sample size is of the order of
120,000 households. In intervening years, the sample size is of the order of 40,000
households. Each survey is divided into four sub-rounds, with each sub-round of
three months duration. (The results of each sub-round are not presently compiled
separately.) The survey covers the whole of the rural and urban areas of India,
except for a few inaccessible and difficult pockets. The activity status of each
person in the household is collected with reference to the previous 365 days, the
previous 7 days and daily for 7 days.

Note: Labor market data do not have the same macroeconomic implications for
India as they do for highly industrialized countries in the sense that they are not
considered to be useful indicators of short-run pressures on the economy,
particularly in view of the substantial proportion of value-added generated by the
agricultural sector and the structure of that sector.
The detailed activity categories under each of the
three broad activity statuses used in the survey
  WORKING (OR EMPLOYED)

1. worked in a household enterprise (self-employed) as an own-account

worker;
2. worked in a household enterprise (self-employed) as an employer;
3. worked in a household enterprise (self-employed) as ‘helper’;
4. worked as a regular salaried/wage employee;
5. worked as a casual wage labor in public of works;
6. worked as a casual wage labor in other types of works;
7. Did not work due to sickness though there was work in household
enterprise;
8. Did not work due to other reasons though there was work in household
enterprise;
9. Did not work due to sickness but had regular salaried/wage employment;
10.did not work due to other reasons but had regular salaried/wage
employment,
NOT WORKING BUT AVAILABLE FOR WORK (OR
UNEMPLOYED)
11.sought work,
12.Did not seek but was available for work.
NEITHER WORKING NOR AVAILABLE FOR WORK (OR NOT IN
LABOUR FORCE)
13.attended educational institutions;
14.attended domestic duties only;
 15.Attended domestic duties and was also engaged in free collection of goods
(vegetables, roots, fire-wood, cattle feed, etc.,) tailoring, weaving etc., for
household use.
16.rentiers,  pensioners, remittance recipients, etc.,
17.not able to work due to disability;
18.beggars, prostitutes etc;
19.others;
20.did not work due to sickness (for casual workers only)
21.Children of age 0 – 4 years.

 (Sl.no. 7,8,9,10,12 and 20) are applicable only in the case of current weekly and
current daily status approaches.)

Further, the population as belonging to different economic activity categories was

classified independently by adopting three different approaches, namely:

(i) the usual status approach

(ii) the current daily approach and
(iii) the current weekly status approach
Sources of Data on Unemployment
The statistics on unemployment can be collected either through censuses of
population and economic establishments and national level sample surveys, or
through returns under various Acts relating to regulation of economic
establishments regarding workers, etc. Employment Exchanges recording job
seekers, etc., can be another source. A brief description of various sources is given
below.
(i) Population Census
It has been the tradition in the population census of India to collect information on
the economic activity of the people. The Census data provide an inventory of
human resources of the country showing their number, characteristics, occupation
and distribution among various branches of economy. The measurement of
economic activity has been attempted in every census of the country even though
there has been variation in the concepts adopted from time to time.
(ii) National Sample Survey Organization (NSSO)
The NSSO collects data through sample surveys based on scientific technique of
random sampling through household enquiry both in rural and urban areas. In a
number of earlier rounds, the NSSO has experimented with various concepts and
methodologies in trying out and standardizing a proper framework to estimate, in
quantitative terms, the characteristics of labor force, employment, unemployment
and under-employment. The experimental surveys were followed by regular annual
sample surveys till late sixties. Afterwards, the quinquennial surveys started in 27t
h round (1972-73), with the follow up surveys in 32nd round (1977-78), 38t h
round (1983) and 43rd round (1987-88) and 50t h Round (1993-94). The NSSO
now also gives annual estimate of employment and unemployment on the basis of
a thin sample.
(iii) Employment Market Information Programme
The Directorate General of Employment and Training (DGET) has been
implementing the Employment Market Information (EMI) scheme over the last 30
years through a net-work of Employment Exchanges spread over the country. This
programme covers the organized sector, which includes all establishments in the
public sector and non-agricultural establishments employing ten or more persons in
the private sector. While data on employment in the public sector and those non-
agricultural establishments in the private sector employing more than 25 persons
are collected under the provisions of Employment Exchanges (Compulsory
Notification of Vacancies) Act, 1959, the same from the nonagricultural
Establishments in the private sector employing ten to 24 persons are being
collected on a voluntary basis.
The EMI is one of the important sources of information on employment in the
organized sector of the economy. It also provides information about the structure
of employment, occupational compositions and educational profile of employees,
assessment of manpower shortages in the organized sector, etc. one of the major
limitations of EMI is that it does not cover the vast unorganized sector with enough
employment avenues.
(iv) Employment Exchange Statistics
The day-to-day registration at Employment Exchanges and notification of
vacancies by the employers generate comprehensive information, which facilitates
the appraisal of organized labor market. The statistical returns from Employment
Exchanges relating to various characteristics of job seekers fresh or otherwise, and
the demand pattern of employment in industry and service sectors provide only a
broad indication of the unemployment situation in the organized labor market.
However, as registration is voluntary and they are located in urban areas, they
cannot be deemed to cover all job seekers. Further there are known deficiencies
arising from the fact that not all the registrants would be really without a job.
Moreover, the number of job seekers is not necessarily the number of unemployed
persons.
(v) Economic Census
Under the scheme of Economic Census and Surveys, a country-wide census of all
non-agricultural economic activities was carried out during 1977 to provide basic
information on the number of establishments, number of persons usually working,
the nature of activities and other characteristics such as type of ownership, social
group of owner, etc., of the establishments. The census did not cover own-account
and agricultural enterprises. An establishment for the purpose of economic census
has been defined as one engaged in production and/or distribution of goods and/or
services not for the sole purpose of own consumption and employing at least one
hired worker on a fairly regular basis.
The economic census of 1980 was dovetailed with the house listing operations of
the population census of 1981 covering all types of enterprises, viz., establishments
and own account enterprises. Four follow-up surveys have also been conducted till
now. The economic census of 1990 was conducted along with the house listing
operations of 1991 population census. The last economic census was conducted
during 1998. The economic census gives employment by type of enterprise,
distribution of employment by major activity group, distribution or persons usually
working in non-agricultural own account enterprises by States and rural-urban
break-up, percentage distribution of hired workers and females employed to
persons usually working in non-agricultural establishments, etc.
Analysis of Approaches to Measurement
of Unemployment in India

Although, the approaches to measurement of unemployment in India such as usual

status, weekly status and daily status of recording and estimating the level of
unemployment on scientific lines , yet such approaches do not estimate the level of
unemployment appropriately.
Keeping in the objectives of estimating unemployment level in the country, the
level of unemployment figures generated with the use of such approaches serves
little of a purpose. The unemployment problem in India is related to the poverty
problem and the problem of human capital formation which has significant
repercussions on the rate of growth of economy, saving rate, investment rate,
extent of inequalities in distribution of income and wealth prevailing in the society.
Weekly and daily approaches are not without faults. It states that even if the person
is gainfully employed for an hour, he/she would be said to be employed.
However, an appropriate concept of unemployment should consider not only the
fact that the person was gainfully employed or not but also, whether their earnings
for the hours employed fetched enough to support themselves and their families on
reasonable standards.
Given the context of globalization, which India entered into, there is appearing a
shift in the trends and pattern of unemployment in favor of unemployed and
educated youths.
The unemployment record agencies are required to come up with an appropriate
machinery to track such kind of unemployment on different lines. This is because
they are different to the traditional form of unemployment. They are human
capitals; however in absence of general support for entrepreneurship and skill
development and inadequacy of physical capital they could not significantly make
contribution to the economic growth and development of the country.
Recommendations on Measurement of
Unemployment in India
1. Revision of approach for estimating unemployment rate in the economy
should be given an importance.
2. Different machinery should be set up to estimate the open unemployment
among educated youths.
3. The concept of current weekly status approach to estimating unemployment
should be given up.
4. The unemployment details should be broadened up to facilitate the target
population specific programmes for solving unemployment problems.
5. The unemployment details should be related to the poverty estimates of the
country.
6. A separate estimate of different categories of unemployed should be made
for example an estimate of unemployment among street dwellers of a
metropolitan city is made.
 Bibliography
1. www.economywatch.com
2. www.isid.ac.in
3. ideas.repec.org
4. www.legco.gov.hk/
5. www.jstor.org/stable/1818137
6. www.informaworld.com
7. www.cdedse.org/pdf/work174.pdf
8. www.icai.org/resource_file/16789ppui.pdf
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