In India, unemployment data are more useful to historians than economists.
While China is joining the U.S. and Brazil in moving toward monthly figures to take the pulse of their economies, the latest jobs numbers in India are at least a year old. Prime Minister Narendra Modi’s administration is now weighing a proposal to start work on a quarterly report.
“That’s something that would aid significantly, particularly in an economy where you know that domestic demand remains the key driver,” said Shubhada Rao, an economist at Yes Bank Ltd. “The entire crux of the matter is how accurate is the measurement, and for India, we have some way to go.”
A quarterly release would be another step in the modernization of India’s economic policy making. A new consumer price index, an inflation target for the central bank and gross domestic product calculations that meet global standards are all bringing India into the 21st century.
More frequent jobs data would assist central bank Governor Raghuram Rajan in gauging slack in the economy. It will also help assess Modi’s pledge to add jobs for millions of youth about to enter one of the world’s largest labor markets, a promise that propelled him to a sweeping election win last year.
Right now proxy indicators suggest a weak jobs market. A Manpowergroup Inc. survey in the three months ending June showed that hiring plans fell from last year. While private Indian companies plan to hire more in the coming year, levels have moderated to 8 percent compared with the global average of 17 percent, according to a Markit survey published Monday.
“Indians are very good at drawing inferences from proxy variables,” said Rao, who is based in Mumbai. “I have yet to come to that comfort where I can just look at annual data and say employment is good, bad or ugly.”
Inefficient data collection and widespread informal employment make it tough to measure workers in India. Sources are scattered, with seven federal agencies publishing reports, according to a 2014 analysis by the Statistics Ministry.
Its latest benchmark report, published every five years, surveyed more than 100,000 households and 450,000 people. It pegged the jobless rate at anywhere from 2.2 percent to 5.6 percent depending on four statistical approaches.
More recent findings, published in January using data obtained between January and July 2014, estimate unemployment at 4.9 percent. That’s from the Ministry of Labour, which started in 2010 to publish yearly assessments to better gauge the impact of the global financial crisis.
The CIA’s World Factbook lists India’s unemployment at 8.6 percent for 2014, the highest rate in Asia, according to data compiled by Bloomberg.
The lack of dependable jobs numbers adds to the haze that faces the central bank. While the new GDP data are more in line with the rest of the world, historical figures are still lacking, making it difficult to explain how India suddenly became the world’s fastest-growing major economy.
The central bank would “explicitly” include employment in its policy statements “if we had a good series,” Rajan said in February. Quarterly numbers may start by December, Deputy Governor Urjit Patel added.
The Finance Ministry is evaluating a proposal from the Statistics Ministry to add 170 permanent and as many as 400 contract workers to conduct the quarterly survey, according to Pronob Sen, who heads a commission that coordinates statistics-related policies. He wants them to start as early as Oct. 1.
“This kind of work is extremely resource-intensive,” Sen said in an interview last month in New Delhi. A year of data is needed before analysis and publication, he added.
The Finance Ministry declined to answer e-mailed questions.
More than 90 percent of India’s workers are unregistered, complicating any efforts to track unemployment. While India’s surveys aim to record everyone looking for a job, many more probably slip through the cracks.
That’s a trait common to many developing economies in Asia, which tend to publish “pretty poor” labor data, said Ed Teather, a Singapore-based economist at UBS Group AG.
Thailand’s official unemployment rate stands below 1 percent. In China, where it barely fluctuates, the government is now working on turning its quarterly report into a more exhaustive monthly one, with 15,000 surveyors due to start canvassing the country in July.
“China is probably at the stage where you got a lot more people in the formal sector,” Teather said. “So data would be easier to collect in a meaningful way.”