20-05-2025
Labour Force Survey has an update. It's a welcome one
India's Ministry of Statistics and Programme Implementation has unveiled a new and improved version of the Periodic Labour Force Survey (PLFS) and, with that, started providing timely data on the state of the labour market. The PLFS was launched in 2017 as an annual survey to replace the quinquennial Employment-Unemployment Surveys. Up until now, apart from the annual picture of India's unemployment, PLFS would provide a quarterly update, but only for urban areas. Last week, the MoSPI shared the first-ever monthly PLFS data — for April. Shifting to a monthly reporting cycle promises a salutary effect on policy evaluation. In the past, timely official data was scarce — to find out the impact on unemployment of, say, a pandemic-induced lockdown or a disruption like demonetisation. Some private agencies, such as the CMIE, have long been providing monthly, and even weekly, data, but such data has been challenged.
The PLFS has been revamped beyond just improving its frequency. For one, the sample design has been improved and the sample size enlarged. The sample size for each round of survey will now be 2,72,304 households — a 2.65 times increase in sample households to be covered in the PLFS compared to the number of sample households covered up to December 2024. The district has been made the primary geographical unit — to ensure sample observations from most of the districts in the PLFS sample, which, in turn, will improve the representativeness of the estimates. Also, notably, the annual reporting period has been aligned to the calendar year, beginning with January 2025 instead of July-June. This shift will enable timely updation of India's labour market statistics in the databases maintained by the international agencies.
These changes in the PLFS's methodology and frequency are welcome. As India's economy grows and seeks global investors, credible and timely data will be non-negotiable. The current data on the Indian labour market leaves a lot to be desired. For instance, according to the April data, while the overall unemployment rate in India is 5.1 per cent, it rises to 6.5 per cent when one looks at urban areas, and to 8.7 per cent when one looks at female unemployment in urban areas. The most worrisome news pertains to youth (15-29 years) unemployment, which stands at 13.8 per cent all-India, rises to 17.2 per cent in urban areas, and further to 23.7 per cent for young urban women.
