Directions: Read the passage and answer the questions that follow:
Paragraph 1: According to a report by the Central Statistics Office (CSO) between September 2017 and April 2018, the formal sector of the economy witnessed the addition of 4.1 million new jobs. The criteria for defining jobs in this report include those providing at least one government-financed or mandated social security benefit, such as the Employees' Provident Fund (EPF), National Pension Scheme, or Employees' State Insurance Scheme. Similar estimates have been presented by NITI Aayog and official economists since early this year, but skepticism has arisen among knowledgeable individuals.
Paragraph 2: The reliability and credibility of these official estimates are questionable for two main reasons. Firstly, the estimates are based on administrative records of implementing social security schemes, and the completeness, consistency, and accuracy of these records are unknown. Secondly, formal sector workers can legitimately access more than one social security scheme, raising the possibility of double counting. The release does not clarify how this issue is addressed in the database, leading experts to demand the release of administrative data for independent verification.
Paragraph 3: Additionally, the official data face a conceptual problem. The social security schemes mentioned are applicable to establishments above a certain size of employment and to specific kinds of enterprises. For example, in the factory sector, those employing 20 or more workers are mandated to provide EPF to all workers. If a factory goes from employing 19 to 20 workers, the EPF enrolment increases by 20 workers, but the additional job created is only for one worker, highlighting a fundamental flaw in the data.
Paragraph 4: The formal sector occupies the top tier of India's labor market pyramid, with agriculture at the bottom, employing 50% of the workforce. The remaining workers are in the non-farm informal sector, distributed across rural and urban areas. This sector has grown in recent decades at the expense of the other two sectors. Nearly half of the informal labor workers are self-employed in household enterprises, often involving unpaid family labor. Informal labor markets are characterized by varying degrees of underemployment or disguised unemployment.
Paragraph 5: Since 1972-73, the National Sample Survey (NSS) has conducted the five-yearly Employment-Unemployment Surveys (EUS), serving as the primary tool for analyzing labor market trends. Although infrequent, the EUS has been valuable in capturing the complexities of the labor market. The last round of the EUS was in 2011-12, and efforts to update employment trends include the replacement with an annual Period Labour Force Survey and a time-use survey. However, stable and credible estimates from these data series are expected to take some time. The Labour Bureau under the Ministry of Labour and Employment has conducted household surveys similar to the EUS since 2010-11, revealing a decline in the worker population ratio between 2013-14 and 2015-16, indicating a recent deterioration in the employment situation.
Question for Sample Reading Comprehension - 2
Try yourself:What is the main concern regarding the official estimates of job creation in the formal sector?
Explanation
The passage mentions that experts question the reliability and credibility of official estimates due to unknown completeness, consistency, and accuracy of administrative records.
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Question for Sample Reading Comprehension - 2
Try yourself:What is the conceptual problem identified in the official data regarding job creation?
Explanation
The passage highlights a conceptual problem where an increase in employment from 19 to 20 workers in a factory leads to an increase in EPF enrollment by 20 workers, but the additional job created is only for one worker.
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Question for Sample Reading Comprehension - 2
Try yourself:Which sector is positioned at the apex of India's labor market pyramid according to the passage?
Explanation
The passage mentions that the formal sector is at the apex of India's labor market pyramid.
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Question for Sample Reading Comprehension - 2
Try yourself:What characterizes the informal labor markets mentioned in the passage?
Explanation
The passage states that varying degrees of underemployment or disguised unemployment are defining features of informal labor markets.
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Question for Sample Reading Comprehension - 2
Try yourself:What has replaced the five-yearly Employment-Unemployment Surveys (EUS) conducted by the National Sample Survey (NSS) since 2011-12?
Explanation
The passage mentions the replacement of the EUS with an annual Period Labour Force Survey and a time-use survey, although stable and credible estimates are expected to take some time.
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