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LATEST NEWS UPDATES | A Response to NITI Aayog's Rajiv Kumar on Seasonality and Job Losses After Demonetisation -Mahesh Vyas

A Response to NITI Aayog's Rajiv Kumar on Seasonality and Job Losses After Demonetisation -Mahesh Vyas

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published Published on Nov 9, 2017   modified Modified on Nov 9, 2017
-TheWire.in

Mahesh Vyas of the Centre for Monitoring Indian Economy (CMIE) responds to the NITI Aayog vice-chairman’s dismissal of CMIE’s research on unemployment in India.


In an interview with Karan Thapar for The Wire, NITI Aayog’s vice chairman, Rajiv Kumar, has been dismissive about CMIE-BSE unemployment statistics. He says that I had no answer to chief statistician T.C.A. Anant’s question on seasonal adjustment of unemployment data. This is an incorrect description of a brief interaction, which I relate below.

A couple of weeks ago, I was in a meeting in Delhi with Kumar and Anant, where the subject of discussion was about measuring employment and unemployment in India. After the meeting, as we were exchanging pleasantries and moving out, Anant effectively pulled me up on CMIE’s recent efforts at measuring unemployment in India.

What he said, essentially, was that it is not fair for me to state in what is no more than a footnote that the fall in jobs during January-April 2017 compared to September-December 2016 could reflect a seasonal effect, but then not take seasonality into consideration.

Anant was referring to my column of July 11 in Business Standard. The article can also be accessed from CMIE’s unemployment website.

This was the first time that I put out an estimate of the fall in jobs post demonetisation. I believe I was careful in not being alarmist and in not jumping to conclusion. The header did not scream that demonetisation had caused job losses. Most of the article focusses rather labouriously on statistics and even concepts. I then wonder and conjecture in the article on what could have caused this fall in jobs. I quote:

    “Note that the 9.6 million fall in the unemployed count is close to the addition to the workforce. This is like saying that almost the entire new workforce of January-April 2017 did not offer themselves for employment. This is odd. Is this a seasonal phenomenon?

    A longer time-series could help us de-seasonalise this to understand this phenomenon better. For now, we can make some intelligent guesses of what might be at work.

    September-December is a busy season as the kharif crop is harvested during this period and most festivals fall during these months. 2016 was a good kharif crop and this could have kept employment levels high. January-April is a relatively lean season. Further, demonetisation could have had its full impact during these months while its impact during September-December was partial.”


Note that the CMIE’s effort at estimating unemployment began only in January 2016. With less than two years of monthly series, it was (and is still) not possible to make adjustments for seasonality.

Please click here to read more.

TheWire.in, 9 November, 2017, https://thewire.in/195382/response-niti-aayogs-rajiv-kumar-seasonality-job-losses-demonetisation/


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