Measurement of the extent of Formal sector and Formal employment

Data availability on the extent of formal employment has been a controversial issue. With different governments using different statistics, it has been difficult to ascertain the status of formal employment in India.

Methods for measurement Formal sector and Formal employment

  • Taxnet – GST registered companies
  • The institutional survey by NSSO (Employment unemployment survey) and Labour ministry (company and form level employment).
  • The census covers a household survey
  • Social security in Employees’ Provident Fund Organisation (EPFO) and Employees’ State Insurance Corporation (ESIC).
Measurement of the extent of Formal sector and Formal employment image

What are the issues?

  • Unreliability of any one set of data.
  • Does not captured new job creation in informal sector.
  • Lack of integration between different data sets.
  • Different estimates by different methods.
  • Non-transparency in method of Data Collection.
  • Lack of integrated approach and Framework.
  • Manipulation of data set sets.

Steps taken by the Government

  • NSSO collects employment-unemployment data every year.
  • Launch of Shram Suvidha portal for companies to register about their labor forces.
  • Unique Labour identification number (LIN).
  • Integration of Pan card with Aadhaar to streamline data set.
  • GSTN and as a source of big data and Employment details.
  • Digitization of salary payment will lead to further improvement in the collection of reliable data

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