2023 · GS Paper 3 · Q11 · 15 marks

Most of the unemployment in India is structural in nature. Examine the methodology adopted to compute unemployment in the country and suggest improvements.

In short

India computes unemployment through the NSO's Periodic Labour Force Survey using usual, weekly and daily status, but its one-hour and 30-day work tests hide the underemployment and skill mismatch that make Indian unemployment structural. Adopting the ILO's 19th ICLS (2013) underutilisation measures would expose the real job deficit.

Model answer

Ghissu Editorial · Verified 4 Oct 2026

Introduction
Most Indian unemployment is structural, a mismatch of skills and jobs rather than a demand shortfall. So a PLFS rate that fell from 6.0% in 2017-18 to 3.2% in 2023-24 coexists with long job searches and idle youth.
Methodology Used to Compute Unemployment in India
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Survey architecture

The Periodic Labour Force Survey of the National Statistical Office replaced the quinquennial NSSO rounds in 2017 and, since 2025, gives monthly estimates.

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Activity status approaches

Usual Status covers 365 days, Current Weekly Status counts one hour of work in seven days as employment, and Current Daily Status uses half-days; EPFO payroll and the Labour Bureau's Quarterly Employment Survey supplement it.

Gaps in Measuring a Structural Problem
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Low work threshold

The one-hour and 30-day tests count the underemployed as employed, hiding disguised unemployment in farms that hold about 46% of workers.

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Skill mismatch unseen

The survey asks whether people work, not whether the job fits their education.

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Women and divergence

Unpaid helpers count as self-employed, care work is ignored, and CMIE often reports far higher rates.

Way Forward
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Measure underutilisation

Publish ILO 19th ICLS (2013) measures of underemployment and the potential labour force.

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Skill-match and admin data

Add a skill-match module and triangulate EPFO, ESIC and e-Shram records, with the Time Use Survey for women's work.

Conclusion
A structural problem needs structural statistics; measuring underemployment and mismatch would let Skill India target the real gap and turn the demographic dividend into SDG 8's decent work.

This model answer is indicative and the model can make mistakes; please verify key facts independently.

Hand-drawn diagram: How India Measures Unemployment. How India Measures Unemployment. Diagram (tree): How India Measures Unemployment; PLFS (NSO, since 2017); Usual Status: 365 days; Weekly Status: 7 days; Daily Status: half-days; Supplementary data; EPFO payroll
Diagram: How India Measures Unemployment

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Question from the official UPSC Civil Services (Main) Examination 2023 paper. Answer written by Ghissu's engine and checked against our editorial standards. Found an error? Tell us and we correct it within 48 hours.

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