Principal Status Worker

The term Principal Status Worker is an important concept used in labour force and employment statistics in India, particularly by the National Sample Survey Office (NSSO) and other official agencies under the Ministry of Statistics and Programme Implementation (MoSPI). It helps classify individuals according to the nature and duration of their employment during a specified reference period, thereby providing a clearer understanding of labour participation and economic activity patterns in the country.

Background and Context

To analyse employment and unemployment in India, the NSSO (now known as the National Statistical Office – NSO) employs several approaches based on the duration and intensity of work performed by individuals. These include:

1. Usual Principal and Subsidiary Status (UPSS).
2. Current Weekly Status (CWS).
3. Current Daily Status (CDS).

Among these, the Usual Principal Status (UPS) is a fundamental measure that identifies a person’s major activity over a longer reference period, typically one year preceding the survey date. The concept of Principal Status Worker stems from this classification and plays a key role in estimating long-term employment trends, workforce participation, and economic dependency ratios.

Definition

According to the NSSO’s employment and unemployment surveys, a Principal Status Worker is defined as:

“A person who has pursued any economic activity for a major part of the 365 days preceding the date of the survey.”

This person is considered usually employed if he or she was engaged in a gainful economic activity for 183 days or more (i.e., six months or above) during the reference year.
In other words, a Principal Status Worker is one whose main occupation or principal activity during the year is an economic (income-generating) activity, as opposed to being unemployed or out of the labour force.

Classification of Activity Status

Under the usual activity status approach, individuals are first classified as economically active or not economically active based on their engagement during the reference year.
A. Economically Active (Workers):

• Individuals engaged in economic activities (production of goods and services contributing to national income).

B. Not Economically Active:

• Those engaged primarily in non-economic activities, such as students, homemakers, dependents, pensioners, or physically disabled persons not seeking work.

Among the economically active population, further classification is made based on the nature of activity:

1. Principal Status Worker (PSW) – The individual’s main or primary economic activity.
2. Subsidiary Status Worker (SSW) – The individual’s secondary or occasional economic activity carried out for less than six months during the reference year.

Together, these two categories make up the Usual Principal and Subsidiary Status (UPSS) workers, capturing both regular and occasional work engagements.

Determination Criteria

In determining whether a person qualifies as a Principal Status Worker, the following aspects are considered:

• Time Criterion: The person must have worked for the major part of the year (≥ 183 days).
• Nature of Activity: The activity must be economic, i.e., contributing to the production of goods or services recognised in the national accounts.
• Self-Reporting and Verification: Information is gathered through structured surveys, where respondents indicate their primary occupation during the past year.

If an individual has multiple activities, the one in which he or she spent the longest time or earned the highest income is treated as the principal activity.

Types of Principal Status Workers

The Principal Status Workers are categorised based on their employment relationship and nature of work:

1. Self-employed:
   • Includes own-account workers, employers, and unpaid family workers.
   • Example: A farmer cultivating his own land for most of the year.
2. Regular Salaried/Wage Employees:
   • Persons working in return for a regular salary or wages, usually under an employer–employee relationship.
   • Example: A schoolteacher, office clerk, or nurse employed throughout the year.
3. Casual Labourers:
   • Workers engaged in casual or seasonal work for wages paid daily or periodically.
   • Example: Construction workers or agricultural labourers employed for major portions of the year.

These distinctions are essential for analysing sectoral employment, gender participation, and income stability across occupational groups.

Importance and Uses

The concept of the Principal Status Worker is vital in labour economics, social planning, and policy formulation. Its key uses include:

• Measurement of Long-Term Employment Trends: Provides an estimate of the stable or permanent workforce engaged in economic activities over an extended period.
• Understanding Workforce Composition: Helps determine the proportion of population primarily dependent on specific sectors such as agriculture, manufacturing, or services.
• Gender and Rural–Urban Analysis: Highlights employment disparities between men and women, and between rural and urban regions.
• Policy Formulation: Informs employment generation programmes, skill development schemes, and social protection initiatives.
• National Accounts Contribution: Facilitates estimation of labour inputs for Gross Domestic Product (GDP) calculations.

Comparison with Other Status Measures

Thus, while Principal Status gives a broad view of the long-term employment situation, the Current Weekly and Daily Status provide short-term and intensity-based measures of labour utilisation.

Example for Clarity

Consider the following illustrative cases:

• Example 1: A farmer engaged in cultivation for nine months and unemployed for three months is considered a Principal Status Worker (self-employed in agriculture).
• Example 2: A housewife who occasionally stitches clothes for sale for one month is a Subsidiary Status Worker but not a Principal Status Worker.
• Example 3: A construction worker employed for more than 183 days in the year qualifies as a Principal Status Worker (casual labour).

Limitations and Challenges

While the Principal Status approach provides valuable long-term insights, it also has limitations:

• Seasonality Ignored: It may not capture the cyclical or seasonal nature of employment, especially in agriculture.
• Underreporting: Individuals may misclassify their main activity, leading to inaccuracies.
• Inadequate for Informal Sector: Given the dominance of informal employment in India, many short-term engagements may go unrecorded.
• Gender Bias: Women engaged in unpaid family work are often underrepresented due to self-reporting biases.

To address these issues, the NSSO complements the usual status approach with Current Weekly and Current Daily measures for a comprehensive understanding of employment dynamics.

Policy Relevance in India

The classification of Principal Status Workers is central to employment policy and welfare schemes in India. Data derived from the Periodic Labour Force Survey (PLFS) and earlier Employment–Unemployment Surveys (EUS) help policymakers design programmes such as:

• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) for rural employment support.
• Skill India Mission for workforce upskilling.
• Atmanirbhar Bharat initiatives for self-employment promotion.
• Sector-specific policies targeting agriculture, manufacturing, and services employment generation.

It also aids in evaluating progress toward Sustainable Development Goal (SDG) 8 – Decent Work and Economic Growth.

Summary