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Farm Crisis | Unemployment
Unemployment

Unemployment

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What's Inside

KEY TRENDS

 

• In 2017-18, 24.8 percent of rural working-age men and 74.5 percent of rural working-age (viz. 15-59 years) women were not employed. In urban areas, 25.8 percent of working-age men and 80.2 percent of working-age women were not employed AB

 

• Both the Periodic Labour Force Survey (PLFS) and the Consumer Pyramids Survey of the Centre for Monitoring the Indian Economy (CMIE-CPDX) report the overall unemployment rate to be around 6 per cent in 2018, double of what it was in the decade from 2000 to 2011 AA

 

• In the 1970s and 1980s, when GDP growth was around 3-4 percent, employment growth was around 2 percent per annum. Since the 1990s, and particularly in the 2000s, GDP growth accelerated to 7 percent but employment growth slowed to 1 percent or even less. The ratio of employment growth to Gross Domestic Product (GDP) growth is now less than 0.1 percent ∂∂

 

• The unemployment rate was estimated to be 5.0 percent during 2015-16 at the national level as per the Usual Principal Status (UPS) approach. In rural areas, unemployment rate stood at 5.1 percent whereas in urban areas, the same was 4.9 percent (as per the UPS approach) @$

• In 2015-16, nearly 24 percent households benefitted from employment generating schemes like Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Prime Minister's Employment Generation Programme (PMEGP), Swarnajayanti Gram Swarojgar Yojana (SGSY) and Swarna Jayanti Shahari Rozgar Yojana (SJSRY) etc @$

• In 2015-16, almost 24 percent households benefitted from employment generating schemes like Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Prime Minister's Employment Generation Programme (PMEGP), Swarnajayanti Gram Swarojgar Yojana (SGSY) and Swarna Jayanti Shahari Rozgar Yojana (SJSRY) etc @$ 

 

• The Pradhan Mantri Kaushal Vikas Yojana (PMKVY) proposes to cover 24 lakh Indian youth with meaningful, industry relevant, Skill Based Training under which 5.32 lakh persons have already been enrolled. Of this number, 4.38 lakh have successfully completed training throughout India $*

• In addition, the Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY), a placement-linked skill development scheme for rural youth who are poor, as a skilling component of the National Rural Livelihood Mission (NRLM) has also been launched. During 2015-16, against a target of skilling 1.78 lakhs candidates under the DDU-GKY, a total of 1.75 lakh have already been trained and 0.60 lakh placed till November 2015 $* 

 

• The proportion of persons of age 15 years and above with educational level secondary and above was the highest for Christians in rural areas for both males and females (36.3 percent for rural males and 31.1 percent for rural females) and for females in urban areas (62.7 percent) whereas for males in urban areas it was the highest among Sikhs (67.6 percent). Among the specific religious groups, unemployment rate in both rural and urban areas (based on usual status) was the highest for Christians (4.5 percent in rural areas and 5.9 percent in urban areas) and lowest for Sikhs in rural areas (1.3 percent) and Hindus in urban areas (3.3 percent) @$

 

• Regardless of which data source is used, it seems clear that employment growth is lagging behind growth in the labour force. For example, according to the Census, between 2001 and 2011, labor force growth was 2.23 percent (male and female combined). This is lower than most estimates of employment growth in this decade of closer to 1.4 percent. Creating more rapid employment opportunities is clearly a major policy challenge $$

 

• A rising trend is observed in real wages since 1995 more particularly from 2007 especially in the developed states like Punjab, Haryana, Tamil Nadu and Andhra Pradesh. And the acceleration of this rising trend since 2007, even in slack seasons, indicates that the labor shortage is a permanent phenomenon and era of surplus labor is over. At the all India level, there is an upward movement in wage rates since 2006 onwards $


• Among rural males, the most demanded field of vocational training was ‘driving and motor mechanic work’ (18 percent) followed by ‘computer trades’ (17 percent), ‘electrical and electronic engineering trades’ (16 percent), ‘mechanical engineering trades’ (12 percent) in the rural areas £

• Among rural female, the highest demand for field of training was observed in ‘textile related work’ (26 percent).This was followed by the ‘computer trades’ (18 percent) and ‘health and paramedical services related work’ (14 percent) £

• India’s real wages fell 1% between 2008 and 2011, while labour productivity grew 7.6% in the same period. In contrast, China’s real wage growth was 11% in 2008-11, while labour productivity expanded 9%. India’s real wage growth was 1% in 1999-2007, while labour productivity rose by 5%. In 1999-2007, China’s real wage growth was 13.5%, while labour productivity growth was 9% ∂

• The unemployment rate is estimated to be 3.8 per cent at All India level under the UPS approach. In rural areas, unemployment rate is 3.4 per cent whereas in urban areas, the same is 5.0 per cent under the UPS approach. At all India level, the female unemployment rate is estimated to be 6.9 per cent whereas for males, the unemployment rate is 2.9 per cent under the UPS approach++

• Employment elasticity of agricultural growth (see the note below) declined from 0.52 during 1983-1993/94 to 0.28 during 1993/94-2004/05#

• The growth of total employment declined from 2.03 per cent during 1983/1993-94 to 1.85 per cent during 1993-94/2004-05#

• The share of unorganized sector agricultural workers in the total agricultural workers was 98 per cent during 2004-05#

• Nearly two-thirds of the agricultural workers (64 per cent) are self-employed, or farmers as we call them, and the remaining, a little over one-third (36 per cent), wage workers#

• Growth rate of agricultural employment decelerated from 1.4 per cent during the period 1983/1993-94 to 0.8 per cent during the period 1993-94/2004-05*

 

Note-

Usual Principal Status: The labour force is typically measured through the usual principal activity status (UPS) which reflects the status of an individual over a reference period of one year. Thus, a person is classified as belonging to labour force, if s/he had been either working or looking for work during longer part of the 365 days preceding the survey. The UPS measure excludes from the labour force all those who are employed and/or unemployed for a total of less than six months. Thus persons, who work intermittently, either because of the pattern of work in the household farm or enterprise or due to economic compulsions and other reasons, would not be included in the labour force unless their days at work and unemployment totalled over half the reference year.

Employment elasticity indicates an increase in employment in response to economic growth. A reduction in employment elasticity suggests that the rate of increase in jobs is on the decline 

 

AB Annual Report on Periodic Labour Force Survey (July 2017 - June 2018), which has been produced by the National Statistical Office (released in May 2019), please click here to access

 

AA State of Working India 2019, Centre for Sustainable Employment, Azim Premji University, please click here to access

 

∂∂ State of Working India 2018, Centre for Sustainable Employment, Azim Premji University, please click here to access

 

@$ Report on Fifth Annual Employment-Unemployment Survey (2015-16) Volume-1, prepared by the Labour Bureau (Chandigarh), please click here to access

 

$* Economic Survey 2015-16, Ministry of Finance, (Volume-1 , Volume-2)

 

@$ NSS 68th Round Report entitled: Employment and Unemployment Situation among Major Religious Groups in India (2011-12) released in February, 2016, MoSPI (please click here to access)

 

$$ Economic Survey 2014-15 (Please click Vol1 and Vol2  to access)

 

$ Trends in Rural Wage Rates: Whether India Reached Lewis Turning Point by A Amarender Reddy (2013), International Crops Research Institute for Semi-Arid Tropics (ICRISAT/CGIAR)

 

£ NSS report no. 551 (66/10/6) titled Status of Education and Vocational Training in India (66th Round), July 2009-June 2010, published in March 2013, MoSPI, http://mospi.nic.in/Mospi_New/upload/nss_report_551.pdf

 

∂ Global Wage Report 2012-13: Wages and equitable growth, ILO, http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dc
omm/documents/publication/wcms_194843.pdf 

 

++ Report on Second Annual Employment-Unemployment Survey 2011-12,

http://labourbureau.nic.in/rep_1.pdf,  

http://labourbureau.nic.in/rep_2.pdf,  

http://labourbureau.nic.in/press_n.pdf

 

# The Challenge of Employment in India: An Informal Economy Perspective, Volume-I, Main Report, National Commission for Enterprises in the Unorganised Sector (NCEUS), April, 2009, http://nceus.gov.in/

 

* NCEUS (2007), Report on Conditions of Work and Promotion of Livelihoods in the Unorganised Sector

 

OVERVIEW

 

 
Despite a consistently high GDP growth rate, India is not able to generate even a fraction of new job its rural folks require. The new job creation is restricted to higher end service sector areas like finance, insurance, IT and IT Enable Services (ITES) rather than in manufacturing and infrastructure where the low-skill rural migrants hope to find work. A combination of sluggish village economy, stagnation in rural crafts and cottage industry, falling farm incomes and poor human development indicators (HDI) is a perfect recipe for more rural unemployment and more distress migration to cities. 
 
Even before the recession started, creation of new jobs had hit negative growth. Nine out of ten people in the trillion-dollar economy work in the unorganized sector and three fourths of all Indians live on Rs 20 a day, according to the National Commission for Enterprises in the Unorganized Sector (NCEUS). Many economists argue that migration from villages to cities is a necessary condition for growth. However, India's 'low cost advantage' in the global market ensures low earnings which fail to kick off the growth cycle of reasonable purchasing power creating more domestic demand and finally leading to more job creation.
 
Numbers show that instead of ‘getting there’ we could be moving in the opposite direction. For instance the rate of unemployment rose by 1 percentage point in the decade between 1994 and 2005. Among rural males the proportion of self-employed has also fallen by four percentage points between early eighties and 2005. This spells doom for work participation of rural poor in the face of falling employment.
 
Figures also show that the situation is unchanged or worsened for rural females since the early eighties. Over 45 percent of the farmers’ meager incomes come from rural non-farm employment (RNFE), which, in effect, is another name for casual labour. The wages are typically low because the farmer has to take whatever work he can get in the vicinity of his village. Right now only 57 percent of the farmers are self employed and above 36 percent are wage workers, of which 98 percent are engaged as casual labour.
 

 

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