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LATEST NEWS UPDATES | A changing job market in rural India- Pramit Bhattacharya & Aishwarya Deshpande

A changing job market in rural India- Pramit Bhattacharya & Aishwarya Deshpande

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published Published on Nov 16, 2013   modified Modified on Nov 16, 2013
-Live Mint


NSSO data show that slower pace of jobs creation between 2004-05 and 2011-12 reflects a fall in distressed farm employment

Tracing the pace of new jobs created in an economy, a key electoral issue, is a good indicator of inclusive and balanced growth. But in a developing country such as India, the nature of new employment is often as important as the total number of jobs created. The changes unfolding in India's labour markets in the past few years are not immediately apparent by just looking at overall employment and wage numbers. In a new series, Mint examines the structural shifts in the labour markets, based on the latest data released by the National Sample Survey Office.

When India's economy was growing at its fastest, it seems ironical that the pace at which new jobs were created actually slackened. In the seven years between 2004-05 and 2011-12, when gross domestic product expanded at an average rate of 8.5%, there was new work for only 15 million people, compared with 60 million in the five years to 2004-05, when the country's economy clocked an average 5.7% growth, data from the National Sample Survey Organization (NSSO) show.

A closer look at the numbers, however, reveal that the slower pace of jobs creation reflects a fall in distressed farm employment. The aggregate employment data mask two structural shifts in India's labour market: a massive withdrawal of women from the labour force in recent years (examined in the next part of the series), and a rise in non-farm jobs, primarily in building and construction.

Nearly 30% of the 60 million jobs generated between 1999-2000 and 2004-05 were poorly paid jobs in agriculture. With rural incomes recovering in the past few years, many people quit the farm jobs they had taken up in distress earlier, labour economist Jayan Jose Thomas pointed out in a Mint opinion piece in September.

Although a majority of Indians worked in farms till recently, latest NSSO data show that this is no longer true as growth in non-farm jobs has gathered pace. A majority 51% of Indian workers are now employed off-farm. Compared with 5.9 million new non-farm jobs generated a year between 1993-94 and 2004-05, the seven years to 2011-12 saw net additions of an annual 6.9 million. Although the majority in rural India still lives off the land, the past few years has seen the sharpest decline ever in agricultural employment.

Farm employment in rural India fell by 8.6 percentage points to 64% between 2004-05 and 2011-12. A rural construction boom seems to have weaned many workers away from farms. The share of employment in construction rose by six percentage points to 11%; services came a distant second. The construction sector has been a job creator in urban India too, but its role has been less disruptive, as its share of employment rose only by 1.3 percentage points to 9.3%.

The pattern of increased employment choices in the countryside varies widely across states. Goa, with 31% rise in the share of non-farm employment, saw the biggest such increase, followed by Manipur with 24% gain. Uttarakhand, Meghalaya and Punjab also saw sharp increases in non-farm employment. In Goa and Punjab, the pick-up in non-farm employment has been broad-based. In Manipur, construction accounts for most of the increase. In Uttarakhand and Meghalaya, construction and tourism accounted for most of the increase.

Sikkim seems to be the only state where farm jobs rose between 2004-05 and 2011-12. Among states that saw the smallest gains in non-farm rural jobs, Chhattisgarh, Andhra Pradesh, Nagaland and Gujarat lead the league tables.


Live Mint, 15 November, 2013, http://www.livemint.com/Politics/VXbWDgeMmFeUCcWnmx5f1J/A-changing-job-market-in-rural-India.html


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