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LATEST NEWS UPDATES | Has demonetisation harmed non-farm employment generation in the medium term? -Roshan Kishore

Has demonetisation harmed non-farm employment generation in the medium term? -Roshan Kishore

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published Published on Sep 20, 2017   modified Modified on Sep 20, 2017
-Livemint.com

Despite the construction sector being in the doldrums, personal housing was holding its own—till demonetisation

Prime Minister Narendra Modi promised to create 10 million jobs in five years while campaigning in the 2014 general election. After completing more than three years in office, has the government been able to deliver? We do not know for sure. Findings of a large-sample survey on employment, conducted by the National Sample Survey Office (NSSO), will only be available around 2019. However, there is no debate about one thing. For the employment situation to improve, more non-farm jobs have to be created.

In the post-reform period, the construction sector has been the most dynamic from the perspective of non-farm job generation. In 1993-94, 74.4% of India’s employment was in the primary sector. This includes agriculture and mining and quarrying. Manufacturing, construction and services had a share of 7.3%, 3.3% and 14.8%, respectively. In 2011-12, the share of manufacturing, construction and services had increased to 8.5%, 13.1% and 18.7%, respectively. Construction alone added more non-farm jobs than manufacturing and services put together during this period. These figures are based on the principal status method, which takes into account the economic activity status for the major part of the past year.

Given its huge absorption capacity for manual labour, dynamism in the construction sector is crucial from the perspective of employment generation. Things started deteriorating at the beginning of this decade itself. According to the old GDP series, construction grew at 9.3% in the last decade. After 2011-12, annual growth figures have not crossed 5% even once. A deceleration in construction sector growth might have been one of the important reasons for the relatively slower growth in rural wages in recent years.

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Livemint.com, 20 September, 2017, http://www.livemint.com/Politics/pLBGVvA6CS3svSKpnD7sCM/Has-demonetisation-harmed-nonfarm-employment-generation-in.html


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