In News
- According to the recent trend there are fewer people employed in agriculture today, those moving out of farms are working more in construction sites and the informal economy than in factories.
Background
- 1993-94: Agriculture accounted for close to 62% of the country’s employed labour force.
- 2004-05: Survey in these years has dropped almost six percentage points.
- The declining trend continued albeit at a slower pace in the subsequent seven as well.
- Overall between 1993-94 and 2018-19: agriculture’s share in India’s workforce came down from 61.9% to 41.4%.
- Level of per capita GDP in 2018 and compared with the average for other countries in the same income bracket India’s farm sector should be employing 33-34% of the total workforce.
- 41.4% may not be a substantial deviation from the average.
Issues/ Challenges
- Weak structural transformation: there’s been a reversal of the trend in the last two years, which has seen the share of those employed in farms rise to 44-45%. This has primarily to do with the Covid-induced economic disruptions.
- The reverse migration of people back to the farms should be a temporary blip though with the surveys from 2021-22 hopefully revealing a restoration of the long-term trend.
- Structural transformation: even the movement of workforce from agriculture that India has witnessed over the past three decades or more does not qualify as what economists call structural transformation.
- Such transformation would involve the transfer of labour from farming to sectors particularly manufacturing and modern services where productivity, value-addition and average incomes are higher.
- The share of manufacturing (and mining) in total employment has actually fallen along with that of agriculture.
- The surplus labour pulled out from the farms is being largely absorbed in construction and services.
- Surplus labour isn’t moving to higher value-added non-farm activities specifically manufacturing and modern services.
- Labour transfer is happening within the low-productivity informal economy.
- Lack of jobs in manufacturing: It is the sector potentially best placed to absorb the children of farmers and agricultural labourers but the bulk of the rural workforce is engaged in construction and the informal services economy due to lack of jobs.
- Participation of women: Women suffer job losses disproportionately during economic shocks. The phenomenon repeated itself during the pandemic.
- Women accounted for less than 11% of all jobs in 2019-20, but they accounted for nearly 52% of the 7 million job losses since then.
- The female labour force participation rate among urban women was abysmally low at 9.4% in 2019-20 and fell to 7% in 2021-22.
Way forward/ Suggestions
- The IT industry is clearly an isolated island of the Indian economy that added jobs during the pandemic and is continuing to do so.
- Much of the IT sector’s recent success is courtesy of exports: These have in fact boomed due to Covid’s triggering increased demand for digitisation even among businesses that were hitherto slow in adoption.
- India’s net exports of software services have surged from $84.64 billion in 2019-20 to $109.54 billion in 2021-22.
- The unemployment situation can be tackled by providing skill development training at a much faster rate than what was happening in the last few years
- The employment objective and the output objective can be achieved, if greater investment is directed to small enterprises rather than to large enterprises.
- The Central government can easily give a directive and incentive to the industries to train rural and tribal youth in their establishments so that skill training can take place
- Social security should be provided to the poor, so that people do not die of starvation.
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Employment Generation Schemes/ Programmes of Government of India
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Source: IE
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