1987-88, 1993-94, 1999-2000, 2004-05, and 2009-10.
5
Employment growth has been relatively low, and even negative in recent years in agriculture. It is not expected to generate jobs for an increasingly larger number of
persons, as it is already overloaded with people with disguised unemployment. Employment growth has been reasonably fast in the non-agricultural sectors: over the
longer period it has, on an average, been around 3.5 per cent per annum. It has, however, not been fast enough to bring about a structural transformation in the Indian
workforce as has taken place in the structure of GDP. Agriculture continues to absorb over one-half of workers though it now contributes only about 16 percent of GDP
Table 2. Over the years, the share of agriculture in GDP has sharply declined.
Table 2 Structural change in GDP and employment Sector
Share in GDP
Employment
1972-73 1983
1993-94 2009-10
1972-73 1983
1993-94 2009-10
Agriculture 40.92
37.15 30.01
16.23 73.92
68.59 63.98
51.36
Industry of which :
Manufacturing
23.32 13.43
24.30 14.52
25.15 14.46
25.93 15.41
11.30 8.87
13.98 10.66
14.96 10.63
22.02 11.50
Service 35.76
38.56 44.84
57.84 14.78
17.63 21.07
26.67
All 100
100 100
100 100
100 100
100
Source: As in Table 1
But the decline in its share in employment has been much slower. As a result, the relativity of per worker income between agriculture and non-agriculture has
sharply deteriorated: the ratio between the two was 1:4 in 1972-73; it increased to 1:5.5 in 2009-10. The slow pace of structural changes in workforce that is responsible
for this growing disparity is primarily accounted for by a relative inability of the services sector to generate employment at a rate commensurate with its very high
GDP growth. Employment growth in industry has been relatively fast in spite of the fact that its GDP growth has been quite slow. With its relatively high employment
intensity, a faster growth of industrial sector could have generated much more employment, thus raising the overall employment growth and resulted in faster
transformation of work force. ‘Industry’, no doubt, had the fastest growth in employment but most of it has been in construction, not in manufacturing: for
example, during the former recoded employment growth of 9.72 per cent while the latter only of 1.9 per cent 2000-2010
A faster employment growth in non-agricultural sectors which have relatively higher productivity is important with a view to raising the overall quality of
employment. Unemployment as such is not a major problem if one goes by the official statistics. According to NSSO data, unemployment rates using different
reference periods and criteria are relatively low, ranging between 2.5 using major time criterion and reference period of one year and 6.5 percent using days of
unemployment to labour force days of all workers, with a weekly reference period. They have not changed much over the years Table 3.
6
Table 3 Unemployment rates: Percentage of labour force Usual Status
UPSS CWS
CDS 1
2 3
4 5
1972-73
3.80 1.61
4.32 8.32
1977-78 4.32
2.58 4.57
8.22
1983
2.77 1.93
4.52 8.27
1987-88 3.80
2.74 4.90
6.15
1993-94
2.78 1.96
3.67 6.03
1999-00 2.75
2.25 4.35
7.28
2004-05
3.19 2.40
4.49 8.23
2009-10 2.51
2.09 3.61
6.52
UPS: Usual Principal Status. A Person is considered unemployed according to this concept if available for but without work for major part of the year. UPSS: Usual Principal and Subsidiary Status includes, besides UPS, those available but unable to find work on a subsidiary basis, during a year.
CWS: Current Weekly Status. A person is unemployed if available for but unable to find work even for one hour during the reference week. CDS: Current Daily Status measures unemployment in terms of person days of unemployment of all persons in the labour force during the reference week.
Source: As in Table 1.
That is because the rates of employment growth have been similar to those of the growth in labour force. Labour force grew at about 2.5 percent per annum during
1970’s and so did employment. Labour force growth slightly exceeded the two percent growth in employment during 19831993-94. Employment growth has since
been less than 2 percent, but labour force has also been growing at a slower rate of 1.7 percent during the past one and the half decade.
India’s ‘employment problem’, is however, not fully reflected in the unemployment rates as measured on the basis of recorded statistics. One,
underemployment is of a much higher magnitude than unemployment, as is suggested by a much larger estimates of unemployment on CDS basis than on UPS or CWS
basis. Second, a large number of employed earn very low income: about one-fifth of th
em are estimated to be ‘poor’ according to relatively modest official definition of ‘poverty line’. According to one estimate, about 2.5 percent of the ‘employed’
persons are severely under-employed getting work not more than three days in a week; about 25
percent of the ‘working poor’ making about 5 percent of all workers earns less than half the official poverty line income Papola and Sahu 2012. These
persons are in need, as much as those unemployed, of alternative employment. Added together with those estimated as unemployed, about 4 per cent of the work
force, the number of workers seeking employment make about 12 per cent of the labour force in 2012 ;and to this, one needs to add 8.5 million annual entrants in the
labour force.