EMPLOYMEN

T
TRENDS IN
INDIA
CLASS : BA(hons) Economics
(Semester 4)
SUBJECT : INDIAN ECONOMIC
DEVELOPMENT
SUBMITTED TO : MS. AKANSHA KAUSHIK
SUBMITTED BY : Kevin Kuriakose (140213)

Sidra Siddiquie
(140246)
Sakshi Agarwal
(140251)
Deeksha Agnihotri
(140257)
Resuf Ahmed
(140281)

ACKNOWLEDGEMENT
Firstly we would like to thank our teacher and guide, Ms.
Aakansha Kaushik who gave us her valuable suggestions
and ideas when we were in need of them. She
encouraged us to work on this project.
We are also grateful to our college for giving us the
opportunity to work with them and for providing us with
the necessary resources.
We are immensely grateful to all involved in this project
as without their inspiration and valuable suggestion it
would not have been possible to develop this project in
prescribed time.
Thankyou.

ABSTRACT
Using the NASSO data the group tires to reveal an overall
picture of the Employment Trends in India- The working
age population, jobless growth, labour laws legislation,
share of sectors, promising sectors for employment
growth, employment of youth and employment trends of
women in India.
It looks at rural and urban differences, inter-state
disparities and compares the growth rate with
contemporary nations.

There is joy in work. There is no happiness except in the

realization that we have accomplished something.
-Henry Ford

CONTENTS
Introduction
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18

Workforce Participation Ratio

Rural Urban Mix
Working Age Population- Demographics and estimates
Jobless Growth
Labour Laws and legislation(Brief)
Branching of Employment across sectors
Share of sectors in Employment trend
Employment Trends in rural and Urban Areas
MNREGA
Employing the youth
Education wise profile of Workforce
Structure of Employment
Challenges to Modern Labour Market
Other challenges
Employment Trends of Women in India
Female Sectorial Employment
Educational Status Of women
Wages Paid to Women

INTRODUCTION
India's rapid economic growth has reduced extreme poverty among Indians.
Between 1983 and 2012, average real wages grew more than 3% annually.
However, for the almost 460 million working-age Indians who are poised to
become the worlds largest labour force by 2030 huge employment
deficits still remain. Most of their jobs are casual with low productivity. Almost
60% of Indian workers are still considered poor, despite having a job. And
while in some advanced sectors of the economy, skilled workers have joined
the ranks of a booming middle-class and opportunities for regular formal
employment are increasing, the benefits of these gains are enjoyed by only a
minority of Indians, and reveal a widening inequality and the fragility of
Indias social protection.
Employment growth in India has some striking features, which needs only
brief attention.

Structural transformation agriculture's share declining from 68.5% in

1983, to 55.4% in 2004-05.

Low or declining employment elasticity. Between 1997 and 2004, 1.8

million (6.3%) jobs lost in organized sector including 1.2 million (18%)
in manufacturing.

Agricultural wages have risen since 1980s; yet lower than the
minimum wages .Wages are still low to overcome absolute poverty.
There is casualisation of wage contracts in all sectors.

Rural-Urban job mix

Rural India accounted for lions share of job additions from 2005 to 2010In
contrast to the first half of the decade; majority of the job additions from
2005 to 2010 took place in rural India. Of the 27.7 million job additions, rural
areas accounted for nearly 17.8 million, which were largely in the form of
casual jobs (Table 1 below). Further, nearly 80 per cent of increment in rural
jobs came from six states Uttar Pradesh, West Bengal, Andhra Pradesh,
Rajasthan, Madhya Pradesh and Bihar. Barring Bihar and Andhra Pradesh, the
economic growth of the remaining four states had been considerably lower
than the India-average. But in all these states, the construction sector grew
by an average of nearly 9 per cent during this period and most job additions
in the rural areas of these states have been driven by the construction

sector. Some of the people who have moved from agriculture to construction
could have secured employment through social schemes like MNREGA, and
have been counted under the subsidiary activity status.

Working Age Population

India, now home to 1.2 billion people, is projected to overtake China in
about a decade to become the worlds most populous country. The United
Nations Population Division projects that Indias population ages 50 and
older will reach 34 percent by 2050 (UN 2011). Between 2010 and 2050,
the share 65 and older is expected to increase from 5 percent to 14
percent. As Indias population ages, the nation will face a shrinking pool of
working-age people to support the elderly population. By 2042, the share
of Indians 60 and older is projected to exceed children and youth ages 14
and younger (Chatterji et al. 2008). Bloom (2011a) notes the burden of
old-age dependency will be substantially offset by the decline in youth
dependency associated with declining fertility.

The ratio of working-age to non-working-age people in India mirrored the

corresponding ratio in East Asia from 1950 to 1975. Since then, it has been
lower than that of East Asia corresponding to a higher burden of youth
dependency. Indeed, Indias demographic cycle now lags roughly 25 years
behind that of East Asia. A purely demographic perspective suggests that the
next three decades will be a period of catching up for India with respect to
per capita income in East Asia. While these fertility scenarios have very
different implications for the future age structure of Indias population, all
three suggest further growth in the working-age share. Under the low fertility
scenario, according to which the total fertility rate will drop to 1.4 by 2030,
India is expected to reach a higher working-age ratio than ever seen in East
Asia. The medium scenario shows India reaching a ratio nearly as high as
East Asias high point, and the high scenario shows a very modest increase
over todays ratio in India. In sum, the medium- and low-fertility scenarios
bode well with respect to Indias potential for realizing a sizable demographic
dividend, representing what could amount to an additional percentage point
or more of per capita income growth, compounded year after year. This is not
an insignificant amount, given that the annual rate of growth of Indias real
income per capita averaged a little over 4% during the past three decades
(World Bank, 2010).

Jobless growth
One of the most disturbing numbers that the 2009-10 employmentunemployment National Sample Survey (NSS) data show is the addition of
merely 2.76 million work opportunities during the period of fastest growth for
the economy (Table 1). Compared to this, there was an addition of 60 million
to the workforce during 1999-2000 and 2004-05.

GDP growth has steadily increased from 4.5% during 1970s to 9%

during 2005 2012 periods.
The elasticity of employment with respect to GDP declined
continuously from 0.52 in the 1970s to 0.02 in the second half of
2000s.
Employment growth and elasticity have declined for the primary sector
(which is needed). However, it is declining in manufacturing sector
also. Similarly, the elasticity of tertiary sector has also declined.

This captures the paradox of growth that does not create employment, a
phenomenon called Jobless Growth and still leave open the question: why

has this been the case? Answer to this question (in simple) can be Indias
Lost Economic Transformation. This growth is credited not because of
creation of new employment opportunity as the result from development, but
due to accumulation of wealth and increase in wages. Growth has two
characteristics: It increases the availability of cash in hand and/or increases
in demand requiring new activities to meet the supply leading to an increase
in jobs.
Arguments favoring Jobless-Growth:
1. Indias atypical pattern of growth: It is important to recognize that Indias
pattern of growth has been atypical and has not followed the standard
path (i.e., the phases of development process or the structural
transformation did not go hand in hand from primary sector to
manufacturing and then the tertiary, one driving the other).
However, for India, it seems that the second (manufacturing) stage of
development process has been bypassed and has entered into the third
(service) stage directly from the first (agriculture) stage.
2. Service Sector led growth In India growth is attributed to service sector,
whereby both employment and wages have seen a rise. But as figures say,
the biggest employing sector in India is the Agriculture sector, employing
45% of the population but contributing 15% to the GDP, whereas Service
sector is the biggest contributor to the GDP but employs less than 30%.
Manufacturing contributes 16% to the GDP and employs around 13%.
3. Failure in raising labour intensive manufacturing: Labour intensive
manufacturing sector did not become the engine of growth. In fact, it was
the knowledge-intensive services sector which along with some segments of
capital intensive manufacturing was the engines of growth in India. But these
sectors by their nature were not employment-intensive.
4. Import-oriented economy: India did not move from the import substituting
phases of its economic development to an export-oriented development
strategy and hence failed to witness a strong growth in the labour intensive
segment of the manufacturing sector. The opening up of the economy lead to
the availability of cheap capital goods from abroad.
Lack of backward and forward linkages between agriculture, industry and
service sector has also failed to create jobs.

Labour laws And Legislation

Currently, there are 44 labour laws under the purview of Central Government
and more than 100 under State Governments, which deal with a host of
labour issues. Unfortunately, these labour laws protect only 7-8 percent of
the organized sector workers employed at the cost of 93 per cent
unorganized sector workers. The entire gamut of the labour laws should
therefore be simplified, clubbed together wherever possible and made less
cumbersome to make the environment more employment friendly.
The labour legislations within India are rather inadequate, to support the
versatile and abysmal labour participation and protection. This is quite
evident since, labor laws mostly deal with the organized sector. Extent of
protection and benefits for workers rise with size of firm or factory. Further,
there is no national minimum wage, and no economy-wide social security.
Labour being a concurrent subject in the constitution, states are empowered
to enact separate legislations. Such a lack of uniformity also plays a
detrimental role. The legislations tend to be aspirational, with limited
enforcement. Best illustrated by the job-security law: firms employing 100 or
more workers are mandated to seek the states permission to retrench or lay
off a worker.

Branching Of Employment Across The

Sectors
Employment growth has been over two percent for almost thirty years since
early 1950s. In fact, it is recorded to be much higher during the 1970s. But
since the 1980s there has been a trend towards a decline in the growth rate
of employment.
TABLE: ECONOMIC GROWTH IN DIFFERENT SECTORS 1972-73 TO 1999-2000

As figures in Table above show, growth rate of employment declined

continuously from one period to another except for the period 198788/1993

94. A higher growth during this period seems to have been primarily
contributed by agriculture which otherwise has experienced a generally low
and rapidly declining employment growth. Among other major sectors,
manufacturing has also experienced a declining trend in employment
growth; but, construction, trade and transport have fluctuating trends and
have recorded a relatively high employment growth even during 19942000
when overall employment growth has been the lowest. In fact, the non
agricultural sectors together have registered a relatively high employment
growth of 2.69 per cent during this period, but because of a low growth of
0.06 in agriculture, which had a weight of 60 per cent in total employment,
the aggregate employment growth works out to be only 1.02 per cent.
Construction, trade and transport recorded employment growth rates of
6.61, 6.20 and 5.58 per cent respectively and manufacturing 2.05 per cent
during 19942000. What is found to be particularly intriguing is the fact that
while employment growth was reasonably high at around 2 per cent with just
about 3.5 per cent growth rate of GDP during the earlier decades, with over 6
per cent GDP growth, employment growth has been much lower since the
1980s, particularly during the period 19942000. It must, however, be
clarified that with large weight of agriculture, the overall employment growth
has been mainly influenced by employment growth in that sector. Thus, even
though employment growth in construction, trade, transport and
manufacturing has improved, the aggregate employment growth has
significantly declined during 19942000 as compared to 198894 due to a
steep fall in employment growth rate in agriculture (and to a certain extent a
decline in the growth rate of employment in community, social and personal
services).
Slowdown in employment growth in agriculture has been a result both of a
low GDP growth and a decline in employment elasticity (ratio of employment
growth to GDP growth). Employment content of growth as measured by
employment elasticity has been declining over the entire period since 1972
73, but has seen a particularly sharp decline during 19942000.
Manufacturing, on the other hand, had a reasonably high elasticity to begin
with, but has shown a continuous decline with slight increase during 1994
2000.

Employment Structure
With differential growth of employment among different sectors of the economy,
there have obviously been changes in the structure of employment. Among the

three major sectors by broad division of economic activity, namely, agriculture,

industry and services, there has been a decline, as expected, in the share of
agriculture and increase in the share of industry and services in total employment.
The structural changes have, however, been slow. In a period of 27 years, from
1973 to 2000, the share of agriculture has declined by 17 percentage points only
from 74 to 57 per cent. Share of industry increased from 11 to 18 per cent and that
of services rose faster from 15 per cent in 197273 to 26 per cent in 19992000,
growing particularly fast during 198788 to 19992000.

Employment Shares of Major Sectors (%)

80
70
60
50
40
30
20
10
0

Agriculture

Industry

Services

The slow change in employment structure assumes the nature of a problem

particularly when seen along with the change in the structure of the national
gross domestic product. During the period when the share of employment in
agriculture declined from 74 per cent to 57 per cent, its contribution in GDP
declined from over 40 per cent to 22 per cent; and, when the share of
services sector in employment increased from 15 to 26 per cent, its
contribution to GDP increased much faster from around 30 per cent to 52 per
cent. As a result the asymmetry between the income and employment
shares among different sectors has sharply increased, particularly between
the agricultural and nonagricultural sectors.
A sharper decline in
contribution of agriculture in GDP than in its share in employment implies a
decline in its relative productivity and increase in income differentials
between agriculture and nonagricultural sectors. An opposite trend is seen
in the services, where the increase in GDP share has been faster than of
employment, while industry has retained its position in respect of relative
productivity. That there would be a decline in the share of agriculture in GDP
was expected, but a continuance of heavy dependence of workers and
population on agriculture as source of income and livelihood is a matter of

concern from the viewpoints of poverty and inequality. One hopes that a
relatively higher employment growth in manufacturing, construction,
transport and services like trade, as experienced in recent years will lead to
some correction in this increasing imbalance.

Increasing Casualisation
Another aspect of employment trends and structure that is of interest in a
developmental context is the distribution of workers by employment
category in terms of selfemployed, regular wage and salaried workers and
casual wage earners. It has been generally expected that with shift of
workers from agriculture to non agricultural activities and from footloose to
enterprise based employment, there will be an increase in the proportion of
workers employed on a regular wage and salary basis. There has been a
decline, albeit slow, in the share of selfemployed, from 61 per cent in 1972
1973 to 53 per cent in 19992000.
The share of regular wagesalaried workers has, however, stagnated at
around 14 per cent, while that of casual workers has increased from 23 to 33
per cent. This situation has generally been interpreted to mean an increasing
casualisation of workforce. In so far as the term describes an increase in
the share of casual workers, it is factually true. But if it is meant to imply a
process of regular workers turning casual, or a decline in employment and
earnings, the trend needs to be carefully analyzed.

Employment Status by Category of Employment

19992000

self employed

199394

regular
wages/salary
workers

198788
1983
197778
197273
0 10 20 30 40 50 60 70

casual wage
workers

The shift is seen from selfemployed to casual workers category and most of
it has taken place in rural areas, from agriculture to non agricultural
activities, such as construction, trade and services. There has, no doubt,
been displacement of workers from large industries in urban areas, rendering
the regular workers to the status of casual workers. But the magnitude of
such change in status of workers has not been very significant in relation to
the total numbers involved. The phenomenon of casualisation, therefore,
needs to be seen in the overall perspective of employment trends in the
economy.
Agriculture is increasingly unable to productively absorb the
growing rural labour force. At the same time, there has been some growth of
nonagricultural activities in rural areas in construction, trade and services
which have generally offered better earnings than agriculture. Most of these
employment opportunities have been of temporary and casual nature. But
they have provided either fulltime or supplementary employment adding to
the incomes of the rural households.
On the other hand, regular jobs have hardly increased in the urban areas; in
fact, there is evidence to show that such jobs have declined due to
redundancy caused by technological and competitive compulsions in the
larger industrial enterprises. So, part of the regular workforce has been
rendered casual and most new jobs have been in the casual category.
Increasing proportion of casual workers in the total employment is thus
mostly a result of structural shifts taking place in the rural areas. To some
extent, it is distressdriven, the small and marginal landholders and the
landless not finding gainful work in agriculture and taking up whatever work
they find in the non agricultural activities, irrespective of earnings from
them. But there is evidence to suggest that many are opting for nonfarm
work due to more regular employment and better earnings. This has been
possible partly on account of various state sponsored employment
programmes, and partly because of an increase in the demand for labour in
expanding construction, trade and service activities in rural areas.

Share Of Sectors In Employment trend (The Recent Decade

Statistics)

SHARE OF SECTORS
TERTIARY
100%

PRIMARY

SECONDARY

17.42

18.18

21.5

59.84

58.44

53.2

22.73

23.38

25.3

1999-2000

2004-05

2011-12

80%
60%
40%
20%
0%

Gradual decline in the Primary Sector

Steady increase in the manufacturing sector namely manufacturing &
construction.
Significant increase in the Services sector

Employment Trends In Various Industries

Healthcare, Hospitality and IT/ITeS will create more than 7.31lacs new jobs
in the country out 1.6 million new jobs estimated to be created in the
organized sector
Healthcare -2.73lakh, hospitality over 2.30lakh and IT/ITeS are 2.27lakh

The Health Care Sector

Global healthcare and wellness is an Rs.2295000 crore industry, 2nd
largest after agro-industry.
During1990s, Indian healthcare grew at a CAGR of 16%.
By 2013, Indias healthcare sector is projected to grow to nearly
Rs.204000crore that translates to roughly 7% of GDP.

IT/ITeS Sector

The IT & ITes sector includes IT services, engineering design and R&D
services, ITES or BPO and hardware.
IT Sector accounts for 12% of the total workforce making it the largest
employer in the organized sector.
The industry is expected to grow by 19 per cent during FY 2012-13.

Employee base in the rural areas is expected to increase by over 10

times by 2013-14, compared to 5000 in 2009-10.
Real Estate & Construction
Next to Agriculture, Real Estate is the second largest employer in the
economy.
the Real Estate sector contributes around 5 % to the nations GDP.
Employs 17% of total workforce.
Despite of the global slowdown, manufacturing, have steady domestic
demand.
By 2016 the size of the Indian automobile industry is expected to grow
by 13%, to reach US$20-159 billion

Employment Trends In Rural And Urban Areas

It is interesting to note that while in aggregate urban areas have experienced
a much faster growth than the rural areas; employment has seen
significantly high growth in rural areas in most non-agricultural activities. But
since agriculture accounts for an overwhelmingly major share in rural
economy and growth in employment in agriculture has been small, overall
employment growth turns out to be low in rural areas. Aggregate
employment in rural areas grew at a rate of 2.1 per cent during 1972-73/83,
but saw a decline to 1.7 and 1.4 per cent in the two subsequent periods (As
in the TABLE below). It has declined in absolute terms during 2004-05/200910 at a rate of 1.65 per cent per annum. Urban employment growth has been
higher in all periods, but saw decline in growth rate from 4.1 during 197273/83 to 3.2 per cent during 1983/93-94 recovering slightly to 3.3 per cent
during the next period.
In the period 2005-10, urban areas recorded an employment growth of 1.8
per cent per annum. As mentioned above, employment performance of the
rural areas has been better than that of the urban areas in so far as the nonagricultural activities are concerned. Employment in all non-agricultural
activities together grew at 4.58 per cent per annum in rural areas and 4.08
per cent per annum in urban areas during 1972-73/1983; growth rates for
rural and urban areas were similar at 3.65 during 1994-2005. Only during
1983/93-94 urban growth rate was higher at 3.5 as compared to 3.2 for rural
areas.

Again, during 2005-10, rural areas did better than the urban areas in growth
of non-agricultural employment. In general, the pattern of employment
growth in terms of rates of employment growth in different activities is found
to be similar in rural and urban areas. Construction registered the fastest
growth and the growth rate has increased over the years in both rural and
urban areas. During 1993-94/2004-05, employment growth in construction
has been much higher at 8.3 per cent per annum in rural than in urban areas
at 5.6 per cent. Transport ranks second and trade third in employment
growth in rural areas. In urban areas trade has performed better than
transport, but both have registered high employment growth. Financial
services had an employment growth of 6.30 per cent in rural and 7.54 per
cent per annum in urban areas.

MNREGA: Some Observations

The story of Indias employment experience in recent years would not be
complete without a reference to the National Rural Employment Guarantee
Programme which has been in operations since 2006 under the National
Rural Employment Guarantee Act (NREGA), now rechristened as Mahatma
Gandhi National Rural Employment Guarantee Act (MGNREGA). India has a
long history of special employment programmes, especially since 1970s
when such wage employment programmes, along with subsidized selfemployment programmes were started as a part of the strategy to combat
poverty. The unique feature of the employment programmes under
MGNREGA is the provision of manual work up to 100 days per rural
household in a year, as a matter of a statutory right.
It primarily aims at enhancing livelihood security of rural households by
supplementing their income through wage employment. Side by side, it is
also expected to create infrastructure such as rural connectivity and
irrigation, enhance the livelihood and natural resource base to mitigate
poverty and environmental degradation and strengthen grass roots
processes of democracy and infuse transparency and accountability of
governance. Programmes under the Act have now been in operation for over
five years. Starting with 200 districts in 2006, they are now implemented in
all the rural districts of the country. Major outcomes of the programmes
during the first five years are summarized in table below. The programme
could be regarded as having significant achievements in terms of coverage
of households, inclusion of women and socially disadvantaged groups as well
the relevance of the types of assets created. Average number of days or
employment provided to participating households has been increasing from
year to year till 2010-11 when it reached 54. It is however; significantly lower
than maximum provision of 100 days. And in 2010-11, it declined to 47.
Averages wages per day of work stood at Rs 117 in 201-011 rising steadily
from Rs 65 in the first year (2006-07). Average earnings of participating
households from the work in the programme now are thus around Rs 5500
which is a significant addition to the incomes of poor households in rural
areas.
According to a study based on household survey earnings from NREGA work
made 15 per cent of household income in Andhra Pradesh and 12 per cent in
Rajasthan, though only 5.2 per cent in Bihar (IHD, 2011). These differences
to a large extent reflect the average number of days of employment
provided to participating households in different states.
Weaknesses identified in implementation include: non-provision of work on
demand, lack of transparency in calculating wages based on schedule of

work, non-payment of minimum wages, nonpayment of wages within

stipulated 15 days of work, use of contractors inspite of prohibition, nonpayment of employment allowance, non-provision of worksite facilities etc.
Cases of fudging of muster rolls to sell entitlements are also reported.

Employing the young

Table1: labour force participation rate of youth according to usual status

Since much is currently being made of the potential demographic dividend

that could accrue to India because of the young population bulge, it is worth
examining what is happening to employment among the youth. While
aggregate labour force participation rates have risen, the same is not true of
the youth. As Table 8 shows, labour force participation rates have fallen quite
substantially for male rural youth, and not increased for young women in
rural areas either. In urban areas, there is a slight recovery of labour force
participation rates from the low levels of 1999-2000, but only for young
women in the age group 20-24 years is there evidence of any real increase. It
is certainly possible that falls in labour force participation among the youth
result from their delayed entry into the work force, partly because they are
extending their years of education. If this is so, it would be a positive sign,
indicating a greater degree of skill formation in the young labour force of the
future. However, this is not the dominant reason. Except for rural females,
where the ratio was very low to start with, there has been very little increase
in the proportion of those reporting themselves as usually engaged in
education. For young urban females, there was actually a decline in such a
proportion.
What is more disturbing is that, despite the fact that labour force
participation rates among the young population have decreased or not
increased much (except for urban women in the age group 20-24 years),
open unemployment rates have increased. Table 2 reveals that youth
unemployment was substantially higher than unemployment across all the
working age population, and what is more it also increased across all
categories of young people men or women, rural or urban. So the youth are
far more prone to be actively seeking work and not finding it. Given that
open unemployment by usual status category has generally been low in
India because of the absence of any sort of social protection for the
unemployed, it is disturbing to note that as many as 6-8 per cent of young
rural males and 12-14 per cent of urban male youth describe themselves as
available for work and seeking it but not finding it. The proportions of young
women describing themselves as usually unemployed are even larger

Table 2: Unemployment rate among young people and overall population .

Education wise profile of workforce:

The educational profile of workers at all India is given in tables 3. The NSSO
gives detailed information about the general and technical education of
workers in the country. For our analysis, we have clubbed the general
education into three categories literate up to primary, literate from primary
to higher secondary (which includes middle level, secondary and higher
secondary); and literate above higher secondary (includes graduates in
agriculture, engineering/technology, medicine and others, and diploma
holders). It may be mentioned that a separate category of higher secondary
did not exist in 38th and 43rd rounds. It is, therefore convenient and prudent
for comparison purposes that these categories be combined. It is observed
from Table 3 that there is a general tendency of a decline in the share of upto
primary workers in the five rounds and a corresponding increase in the share
of educated (i.e. literate from primary to higher secondary and above higher
secondary workers). The fall in the proportion of upto primary literate is quite
substantial and is 17 percentage points. The percentage of persons with

higher education (above Higher Secondary) has increased from just around 2
percent to more than 7 percent, i.e. by three and a half times. It is very
evident that the proportion of more educated workers in India is consistently
increasing over the period. Fig 1 shows the distribution of educational
attainment of the work force over the period.

Table 4 provides the number of days employed per week by education level.
Days employed per week have been calculated from the current daily status
and current weekly status information of the workers. It is evident from the
Table that the average number of days worked by workers has consistently
ncreased over the years from 5.24 days to 5.68 days at an average annual
growth rate of 0.39 percent. Along with an increase in the number of
persons, the increase in the number of days has contributed to the increase
in labour input. However, the increase in number of days is not uniform
across all education categories. The increase is maximum for the most
educated category and minimum for the least educated category. The reason
could be again demand induced.

Table3: percentage distribution of workforce by education categories.

Ta
ble 4: No. of days employed per week by education level.

Structure Of Employment

Table 5: Distribution of workers by employment category.

An aspect of employment trends and structure that is of interest in a
developmental context is the distribution of workers by employment
category in terms of self-employed, regular wage and salaried workers and
casual wage earners. Table 5 shows that till 2004-05 India witnessed
predominance of self-employment and increase in the share of the casual
category of workers (except for Urban females). The latter was generally
referred to as increasing 'casualisation' of workforce .NSS results reveal that
the trend of increasing casualisation continues from 2004-05 to 2009-10
across all the sections (Urban/Rural & sex wise ).

Only 15.6 per cent of the total workforce had regular wage employment/
salaried work during 2009-10 while 33.5 per cent was casual labour and 51
per cent was self-employed.
Over the years, a shift is seen from self-employed to casual workers
category and most of it has taken place in rural areas, from agriculture to
non-agricultural activities, such as construction, trade and services. To some
extent, it is distress-driven, the small and marginal landholders and the
landless not finding gainful work in agriculture and taking up whatever work
they find in the non-agricultural activities irrespective of earnings from them.
But there is evidence to suggest that many are opting for non-farm work due
to more regular employment and better earnings. This has been possible
partly on account of various state sponsored employment programmes, and
partly because of an increase in the demand for labour in expanding
construction, trade and service activities in rural areas. In other words,
casualisation of the nature observed does not necessarily imply a
deterioration in the quality of employment. A small part of the real
casualisation, however, that has taken place due to displacement of regular
workers from large enterprise in the urban areas, no doubt, indicates such
deterioration.
Most of the regular salaried/ wage job openings have been in Urban areas
where the proportion of regular wage /salaried employees is considerably
higher. But even in case of male workers in urban areas, the share of casual
employment has increased
As per reports of 2004-05 about 86 per cent of total jobs in India are in
informal sector (All household enterprises having less than equal to five

workers are treated as informal sector. The informal sector is taken to be a

subset of household sector, in accordance with the concepts of 15th ICLS )
whereas informal jobs account for about 95 per cent of all jobs.
Preponderance of the workforce in the sector with symptoms of informality
such as deprived job- security, tenurial security, guard against arbitrary
dismissal, safety in work-profile, social security benefits etc calls for putting
adequate safety measures for workers in place but according to some the
rigidity of many of these regulations are to be blamed for poor organised
employment in the first place.

Challenges to Modern Labour Market

Fall in manufacturing employment:
More importantly, this was not merely an expansion of output, but an
impressive growth in employment too. More than three million new jobs were
generated in Indias organized manufacturing between 2004-05 and 200910. That was in marked contrast to the near jobless growth that
characterized this sector for the two-and-a-half decades since the 1980s.
Indias organized manufacturing rebounded impressively after it slowed
down during 2007-09 at the height of the global economic crisis. The
recovery was led in particular by the auto industry, with the domestic
production of passenger cars rising from 1.5 million in 2008-09 to 1.9 million
2009-10.
But that revival seems to have been short-lived. Indias automobile industry
has entered a phase of stagnation, and so too has organized manufacturing
as a whole, as shown by the recent numbers on IIP growth.
Employment and unemployment surveys conducted by the National Sample
Survey Organisation (NSSO) shows that the total manufacturing employment
in the country declined absolutely, by three million, between 2004-05 and
2009-10. It is to be noted that this decline in overall manufacturing
employment occurred despite a revival in employment in the organized
sector. Clearly, it points to a sharp absolute fall in unorganized
manufacturing employment in the country by the late 2000s.

The latest NSSO survey indicates some revival in manufacturing employment

betwee2009-10 and 2011-12. Nevertheless, the survey shows that the
generation of unorganized manufacturing employment in India has
decelerated markedly: from 12.6 million new jobs between 1993-94 and
2004-05 to just a little over a million new jobs between 2004-05 and 201112.
While capital- and skill-intensive industries such as metals, petrochemicals
and automobiles dominate organized manufacturing, Indias unorganized
manufacturing consists mainly of labour-intensive industries such as food
products and textiles. The deceleration in Indias labour-intensive industries
began in 2006-07. The appreciation of the Indian rupee that occurred during
this time affected the growth of export-oriented industries such as textiles,
garments, leather, and gem cutting. As the global economy plunged into a
crisis by 2008-09, these industries were hit further, by the downturn in
export demand from Western countries, resulting also in large-scale job
losses. Further, the growth of Indias textile industry has suffered due to the
volatility and the generally high level of cotton prices in the country since the
late 2000s.

Other challenges:
Labour market inequalities are large and disparities and inequalities have
generally increased. The most striking is the disparity between the
regular/casual and organized/ unorganized sector workers: the average daily
earnings of a casual worker stood at ` 138 in rural areas and ` 173 in urban
areas in 2011-12, and that of a regular worker at ` 298 in rural areas and `
445 in urban areas, while that of a central public sector enterprise employee
was ` 2,005 per day. And, of course, the public sector employee has many
other benefits as well as a secure job. Thus, a rural casual worker earned less
than 7 per cent of the salary of a public-sector employee.
The gap between per-worker earnings in agriculture and non-agriculture
has considerably widened and now stands at a ratio of 1: 6. The share of
wages in total value-added in manufacturing has been declining consistently.
From around 0.45 in the 1980s, it has fallen to around 0.25 in 2009-10. The
shift from wages to profits is large, and is closely connected with acceleration
of growth in recent years. Thus, there is substantial shift towards income
from capital, contributing to the overall increase in income inequality.
There has been increasing informalisation of the workforce. The transfer of
workers from agriculture to non-agriculture has been slow, with some
acceleration in recent years, but most of the employment generated has
been informal and insecure. To illustrate, the percentage share of contract

workers in organized manufacturing sector has increased from 13 per cent in

1995, to 34 per cent in 2011. The growth of regular, protected jobs is also
slow.
There is considerable regional differentiation in access to good quality
employment. A preliminary Employment Situation Index (ESI) prepared for
this Report shows that generally workers in the southern and western states
of India have much better access to good quality employment than do
workers in states in the central and eastern regions. Himachal Pradesh ranks
number one, in particular because of a good performance with respect to
womens employment, while Bihar ranks last
To summarize, while the three decades of rapid growth have not radically
transformed the labour market and employment conditions in the country, it
has brought fairly substantial improvements. Nevertheless, low productivity
employment in both agriculture and other sectors continues to dominate the
labour market, and the disparities and inequalities across groups and regions
remain large.

Employment trends for women in India

A countrys economic development crucially depends upon the participation
rates of its women as they constitute around 50 percent of its human
resources (NIPCCD, 2010).Not only that, womens participation in the
workforce as compared to men is also an important determinant of their
social status. Womens employment is crucial for raising their living
standards and well-being. However, economic well-being and welfare of
women may not improve if they are engaged in low-paying distress-driven
work. Womens participation in the workforce assumes more importance in
the case of developing countries. This is because of its positive effects on the
level of output and negative effects on population growth. In this document
NSS reports of the 43rd (1987-88), 50th (1993-94), 55th (1999-2000), 61st
(2004-05), 66th (2009-10) and 68th (2011-12) rounds have been used to
look at the trends and patterns of female workforce participation in the rural
and urban areas

Trends in Employment
Post-independence, the issue of employment has had different resonance
during different Plan periods. In the initial years of development planning,
unemployment was not expected to emerge as a major problem. It was
assumed that reasonable growth rate and labour intensive sectors would
prevent any increase in unemployment and this expectation continued from
one Five Year Plan to another during the 1950's and 1960's. However, the
economy grew at a slower pace (around 3.5 as against the planned rate

of 5 per cent per annum) and the labour force grew more rapidly than the
increase in employment , doubling the unemployment figures during 19561972, from around 5 to 10 million and increasing the unemployment rate
from 2.6 to 3.8 per cent (Papola,1992).
The observations based on statistical findings that are of note in this context,
especially of women workers, is that the sheer number of women workers
has gone up. Some of them have also entered job profiles that have the
potential for challenging stereotypical gender roles. The kinds of
employment women are undertaking, especially in urban metropolises, have
a demonstration effect, changing the aspirations of many young entrants
into the labour market as well as bringing alterations in the perceptions and
attitudes of their guardians. Society also seems to be receiving such changes
well, albeit with some hiccups in certain domains. Given its large population
size, India continues to wield a distinct demographic advantage which will
continue for some more years to come. Interestingly, although growth of
population with declining fertility rates has been slowing down over time,
there has been corresponding growth in workforce from 1983-94 to 2000-05
(see table 1). This implies that relatively larger proportions of the population
are joining the workforce. This is not only an outcome of the increasing
availability of persons to undertake work and their willingness to do so, but
also partly due to the enhancement of work opportunities.

YEAR

RURAL
1983-94
1994-2000
2000-2005
URBAN
1983-94
1994-2000
2000-2005

GROWTH
OF GROWTH
OF
POPULATION (%)
WORKFORCE (%)
FEMALES
FEMALES
1.73
1.72
1.39

1.09
0.35
2.81

3.12
2.82
2.48

3.03
1.46
5.66

Types of Female Employment

There has been a continuous rise in the regular employment since the 43rd
round. It has increased from 27.5 percent in the 43rd round to 42.8 percent
in the 68th round. This increase is positive development since regular

employment means better working conditions and higher incomes. Selfemployment of urban females has also witnessed an increase during 61st
round, after remaining more or less constant for the last two rounds. On the
other hand, casual employment of urban females has continuously declined
from 25.7 percent in the43rd round to 14.3percent in 68th round except a
marginal increase in the 61st round in comparison to the earlier round.
Overall, the decline in casual employment and increase in regular
employment of urban females is a promising development.

URBAN FEMALES
ROU REGUL
NDS AR
EMPLO
YMENT
43r 27.5
d
50t 28.4
h
55t 33.3
h
61st 35.6
66t 39.3
h
68t 42.8
h

SELFEMPLO
YMENT

RURAL FEMALES
REGUL
AR
EMPLO
YMENT
3.7

SELFEMPLO
YMENT

47.1

CASUA
L
EMPLO
YMENT
25.4

60.8

CASUA
L
EMPLO
YMENT
35.5

45.8

25.8

2.7

58.6

38.7

45.3

21.4

3.1

57.3

39.6

47.7
41.1

16.7
19.6

3.7
4.4

63.7
55.7

32.6
39.9

42.8

14.3

5.6

59.3

35.1

In contrast to urban females, there has been marginal increase in regular

employment of rural females in the recent years after a slight decline during
the 50th round. It has increased from 3.7 percent in 43rd round to 5.6
percent in the 68th round that means that stable employment opportunities
exists. Employment of rural women has remained more or less stable during
the entire period except a slight dip during the 61st round. This marginal
increase in regular employment and constancy of casual employment needs
examination at length. Similarly, self-employment of rural women does not
show any systematic pattern. It is erratic in nature.

Female Sectorial Employment

The proportion of urban women engaged in agriculture has gradually
declined over time from around 29 percent in the 43rd round to around 11
percent in the 68th round. This sharp decline over this 24-year period from
1987-88 to 2011-12 is very much expected in the context of structural
transformation following the economic reforms of 1991.
About 84 per cent of workers are in the unorganized or informal sector and
more than 90 per cent in informal employment (taking formal and informal
sectors together). As per NSS reports on Informal Sector and Conditions of
Employment in India, 2011- 12, about 97 per cent of the self-employed, 78
per cent of the casual labourers and 42 per cent of the regular wage/salaried
employees in the rural areas were employed in the informal sector whereas
about 98 per cent of the self-employed, 81 per cent of the casual labourers
and 40 per cent of the regular wage/salaried employees in the urban areas
were employed in the informal sector. Among workers in agriculture sector
excluding growing of crops, plant propagation, combined production of crops
and animals without a specialized production of crops or animals ( AGEGC)
and non-agriculture sectors, about 72 per cent were employed in the
informal sector - the proportion was about 75 per cent in rural areas and
about 69 per cent in urban areas.

URBAN FEMALES

RURAL FEMALES

ROU AGRICU MANUFAC SER AGRICU

NDS LTURE
TURING
VIC LTURE
S
rd
43
29.4
27
27. 84.7
8
th
50
24.7
24.1
35
86.2
th
55
17.7
24
34. 85.4
2

MANUFAC SERV
TURING
ICES
6.9

3.7

7
7.6

4
4.3

61st

18.1

28.2

66th

13.9

27.9

68th 10.9

44

35.
9
39.
3
55.
1

83.3

8.4

4.6

79.4

7.5

5.7

74.9

16.7

8.3

Educational Status Of Women

Table below shows the educational levels of working urban and rural women.
The education level is divided into 6 categories: not literate, literate and up
to primary, middle,
Secondary, higher secondary, and graduate and above. In urban areas,
WPR is higher for illiterate females than for females with higher levels of
education except graduates. For the 66 th round, 23 percent of illiterate urban
women are employed, but this is only 15 percent and 9 percent for women
who have middle and higher secondary education.

In the case of urban females with graduate and above level of education, the
WPR declined from around 32 percent in the 43rd round to 29 percent in the
61st round and then to 27 percent in the 66th round.

This indicates that urban woman finding employment are less educated and
are probably finding work in low paying unskilled jobs that do not require
much education. Even for rural women, WPR is higher for illiterate females
than for females with higher levels of education. In the 66th round, around
43 percent of the illiterate rural women are employed, whereas this is only
18 percent and 29 percent respectively for women who have higher
secondary and graduate level of education. Like urban women, WPR of rural
women with secondary, higher secondary and graduate and above level of
education have also declined from 50th round to the 66th round. This implies
that a lesser number of educated and skilled rural women are participating
than earlier and most of them finding work in low paying unskilled jobs.

Wages Paid To Women

The table below shows the average wage of regularly employed for men and
women in rural and urban areas from 1993-94 to 2011-12.It is clear from this
Table that the absolute wage differentials between rural and urban women
have widened over time. During 1993-94, rural women had an average wage
of Rs 35 while urban women had an average wage of Rs 62 and the
corresponding figures for 2011-12 are Rs. 201 and Rs. 366 respectively.
Thus, it becomes clear that wage differentials for rural and urban women
have not narrowed down during the study period. There are also problems
like lesser number of days of work for females and receiving less than the
minimum stipulated wages (Srivastava &Srivastava, 2009; NCEUS, 2007). In
contrast to females, the wage disparities in case of males are less striking.
Therefore, female workers are in a worse-off position in terms of wage
earnings in comparison to the male workers. In the category of female
workers, rural females are relatively worse off. Thus, there is an urgent need
for governmental policy to improve the average earnings of rural women and
reduce these disparities.

State Level Employment Scenario

Table below shows urban female WPR in different states during 1993-93 to
2011-12. Among major states-Tamil Nadu, Andhra, Kerala, Rajasthan and
Maharashtra show higher than all-India average participation rates for the
urban females. On the other hand, Assam, Bihar, Uttar Pradesh, Gujarat,
Haryana, Punjab and M.P. have female WPR lower than the national average.
West Bengal and Orissa show WPR coincide with the all-India average. Only
three states Andhra, Kerala and Tamil Nadu have female WPR higher than the
level of 20 percent. Almost all states have experienced a fall in urban female
WPR during 66th round, 2009-10. The reasons for this fall at the state-level
and national-level needs detailed examination.
However the global recession could be one of the possible reasons for this
decline in WPR. Except Bihar, Assam, and Kerala, all states experienced an
increase in the urban female WPR from 55th round to the 61 st round the
increase is more significant in states like Andhra, Tamil Nadu, Maharashtra,
and West Bengal. The WPR of both rural and urban females declined
between 61st and 66th round. However, this trend was reversed in the
subsequent 68th round.

The female workers have much lower participation rates than their male
counterparts and hence comprise a marginalized section. The share of rural
women in the workforce is much higher than those in urban. However,
women in rural India are clearly in an inferior position in the labour market
vis--vis their urban counterparts. This is evident from the fact the most of
the rural women are casually employed and are engaged in low-paying
agricultural work. During 2011-12, more than 35 percent of rural women are
casually employed while this figure stood for less than 15 percent for urban
women. This implies that most rural women work long hours in poor working
conditions. Moreover, most of the rural women are predominantly engaged in
agriculture where earning opportunities are low.
On the other hand, the proportion of urban women engaged in in agriculture
has been rapidly declining. And most of the urban women are finding work in
services sector. The wage differentials between rural and urban women are
also striking. Rural women earn considerably lower wages than urban
women, and the disparities have not shown any tendency to decline. It has
been observed that both in urban and rural areas, WPR are higher for

illiterate females than for females with higher levels of education in general.
This implies that a lesser number of educated and skilled women are
participating than earlier, and most of them are getting work in low paying
unskilled jobs. State-wise female WPR reveals that southern states like Tamil
Nadu, Andhra Pradesh, Karnataka, Maharashtra, and Kerala have
participation rates higher than the all-India level. Wide interstate disparities
are observed with respect to female WPR for rural and urban females.
Several important policy implications emerge out of the above analysis.
There is an urgent need to provide education, training and skill development
programmes for women that would help in raising their productive potential.
It is also important to focus on the provision of secondary and higher
education that gender differential also in the labour market. Therefore, the
study suggests appropriate government intervention along with policy
formulation for addressing the issue.

CONCLUSION
What are the prospects for growth and quality of employment in India in near
future? The fact that a high rate of economic growth has not been able to
generate high employment growth, and it has, in fact, been accompanied by
a slow down in employment growth in recent years, has led many
economists and others concerned to portray the recent experience as one of
jobless growth. A brief account of the performance of different sectors as
attempted earlier, however, shows that but for the almost negligible growth
in agriculture, employment growth in nonagricultural sector has not really
been jobless. Yet, employment elasticities have declined in most sectors,
though in some sectors like construction, trade and transport, they continue
to be relatively high. And a faster growth of these sectors will lead to an
increase in overall employment growth. Their share in employment, however,
is still small as compared to manufacturing which have shown a relatively
low employment growth and low and declining employment elasticity. Yet,
manufacturing still has an employment elasticity of around 0.3 and there are
indications to suggest that it may improve. For example, its exportoriented
subsectors have recently experienced higher employment growth and
employment elasticity. During the 1990s employment in the exportoriented
industries grew at 3.36 per cent per annum and showed an employment
elasticity of 0.48 (Goldar, 2003). A faster growth of manufactured exports,
which now constitute over 75 per cent of total exports, as compared to 58
per cent in 1980, therefore, promises to be an important factor in reversing
the declining trend in employment growth. Employment growth is a function
of growth of GDP and employment elasticity. Indian economy has sustained a
relatively high growth of over 6 per cent for about two decades and is
expected to grow at that, if not a higher, rate in coming years. There are
indications towards reversal of the declining trend in elasticities, particularly
in manufacturing and expectations of a growth structure in which sectors
with higher employment elasticity will grow faster. Thus overall employment
elasticity is likely to increase from the low of 0.15 experienced during 1994
2000. There is, therefore, a strong likelihood of growth rate of employment
getting restored to over 2 per cent during the first decade of this century. In
fact, the evidence from the limited sample survey of the NSSO suggests a
reversal of the trend already during the 20002004 when employment
growth is estimated to be around 2.70 per cent. This, however, is still to be
validated by the results of the larger sample survey (GOI, 2005b). The recent
experience, however, suggests that most of the new employment
opportunities are likely to be generated in the unorganized sector and will be
characterized by poor conditions of work, and lack of employment and social
security. Even within the organized sector an increasing number of workers

are being employed in a flexible manner on casual or contract basis,

without the social security benefits available to regular workers. And, also,
the problem of the working poor, namely, of those fully engaged in work,
but earning less than the poverty line income, will persist. Thus the challenge
of quality of work, in terms of earnings and social security will continue.
Tightening of the labour market with increase in the demand for labour may
lead to improved earnings over time, but a vast majority of workers will
continue to have no social protection against the risks of work related
hazards, unemployment, sickness and maternity and old age. A measure of
security against these risks is currently available to the workers in the
organised sector. With a decline in its share and increase in that of the
unorganized sector, the share of the unprotected workers will increase.
Provision of a minimum social protection to this large mass of workers is,
therefore, likely to emerge as a much greater challenge than of expanding
employment opportunities. It will require special attention of the state and
society at large in coming years, as the market driven high growth even if
accompanied by an expansion in employment opportunities may not by itself
be adequate to address the issue of social protection.

BIBLIOGRAPHY
Goldar,
B.N.
(2003):
Trade
Liberalisation
and
Manufacturing Employment: The Case of India,
Employment Paper 2002/3,4, Geneva, International
Labour Office.
GOI (2005a), Economic Survey, 20052005, Government
of India, Ministry of Finance, Economic Division.
GOI (2005b): Employment and Unemployment Situation
in India: JanuaryJune, 2004, Government of India,
National Sample Survey Organisation, Report No. 506.
Papola, T.S. (1992): The Question of Unemployment, in
Bimal Jalan (ed.) The Indian Economy: Problems and
Prospects, New Delhi, Viking, Penguin Books India (P) Ltd.
The NEHU Journal, Vol XIII, No. 2, July-December 2015,
pp-17-30
Indias labour market during the 2000s: Surveying the
changes By
JJ THOMAS