IIT DELHI

HUC 722
Analysing The Employment Picture in India(As per NSS Data)

09/05/2012

Students Prakhar Dargar (2009EE10407) Siddhartha Das (2009EE10418)

Project Supervisor Prof. Jayan Thomas

Table of Contents
1. Aim 2. Introduction 3. Methodology 3.1 Definitions and Related Terms a) Activity Status b) Category Codes in the Broad Industry Division 4. Approach 4.1 Distribution of people in the different activity status. 4.2 Distribution across expenditure classes for major population categories. 4.3 Distribution across expenditure classes for a particular activity status. 4.4 Data plots 5. Estimating Poverty Using the Employment Data 6. Salient Features of the Employment Scenario in India during the recent years 6.1 Employment Structure 6.2 Casualization 6.3 Participation of Females in the Labour Force 6.4 Education and Employment 6.5 Quality of Employment 6.6 Economic Inequality 7. Future Prospects 8. Conclusion 9.References HUC 722 Project Report Page 1

1.Aim
To study and analyse the distribution of persons (rural male, rural female, urban male and urban female) under different employment statuses on the basis of their household monthly per capita expenditure to understand the employment situation in India and to draw some parallel inferences on the condition of Indian economy using NSS data tables on employment in India.

2. Introduction
Employment has featured as an important item in the development agenda in India. Approaches to the subject have, however, varied in different periods over the last 50 years. In the initial years of development planning, unemployment was not expected to emerge as a major problem; yet care was taken to see that employment of a reasonable magnitude is generated in the development process to productively employ the growing labour force. A reasonably high rate of economic growth combined with an emphasis on labour intensive sectors like the small scale industry was envisaged to achieve this goal. The rate and structure of growth rather than technology were seen as the instruments of employment generation. Unemployment was estimated to be relatively low, as was also the growth rate of labour force, and a targeted economic growth rate of 5 per cent with some emphasis on labour intensive consumer goods sectors, was expected to generate large enough employment over the years to prevent any increase in unemployment figures. Meanwhile magnitude and rate of unemployment increased significantly. In 1950s, economy grew at a rate of around 3.5 as against the planned rate of 5 per cent per annum. Yet, employment grew at a rate of 2 per cent per annum. However, since labour force growth was much higher at 2.5 per cent as against less than 2 per cent per annum assumed, the result was an increase in unemployment. Magnitude of unemployment had almost doubled during 19561972, from around 5 to 10 million and unemployment rate from 2.6 to 3.8 per cent (Papola, 1992). These figures are, however, only approximations. They, nevertheless, do indicate the overall trends during the first two decades of planned development in India. With the availability of comprehensive data on levels of consumption, employment and unemployment which revealed high incidence of poverty and high unemployment rates, the official approach to employment problem underwent a change in mid-1970s . The Fifth Five Year Plan (1974-79) sought to address the employment issue by reorienting the pattern of HUC 722 Project Report Page 2

growth in favour of employment intensive sectors. At the same time, a strong opinion was emerging to suggest that growth alone cannot solve the problems of poverty and unemployment, and therefore, a number of special employment and poverty alleviation programmes were launched. They were mostly of two kinds: providing financial and other assistance for productive self-employment, and offering supplementary wage employment to the underemployed. Over the years, these programmes have been continued in one form or the other, have been modified or integrated, new ones have been started while some old ones have been discontinued. The latest in the series is the National Rural Employment Guarantee Programme (NREG) which aims at legally guaranteeing employment of up to 100 days annually to every rural household, under an Act of Parliament. Thus the employment challenge in India consists not only of creating jobs for the unemployed, and providing additional work to the underemployed, but, to a much larger extent, of enhancing productivity and income levels of a large mass of the working poor. There is also a gross mismatch between the quality and type of job opportunities available and the expectations of many educated job seekers. At the other end of the labour spectrum, it is increasingly difficult to obtain workers with basic skills in carpentry, masonry, electronics, mechanics, and many other trades. The phenomenon of a deceleration in the rate of employment growth with higher economic growth in recent years has been particularly highlighted and commented upon. Some structural and qualitative dimensions of the Indian employment scene are also indicated. They include a slow change in employment structure by sectors of economic activity. We have also tried to analyse the distribution of the labour force, both in rural and urban India, in the different activity status and in different expenditure classes. We have also looked into the predominance of selfemployment, increment in the share of the casual category of workers, predominance of the unorganised sector and stagnation and decline in the organised sector employment and the question of quality of employment which seem to have undergone deterioration, in general, in recent years.

3. Methodology
The National Sample Survey Organisation conducts nationwide sample surveys on various socio-economic issues. The results of these surveys are released in the form of various reports, which are mainly based on tabulation of data. We studied the National Sample Survey data available on the Per 1000 distribution of persons usual activity category taking HUC 722 Project Report also into consideration the subsidiary economic status of persons categorised 'not working' Page 3

for each household monthly per capita expenditure class. Primarily, we used the following three reports prepared by National Sample Survey Organisation, Ministry of Statistics & Programme Implementation, Government of India. 1. Employment and Unemployment Situation in India 1999-2000 , Report No. 458(55/10/2), (July 1999 June 2000) 2. Employment and Unemployment Situation in India 2004-05, Report No. 515(61/10/1), (July 2004 June 2005) 3. Employment and Unemployment Situation in India 2009-10, NSS Report No. 537(66/10/1), (July 2009 June 2010). We have taken monthly expenditure as the background to identify the situations of different employment sectors.

3.1 Definitions and Related Terms a) Activity status

It is the activity situation in which a person was found participated in economic and noneconomic activities during the reference period. According to this, a person could be in one or a combination of the following three broad activity statuses during a reference period: (i) working or being engaged in economic activity (work) as defined above, (ii) being not engaged in economic activity (work) but either making tangible efforts to seek 'work' or being available for 'work' if 'work' is available and (iii)being not engaged in any economic activity (work) and also not available for 'work'. The detailed activity statuses under each of the three broad activity statuses (viz. employed, unemployed and not in labour force) and the corresponding codes used in the given report and the NSSO data are given below:

Self-employed 11 worked in household enterprises (self-employed) as own-account worker 12 worked in household enterprises (self-employed) as an employer 21 worked in household enterprises (self-employed) as helper Regular wage/ salaried employee HUC 722 Project Report Page 4

31 worked as regular wage/salaried employee Casual labour 41 worked as casual wage labour in public works other than Mahatma Gandhi NREG public works 42 worked as casual wage labour in Mahatma Gandhi NREG public works 51 worked as casual wage labour in other types of works 61 did not work owing to sickness though there was work in household enterprise 62 did not work owing to other reasons though there was work in household enterprise 71 did not work owing to sickness but had regular salaried/wage employment 72 did not work owing to other reasons but had regular salaried/wage employment Not working but seeking/available for work (or unemployed) 81 sought work or did not seek but was available for work (for usual status approach) 81 sought work (for current weekly status approach) 82 did not seek but was available for work (for current weekly status approach. Neither working nor available for work (or not in labour force) 91 attended educational institutions 92 attended to domestic duties only 93 attended to domestic duties and was also engaged in free collection of goods (vegetables, roots, firewood, cattle feed, etc.), sewing, tailoring, weaving, etc. for household use 94 rentiers, pensioners, remittance recipients, etc. 95 not able to work owing to disability 97 others (including beggars, prostitutes, etc.) 98 did not work owing to sickness (for casual workers only) 99 children of age 0-4 years By subsidiary economic activity, we mean the economic activity, which was pursued for a relatively minor period but not simultaneously with principal activity.

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b) Category Codes in the Broad Industry Division Codes 01-05 10-14 15-37 40-41 45 50-55 60-64 65-74 75-99 Broad Industry Division Agriculture Mining and Quarrying Manufacturing Electricity, water, etc Construction Trade, Hotel &Restaurant Transport Financial and business activities Public administration, education, communication services, etc.

4. Approach
We have done our analysis on the Per 1000 distribution of persons usual activity category taking for each household monthly per capita expenditure class separately for rural male, rural female, urban male and urban female for three NSS sample rounds in order to bring out the urban-rural contrast and male-female contrast. Our focus areas were: 1. Distribution of people in the different activity status. 2. Distribution of people across different expenditure classes for a particular activity status. 3. Absolute number of people in different expenditure classes.

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4.1 Distribution of people in the different activity status.

Here, for a particular activity status, we added up the number of people belonging to different expenditure classes, across all the industry and plotted the same for three different sample years.It should be noted that the above numbers are not absolute numbers and hold only relative significance.

1- Self-employed 2- Regular wage/ salaried employee 3- Casual labour 4- Unemployed 5- not in labour force The trend of the number of rural males in the different activity status is more or less the same for the years -1999-00 and 2004-05. But we find a slight decrease in the number of rural males in the self-employed category for the year 2009-10. This may be primarily due to the increasing importance of services and construction as a source of employment for rural males in India. Within the services sector, trade, hotels and restaurants, and transport and communications have been the activities that created a large part of new employment in India for rural males.

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With respect to the rural females, an interesting trend is observed. The number of rural females in the self-employed category increased in the year 2004-05, with respect to 199900. In fact, between 1999-2000 and 2004-05, the number of rural females who reported their activity status as attending to domestic duties fell. During the same period, the number of rural females who were self-employed in agriculture increased. It appears that large numbers of rural females, who had earlier been attending to domestic duties, were compelled to join the ranks of the self-employed in agriculture during the first half of the 2000s. This employment growth had been distress driven, rather than growth driven as the GDP growth in agriculture in India was statistically insignificant during the period 19992005.

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With respect to urban males, we see that the proportion of the participants in the selfemployed category in the year 2004-05 has been more as compared to 1999-2000 and 20092010. Further, we can see that the number of urban males who became regular workers in the year 2009-2010 was less as compared to the other two sample periods. One very significant factor that played an important role amongst this category is education. Educational achievements, not just increase in the literacy rate have been the highest among urban males. Similarly, the advent of services sector, along with construction, etc. also provided a lot of opportunities to the urban male.

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Between 1999-2000 and 2004-05, the urban female population of India increased by 16 million, which included 8 million women with at least secondary school level education and 3 million women with graduate degrees or above. However, a major chunk of the countrys urban female population stayed out of the labour force and was engaged in domestic duties. Notably, the proportion of women who attend to only household work in the incremental population (during 1999-2005) is much higher in urban areas than in rural areas. This proportion is also relatively high among those who are better educated. During the period 1999 2000 to 2004-05, as the population of urban women with graduate degrees or more increased by 3.2 million, 1.7 million of them reported their activity status as attending to domestic duties. Also, between 1999-2000 and 2004-05, urban females accounted for half of the net increase in new jobs in community, social and personal services. In rural India, the share of the self-employed rose sharply in 2004-05, as compared to 19992000. Simultaneously, the rise in the share of casual labourers fell in 2004-05. As for the regular wage workers, after a decline in its share, the share of regular age workers registered a small rise. In urban India, the share of the self-employed records a sharp rise with an off-setting decline in the share of the casual labourers. The share of the regular wage workers slips down fractionally to be just above its share in 1993-94.

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By gender, the rise in the share of the self-employed (and the offsetting fall in the share of the casual labourers) between 2000 and 2005 is sharper for females than for males. Over the same period, the share of regular wage workers in female work force also records a significant rise while, for male workers, the rise in the share of regular wage workers, while present, is more subdued. The growth of regular wage-salary workers, (Sundaram, 2007), is a good indicator for tracking the growth of jobs in the country. In the country as a whole, the number of regular wage/salary workers has increased by a little over 10.7 million in the five years separating the 2004-05 and 2009-2010.

4.2 Distribution of total number of people in the different expenditure classes for all the major population categories
For calculating the total Number of people in the each of the expenditure classes, we have taken the Actual NSS data of the absolute population of rural male , rural female , urban male and urban female. We are given the per 1000 distribution across various expenditure classes . Hence we obtained the actual number of people in a particular expenditure class by simple interpolation using unitary method. The actual population data is the following:

NSS 66th Round: NSS K1: Key Indicators of Employment and Unemployment in India, July 2009-June 2010 Estimates of Population 1983 1993-94 Rural Males Rural Females Urban males Urban Females July 28 2009-10 Population based on population estimate as on 1 January 2010 as given in Appendix C of NSS Report2009-10 281288 26663 91217 80445 339642 319411 124031 111104 1999-2000 374432 353785 145878 131244 2004-05 400865 379102 164732 148332 2009-10 423886 400852 183831 165502 in '000s

Source: Table 1 of Sundaram (2007), Employment and Poverty in India, 2000-2005, EPW,

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Rural Male & Rural Female : The number of people in the higher expenditure classes (610) has increased in the year 2004-2005, as compared to 1999-2000. Also, the number in the lowest expenditure class (1-2) has decreased a lot. In 1999-2000, significant part of the population was in the lower side of the expenditure class (3-6), whereas in 2004-05, it has been opposite. But still there has been no significant change in the number of people in the highest expenditure class (11-12).

Ru ral Male

Rural Female

Urban Male and Urban Female: A significant difference here with respect to the plots of Urban male and female has been that the number of people in the highest expenditure class has seen quite an improvement in the year 2004-05. The increment is significant. This may be because of the varied number of opporunities available in the urban areas. The curves for HUC 722 Project Report Page 12

both 1999-2000 and 2004-05 tend to follow the same pattern, with majority of the population in the middle expenditure class (4-9).

Urban Male

Urban Female

Employment of the household members is highly related with household income and in HUC 722 Project Report

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turn, with the household monthly per capita expenditure (MPCE) a close proxy for household income. It is evident from the graphs above that the participation of workers, particularly for the males, is found to increase steadily with the increase in MPCE of households, in the rural areas, except in the higher classes. But for the females, the pattern is somewhat different. On the other hand, in the urban areas, a declining pattern over the MPCE classes is observed in the Worker Participation rates in the case of female workers except highest class. The sex ratio among workers over the MPCE classes reveals that compared to the richer households, more number of females than the males belonging to the households of lower MPCE classes, particularly in the rural areas, had to work.

4.3 Distribution of people across different expenditure classes for a particular activity status

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It is seen that in the rural areas, the proportion of casual labourers is found to be higher in the lower MPCE classes and lower in the higher MPCE. On the other hand, the proportion of both self-employed and regular salaried employees is found to be lower in the lower MPCE classes and higher in the higher MPCE classes. In the urban areas, the pattern is a little different. While, as in the case of rural, the proportion of casual labourers is found to be higher in the lower MPCE classes and lower in the higher MPCE and the proportion of regular salaried employees increases substantially with increase in MPCE, the proportion of self-employed decreases with the increase in MPCE. We see a sharp-growth in selfemployment and the reduction in the share of casual labour, with the proportion of Regular Wage/Salary Workers not showing much of a variation-except for urban females who show a rise in the share of such workers. HUC 722 Project Report Page 18

5. Estimating Poverty Using the Employment Data

The following discussion assumes consumption expenditure to be the measure of individual welfare, and hence the variable in terms of which absolute poverty is measured. The minimum consumption expenditure is defined as the expenditure required consuming 2,400 to 2,100 calories per capita per day. The consumer expenditure data of the 55th Round yields a poverty ratio for 1999-2000 of 27.09% in rural areas, 23.62% in urban areas. The all-India poverty lines updated for 2004-05 were Rs. 356.30 in rural areas and Rs.538.60 in urban areas, per capita per month. More than a quarter of Indias population remain below PL in 2004-05. 28.3% Rural 25.7% Urban 27.5% Total And the absolute number calculated according to the absolute number of people in the classes with expenditure less than standard bpl data is : 302 million in 2004-05. Consumption expenditure of Rs.850.5 & Rs. 672.5 in urban and rural areas respectively is above the poverty line, 2009-10. The absolute number of poor Indians in 2009-10 is expected to be 433 million. By applying simple unitary method, we could infer and could calculate the absolute number of working poor Indians which would match the data obtained in economics data from reliable sources.

How did we calculate Poverty estimates?

For rural m ales, the absolute number in decile classes 3,4,5,6 (which lie within poverty level of Rs356) is 32+36+86+103=257 persons per 1000. Using absolute rural male population data equal to 400865000. Hence total number of rural male = 257/1000 * 400.8 = 103 million are bpl (below poverty line) rural males. In a similar manner, number of rural females = 272/1000 *379.1=103 million. For urban male and female the poverty line level is Rs 538.6. In a similar manner as above, Number of urban male =(42+42+92+111)/1000*164 = 47 million Number of urban female =(46+49+98+117)/1000*148 = 45.88 million Hence, Calculated absolute number of poor Indians in 2004-05 = 298.8 million This figure of 298.8 million closely matches with that of 302 million, calculated form poverty specific NSS surveys. Similar analysis was done for different years and across different parameters. Hence although this exercise wouldnt yield any new results , we learnt how to use NSS data tables or other standard tables to draw important inferences. HUC 722 Project Report Page 19

6. Salient Features of the Employment Scenario

in India during the recent years
In rural India, the proportion of all male workers engaged in the agricultural activities declined to 67 per cent in 2004-05, in comparision with 1999-2000. For all female workers, the decline was less - 83 per cent in 2004-05. In urban India, the trade, hotel and restaurant' sector engaged about 28 per cent of the male workers while manufacturing and other services sectors accounted for nearly 24 and 21 per cent, respectively, of the usually employed males. On the other hand, for urban females, services sector accounted for the highest proportion of the total usually employed, followed by manufacturing and agriculture. The proportion of urban females employed in manufacturing sector increased from 24 per cent in 1999-2000 to 28 percent in 2004-05. The trade, hotel and restaurant sector revealed a fall in its share by about 5 percentage points between 1999-2000 and 200405. During this period, no such distinct changes are observed in the case of urban males. Most of us are aware of the percentage of people in the self-employed category, both in rural and urban areas, during 2004-05, it is also seen that proportion of regular employees was relatively lower among females as compared to males in both rural and urban India. On the other hand, proportion of casual labour was higher among female workers than that among male workers in the urban areas. The proportion of casual labour was about 33 per cent among male as well as female workers in the rural areas. In 2009-2012, about 54 per cent of the rural males and 56 per cent of rural females were self-employed. In the urban areas, corresponding proportions were 41 per cent for both males and females. In the urban areas, about 42 per cent of males and 39 per cent of females were regular salaried/wage employees. In rural India, the proportion of male workers engaged in the agricultural activities declined to 63 per cent in 2009-10 whereas for the female workers, the decline was to 79 per cent during the same period. In urban India, the trade, hotel and restaurant' sector engaged about 27 per cent of the male workers while each of manufacturing and other services sector accounted for nearly 22 per cent of them. On the other hand, among the urban females, other services sector accounted for the highest proportion, followed by manufacturing. The proportion of urban females employed in other services sector increased from 36 per cent in 2004-05 to 39 percent in 2009-10 and the agriculture sector revealed a fall in its share by about 4 percentage points HUC 722 Project Report during this period. Page 20

For rural females, the proportion of self-employed had shown a gradual fall, for a long period, till 1999-2000, when it showed a rise over 1999 2000 during 2004-05 and then showed a fall of 8 percentage points during 2004-05 and 2009-10. Interestingly, compared to the self-employed, there has been a corresponding rise and fall in the proportion of casual labour over this period. During this period, though the proportion of regular employed among urban males had fallen, wheraes among urban females, there had been an increase. In 2009-10, another significant thing that played an important role in providing employment to the rural masses was the implementation of Mahatma Gandhi National Rural Employment Gurrantee Scheme, which looked forward to ensure 100 days of employment to every job card holder. About 35 per cent of the rural households had MGNREG job cards. During this period, about 24 per cent of the rural households got work in MGNREG works and 19 per cent of the rural households sought but did not get MGNREG works.

6.1 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. While the percentage of the workforce employed in agriculture is declining, total employment in HUC 722 Project Report this sector continues to rise, though at significantly slower rates than in the past. A reduction Page 21

in the proportion of the population employed in the primary sector is a natural and inevitable trend. However, this does not mean that the potential for employment in this sector is being fully exploited. In the short term, strategic initiatives to modernize and diversify Indian agriculture can generate employment opportunities for very large numbers of people, thereby providing time for the more gradual expansion of employment potentials in other sectors.

An opposite trend is seen in the services, wher 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. The increase in GDP share has been faster than of employment, while industry has retained its position in respect of relative productivity. 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. 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 self-employed, regular wage and salaried workers and casual wage earners. It has been generally expected that with shift of workers from agriculture to nonagricultural 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. The share of self employed has decreased, whereas that of regular wage salaried workers has, however, stagnated, while that of casual workers has increased.

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6. 2 Casualization
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 analysed. The shift is seen from self-employed to casual workers category and most of it has taken place in rural areas, from agriculture to nonagricultural 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 full-time or supplementary employment adding to the incomes of the rural households. On the other hand, regular jobs have hardly increased in he 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 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, casualization of the nature observed does not necessarily imply a deterioration in the quality of employment. A small part of the real casualisation that has taken place due to displacement of regular workers from large enterprise in the urban areas, no doubt, indicates such a deterioration. HUC 722 Project Report Page 23

Slow growth of employment in the organised sector has been a major factor in the stagnancy in the proportion of regular wage and salary earners. This sector consisting of public services and enterprises and large private firms, is the one that offers regular jobs. Employment growth in this sector has been just about 0.5 per cent during 1994-2000. In the post 2000 period, organised sector employment has, in fact, shown an absolute decline. Of around 21 million new employment opportunities generated, only about 4 per cent has been in the organised sector and the rest 96 per cent in the unorganised sector (Planning Commission, 2002). As a result, the share of the unorganised sector in total employment has increased from around 92 per cent to 93 per cent. The high and increasing preponderance of the unorganised sector has been a matter of anxiety from the viewpoint of quality of employment as workers in this sector suffer from poor conditions of work, low earnings and lack of employment and social security.

6.3 Participation of Females in the Labour Force

The number of females in the workforce population is very low, as compared to other developing nations. The females have not been able to assert themselves in the working sector because of many biases that are held against them. The mentality that given a work, a male would do it in a better way as compared to a female, which is quite prevalent in India, is absurd. Due to this, there are also anomalies in the wage rates given to woman. There have been cases where woman have been paid less than half the amount paid to their male counterparts for the same job. This has been a major source of discouragement for the females and acts as a detour for them. The decline in female participation across all age groups indicates that there must be some other factor inhibiting women from participating in the labour market. The decline in the participation of women, irrespective of age, might be because of a decline in overall employment opportunities. In 2004-05, there had been an increase in female participation, compared to earlier rounds of the NSSO survey. But subsequently, with a fall in employment opportunities overall, these women could not find employment and withdrew from the labour market. In this regard, social orthodoxy may have played a role in pushing out women rather than men from the labour force. Additionally, with the financial crisis of 2008, exports from India suffered adversely. Women have been working in the export industries in large numbers. With the export industry hit hard due to the recession, these women lost their jobs and perhaps could not be re-absorbed in the labour market. In other words, the withdrawal of such a large number of women from the labour force was also a result of falling employment opportunities. (Subhanil Chowdhury, Economic and Political Weekly) HUC 722 Project Report Page 24

6.4 Education and Employment

A major reason for the dismal workforce structure of India is the lack of educated labor. A very high proportion of Indias population and workforce (aged 15 years and above) even in 2004-05 were illiterates or persons educated up to the primary and middle school levels. In 2004-05, 66 per cent of Indias rural female workers were illiterates. Educational achievements have been the highest among urban males. However, urban male workers who completed at least a secondary level school education accounted for only 45 per cent of the total in 2004-05. In India, in general, workforce participation rates among the educated population in the country is very low. This is another cause of concern. The lack of employment opportunities corresponding to ones educational achievements is very difficult to avail of in India.As a result, unemployment rates are relatively high among educated sections of the population, and this is particularly so in the case of females. In 2004-05, the proportion of the unemployed in the labour force was only 1.1 per cent among rural females with primary school education, but was 28 per cent in the case of rural females with graduate level education. During the 1990s, a great proportion of less-educated persons joined Indias workforce. In fact, during the 1990s, there was a distinct fall in the workforce participation rate (WPR) among many sections of the educated population, including urban females with secondary school level education and urban females with (under)graduate level education. The WPR fell among urban males too who completed graduate level education (though for rural males with graduate degrees, the WPR increased). During this time, many urban males with middle school level education, rural males with middle school level education, and urban females with primary school or middle school level education joined the work force too.

6.5 Quality of Employment

There has also been a general decline in the quality of employment available in the Indian Labor market. Any educated worker would think twice before joining a establishment which provides neither employment and social security benefits. The gradual decline of the public sector has possibly contributed to the fall in the overall quality of employment in India, as there is no regulatory authority over the informal sector. Because of conditions like this and those mentioned above, a substantially large proportion of women in India, who are not in the labour orce, report their activity status as attending to domestic duties. A significant proportion of regular wage/salaried employees and casual labourers in the country are HUC 722 Project Report Page 25

engaged in informal employment. The situation of casual labour was much worse as compared to regular wage/salaried employees with respect to all the indicators.

6.6 Economic Inequality

The number of people in higher monthly expenditure category is quite low in 1999-00 and 2004-05 (of the range 35-50 per 1000) as compared to mid-income categories which shows that India mostly consisted of the poor masses. This number steadily rises and achieves respectable proportions in 2009-2010 (almost as populated as the other decile classes). The rise in this category is uniform irrespective of the gender-bias or the urban-rural inequality. This equals to saying that the relative number of rich people has increased. This has been made possible because of the economic growth throughout India. People have started investing their money smartly against the traditional Indian mentality of saving rather than risking the money. The concepts of investment and hedging have become part and parcel of life of Indian people. People no longer wish to work in public sector only. Instead they have embraced the highly rewarding albeit risky private sector .Also lots of new lucrative jobs have been generated due to globalization.

7. Future Prospects
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 slowdown 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, however, shows that but for the almost negligible growth in agriculture, employment growth in nonagricultural sector has not really been jobless. Yet, employment has 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. 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 HUC 722 Project Report is expected to grow at that, if not a higher, rate in coming years. Another factor which would Page 26

play a crucial role is education and vocational training. The speed of a nation's development is directly related to the quantity and quality of vocational skills possessed by its workforce. The wider the range and higher the quality of vocational skills, the faster the growth and more prosperous the society. In the coming decade, an additional eight million young people will enter India's labour force every year in search of employment. Currently only 5% of the country's labour force in the 20-24 age category have formal vocational training, compared with 28% in Mexico, 60 to 80% in most industrialized nations, and as much as 96% in Korea. The availability of employable skills is one of the major determinants of how readily new job seekers find employment. The very low level of employable skills makes the search for work much more difficult. It reduces the market value of the job seeker and adds to the costs of employers that must train new recruits from scratch.

8. Conclusion
The recent experience, however, suggests that most of the new employment opportunities are likely to be generated in the unorganised sector and will be characterised by poor conditions of work, and lack of employment and social security. Even within the organised 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 unorganised 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 marketdriven high growth even if accompanied by an expansion in employment opportunities may not by itself be adequate to address the issue of social protection. Since the project was about familiarizing ourselves with art of deducing meaningful relations from the available data, we have tried to paint the picture of changes in employment status HUC 722 Project Report Page 27

in India since 1999-00 by focussing on different employment sectors and gender aspects of the workers in mind. NSS five yearly survey not only provided a great deal of information about the topic at hand but also yielded other important conclusions like current state of working poor in India.

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9.References
1. Employment and Unemployment Situation in India 1999-2000 , Report No. 458(55/10/2), (July 1999 June 2000) 2. Employment and Unemployment Situation in India 2004-05, Report No. 515(61/10/1), (July 2004 June 2005) 3. Employment and Unemployment Situation in India 2009-10, NSS Report No. 537(66/10/1), (July 2009 June 2010). 4. FCND DISCUSSION PAPER NO. 50,COMPUTATIONAL TOOLS FOR POVERTY,MEASUREMENT AND ANALYSIS, Gaurav Datt. 5. 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. 6. EMPLOYMENT AND POVERTY IN INDIA: 2000-2005, K. Sundaram Working Paper No. 155. 7. Goldar, B.N. (2003): Trade Liberalisation and Manufacturing Employment: The Case of India, Employment Paper 2002/3,4, Geneva, International Labour Office.

8. TRENDS IN LABOUR SUPPLY AND DEMAND IN INDIA -Jayan Jose Thomas 9. Chandrasekhar, C P and J Ghosh : Latest Employment Trends from the NSSO, Business Line. 10. Employment in India: What Doesthe Latest Data Show? Subhanil Chowdhury 11. 2009-10 Population based on population estimate as on 1 January 2010 as given in Appendix C of NSS Report2009-10

12 July.

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