Chapter 6: Employment Growth, Informalisation and Other Issues

From the above data, it can be concluded that 30 years back, the Indian economy was in a state of acute unemployment and poverty. There was disguised unemployment in agriculture and a low level of female participation in the workforce.

Therefore it can be seen that workers in urban areas were around 9.61 crores, and the total workforce of India was approximately 39.7 crores.

Salaried employees are those who are on the permanent payroll of an employer. This is true for skilled workers. The concentration of salaried workers is more in urban areas as the jobs in urban areas require workers with special skills. Such centres exist in urban areas where people can get trained and enhance those skills in order to earn a regular salary. Training requires education that cannot be obtained in rural areas. Companies and industries also look for properly skilled workers available in the city. Therefore there is more concentration of salaried employees in urban areas than in rural areas.

Women are involved in economic activities that are not stable and hence, do not have steady incomes. A steady income and permanent contract can be obtained from a salaried occupation. As female education is not given priority, they lack the professional skills that are necessary for steady employment. Women are more vulnerable when compared to men and possess low bargaining power. Females are paid less than males. Therefore it is common for women to be in self-employment.

There are three sectors in an economy: Primary, Secondary and Tertiary. It makes up the structure of occupation in an economy. The primary sector consists of agriculture, forestry, mining, and fishing. Secondary sectors consist of construction and manufacturing industries. The tertiary sector includes industries like trade, communication and transport. The primary source of employment is agriculture and related activities, as mentioned in the primary sector. The primary sector consists of about 57 per cent of the total workforce. The secondary and tertiary sectors consist of 18 and 25 per cent of the workforce. The tertiary sector is emerging as a potential source of employment and is also contributing to GDP. It is seen that the rural population is mostly involved in the primary sector while the urban population is involved in the secondary and tertiary sectors.

There have been changes in the way the workforce is distributed as compared to 1970 and can be shown as follows:

1. The workforce engaged in the primary sector was around 74 per cent during the year 1970 while it has come down to 50%. The service sector, along with the Secondary sector, has shown great improvement.

2. More preference is to have regular employment with a salary. But self-employment is where most people are employed.

Employment generated in India during the last 50 years is not commensurate with the GDP growth, and that’s why it is referred to as jobless growth. This situation arises when GDP is growing in an economy, but there is no expansion of employment opportunities relative to that. In other words, the economy is producing more goods and services without generating the required level of employment. This phase started with the initialisation of economic reforms in 1991, and since then, the economy has been failing to maintain a balance between GDP and employment growth rate.

It is necessary to generate employment in the formal sector for these reasons:

1. Formal sectors provide benefits such as a pension, gratuity, and provident fund, which is not there in the informal sector.

2. There is the assurance of regular income in the formal sector

3. More income is there for those working in the formal sector

4. Poverty and income inequality will be reduced if more employment is generated in the formal sector

Victor is not an unemployed worker. Instead, he is working only two hours a day which is not sufficient for him to be considered a full-time worker. As per statistics by National Sample Survey, anyone who works below 28 hours a week is said to be underemployed. The work that Victor does can include delivering newspapers, working in a restaurant, courier delivery boy and teller in a bank.

The following suggestions will help in generating employment:

1. Increase in production from the agriculture and industrial sectors can help in increasing employment. Small-scale industries should be encouraged in order to generate more employment.

2. Higher production results in demand for more workers. Rural workers should be made aware of the new technologies and how they will help them in getting employed.

3. Rise in population leads to a lack of jobs and unemployment. The population should be controlled by adopting proper safety measures (birth control)

4. The rural areas should be allowed to level up using suggestions and moving away from an agrarian-based economy.

5. Finance should be readily provided with facilities of credit so that it will help the farmers.

6. Schools should be set up to educate the village children and also to give technical knowledge for workers.