Chapter: Employment: Growth, Informalisation, and Other Issues:
Introduction
People work in various fields—on farms, in factories, banks, shops, or even from home. Work-from-home jobs, like IT programming, have become more common, especially during the COVID-19 pandemic.
Work is important not just for earning money but also for gaining self-worth and contributing to society’s development.
Mahatma Gandhi stressed education through hands-on work like crafts to understand the value of labor.
Workers and Employment
What is Employment?: A worker is someone engaged in economic activities, whether they are paid or self-employed. Even temporary absences due to illness or festivals don't change their status as workers.
In 2017-18, India had a workforce of about 471 million, with a large majority from rural areas.
Women’s participation in the workforce is lower than men, particularly in urban areas.
Participation of People in Employment
The worker-population ratio is used to measure the percentage of people engaged in economic activities. In India, the ratio was about 34.7% in 2017-18.
Rural areas have a slightly higher worker-population ratio than urban areas. This is due to fewer opportunities for education and non-farming jobs in rural areas.
Self-Employed and Hired Workers
Workers can be classified into three groups:
Self-employed: People running their own businesses, such as small shop owners. They make up 52% of the workforce.
Casual Wage Workers: People hired temporarily, often in farming or construction, making up 25% of the workforce.
Regular Salaried Employees: Workers hired on a permanent basis, accounting for 23% of the workforce.
Employment in Firms, Factories, and Offices
Economic development shifts workers from agriculture to industries and services. The primary sector (agriculture) employed the majority in rural areas, while the service sector dominated urban employment.
By 2017-18, about 60% of rural workers were still employed in agriculture, while 60% of urban workers were engaged in services.
Growth and Changing Structure of Employment
India's GDP grew at a faster rate than employment between 1950-2010, creating a phenomenon known as jobless growth—economic growth without corresponding increases in job opportunities.
A gradual shift in employment from agriculture to the secondary (manufacturing) and service sectors has been observed. However, a significant portion of workers still rely on farming.
Informalisation of the Indian Workforce
The informal sector (unorganized jobs) dominates the Indian workforce, employing 94% of workers as of 2011-12. This includes farmers, small-scale entrepreneurs, and casual laborers.
Informal sector workers often lack job security, social benefits (like pensions or maternity leave), and have lower wages compared to those in the formal sector.
Formal sector workers, including public and private companies with 10 or more employees, account for just 6% of the workforce.
Unemployment
Open unemployment occurs when individuals actively seek work but can't find it.
Disguised unemployment is common in rural areas, where more people work on farms than needed, reducing productivity.
Seasonal unemployment affects rural workers during off-farming seasons, forcing them to seek temporary work in cities.
Government and Employment Generation
The government has taken steps to generate jobs through initiatives like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which guarantees 100 days of wage employment for rural households.
Employment generation programs target infrastructure development, healthcare, education, and rural asset creation.
Conclusion
Employment patterns are shifting towards the service sector, with informal jobs becoming more common. Although the economy is growing, there is a need for formal job opportunities with social security benefits.
Government efforts continue to focus on employment generation, especially in rural areas, to bridge the gap between economic growth and job creation.
Recap
A significant part of the Indian population is engaged in economic activities, contributing to national income.
Self-employed individuals dominate the workforce, while the agricultural sector employs most rural workers.
India faces the challenge of jobless growth, where GDP growth outpaces employment generation.
The informal sector employs most of India's workforce, and unemployment issues like disguised and seasonal unemployment persist.
