COMMENTARY
Employment in India: What
Does the Latest Data Show?
Subhanil Chowdhury
The 66th round National Sample
Survey Organisation data
(2009-10) on the employment
situation paints a grim picture of
a limited creation of jobs between
2004-05 and 2009-10, widespread
withdrawal from the labour force
(especially by women) and slow
growth of employment in the
non-agricultural sector. The shift
to education among the youth is a
positive development but does not
by itself explain the decline of the
labour force participation rate.
T
he most comprehensive data on
employment in India is collected
by the National Sample Survey
Organisation (NSSO) through its quinquennial surveys, the latest being the 66th
round survey conducted in 2009-10. The
NSSO has recently released the preliminary data of the large sample round of
2009-10. This latest data reflects a disquieting situation vis-à-vis the employment
problem in India.
The first problem area as revealed in
the NSS data is that there has been hardly
any change in the size of the workforce in
the country. In other words, there has not
been any significant increase in employment opportunities.
From Figure 1, it is seen that there has
been a decline in employment in the rural
areas, led by a sharp fall in the employment of rural females. There has been a
marginal increase in urban employment
mainly due to an increase in male employment, while female employment has
come down. In total, there has been an
increase in employment of less than a
­million people in the country bet­ween
2004-05 and 2009-10, a period in which
the Indian economy was growing rapidly.
That this decline in rural employment took
place in spite of the implementation of the
­National Rural Employment Guarantee
Act (NREGA) indicates that there has been
a steep fall in rural work.
This almost jobless growth of the Indian
economy is accompanied by a significant
decline in the labour force participation
rate (LFPR), particularly for women. This
is shown in Figure 2 (p 24).
From Figure 2, it is seen that the LFPR
for rural males increased marginally in
2009-10, compared to 2004-05, while for
urban males it actually declined. The most
interesting observation, however, is that
there has been a drastic decline in LFPR
for women workers both in the urban and
rural areas. In fact, the LFPR is the lowest
for women since 1993-94 both in the rural
and urban areas. The reasons for such a
huge decline in LFPR for women need to be
explored. There are two possible explanations that can be given at the outset. Women
have simply withdrawn from the labour
market in India due to social conservatism. This does not seem to be a plausible
explanation because the LFPR in 2009-10
is the lowest since 1993-94 (Figure 2). If,
indeed, social conservatism is responsible
then there must be some explanation for
such a change in the impact of social
factors during this period, given that the
LFPR for women in both urban and rural
areas was the highest (after 1993-94) in
2004-05. It is not plausible that the conservatism has increased dramatically in
the course of only five years.
It is also argued that more women are
pursuing higher education resulting in a
decline in women LFPR. It is, indeed, the
case that more persons belonging to the
age groups of 15-19 and 20-24 have reported
attending educational institutions as their
Figure 1: Number of Persons in Workforce (million)
500
400
2004-05
300
2009-10
200
100
Subhanil Chowdhury ([email protected])
is with the Institute of Development Studies,
Kolkata.
0
Male
Rural
Female
Total
Male
Urban
Female
Total
Total
2004-05 218.9
2009-10 231.9
124
104.5
342.9
336.4
90.4
99.8
24.6
22.8
115
122
457.9
458.4
The workforce is given according to usual status.
Source: Table S1.1 in Key Indicators of Employment and Unemployment in India, 2009-10, NSSO Publication.
Economic & Political Weekly EPW august 6, 2011 vol xlvi no 32
23
COMMENTARY
Figure 2: Labour Force Participation Rate in India (in %)
60
2009-10
50
2004-05
1993-94
40
1999-2000
30
20
10
0
Rural Male
Rural Female
Urban Male
Urban Female
The LFPR pertains to usual status.
Source: NSSO Report No 515 on Employment and Unemployment Situation in India, 2004-05 and Key Indicators of Employment
and Unemployment in India, 2009-10.
usual activity in 2009-10, compared to
2004-05 (Table 1).
Table 1: Percentage of Persons Reporting Attending
Educational Institutions as Their Usual Status, in the
Age Groups 15-19 and 20-24 Years
Rural Urban
Male
Female
Male
1999-2000
41.3
15-19 25.8 58.5
Female
2004-05
43.6
31.5
58.7
56.7
2009-10
57.3
47.1
70.1
68.2
51.7
1999-2000
8.6
20-24 2.9 21.8
2004-05
9.1
3.9
21.5
14.9
2009-10
16.6
7.5
29.7
23.4
15.8
Source: “Key Indicators of Employment and Unemployment
in India, 2009-10” and NSS Report on Employment and
Unemployment, various issues.
Taking cognisance of an increase in the
proportion of people attending educational institutes, an EPW editorial (9 July
2011) argued:
Why did male employment increase more
slowly in the recent period? This is almost
entirely because more young men are now
continuing with their education rather than
looking for jobs….a significant part of the decline in female employment in 2009-10 can
also be attributed to this trend.
This argument is, however, problematic.
Even if we accept that the decrease in the
LFPR is the result of a higher proportion of
people (particularly women) attending
educational institutions, this cannot explain
why the overall employment situation in the
country did not improve. If more people
are moving out from the labour force, in
the 15-24 age group, then, given a particular
rate of employment creation in the country,
people from other age-groups should fill
the posts. To argue that employment
declined because of a decline in supply of
labour, since more people attended education in the age group 15-24 years, is to
argue that there is full employment in
24
the economy or a situation of l­abour
shortage. Clearly, this is not the case in
India. The only explanation then for an
almost stagnant employment situation is
simply that not enough jobs are b­eing created in the economy, even with an 8%
plus growth rate.
Additionally, it is also doubtful as to
whether an increase in women attending
educational institutes can be put forward
as an explanation for a fall in the female
LFPR. This is because unlike for men, it is
seen that the LFPR for women has decreased for all ages above the age of 15. In
the case of men, there has been a decline
in the LFPR mainly for the age groups 15-19
and 20-24 because of an emphasis on education. For the other age groups, LFPR has
remained more or less constant, with marginal changes. Thus a decline in the LFPR
for urban males can be explained mainly
by an increase in the proportion of men in
the 15-19 and 20-24 age groups undergoing
education. This cannot be said for women,
where the LFPR for every age group has
­declined. This is shown in Table 2.
The decline in female LFPR across all
age groups indicates that there must be
some other factor inhibiting women from
participating in the labour market. The
decline in the LFPR for women, irrespective of age, might be because of a decline
in overall employment opportunities. In
2004-05, there had been an increase in
f­emale LFPR, 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.
Nonetheless, the increase in the proportion of young men and women undergoing education is a welcome development. However, the point of worry is
that when these youth offer themselves
in the job market, open unemployment
in the country might increase, if the
employment-generating potential of the
economy remains low.
The fall in the LFPR and a resultant
dec­line in the size of the labour force, on
the other hand, resulted in a fall in the
un­employment rate. This is shown in
­Figure 3 (p 25).
It is seen that the unemployment rate
decreased for all workers in 2009-10
compared to 2004-05, although the
Table 2: Age-Specific Labour Force Participation Rate
Rural Male
2004-05
Rural Female Urban Male
Urban Female
Rural Male
2009-10
Rural Female Urban Male
Urban Female
15-19
52.9
33.1
38.1
14.4
39.0
19.5
26.3
8.5
20-24
89.1
43.5
76.9
25.0
81.3
31.4
68.2
19.7
25-29
98.2
53.0
95.7
26.1
97.5
40.4
94.7
22.2
30-34
98.8
59.3
98.7
30.8
99.0
43.4
98.5
23.9
35-39
99.1
64.2
98.4
34.0
99.2
49.7
99.1
27.8
40-44
98.5
62.7
98.3
31.7
99.4
49.8
98.7
25.6
45-49
98.2
61.6
97.6
26.9
98.4
49.2
97.9
23.1
50-54
96.3
56.2
93.9
25.9
96.7
48.5
94.8
22.8
55-59
93.1
50.9
83.2
21.8
93.4
41.1
85.5
19.1
60 above
64.5
25.4
36.6
10.0
64.7
22.6
34.2
7.0
15-24
68.9
38.2
57.0
19.7
56.7
25.4
46.3
14.2
15 and above
85.9
49.4
79.2
24.4
82.5
37.8
76.2
19.4
Source: Same as Figure 2.
august 6, 2011 vol xlvi no 32 EPW Economic & Political Weekly
COMMENTARY
Figure 3: Unemployment Rate (CDS) for All Workers (in %)
12
1999-2000
10
8
2004-05
1993-94
2009-10
6
4
2
0
Rural Male
CDS refers to Current Daily Status.
Source: Same as Figure 2.
Rural Female
­ ecline in unemployment in rural a­reas
d
has been marginal and less than that of
­urban areas. This decrease in unemployment, however, is not because of an
­increase in ­employment, rather it is a result of a decrease in the number of people,
particularly women, offering themselves
for work.
The other important issue with regard
to employment is the type of employment
that is being generated. In 2004-05 what
was important was that self-employment
grew significantly with a fall in casual
employment and a marginal rise in
Table 3: Percentage Distribution of Employment
(Self-employed/Regular Employed/Casual Labour)
by Sex and Sector in India
Employment Status and Year
Rural
Male Female
Urban
Male Female
Self-employed 1972-73
65.9 64.5
39.2
48.4
1977-78
62.8 62.1
40.4
49.5
1983
60.5 61.9
40.9
45.8
1987-88
58.6 60.8
41.7
47.1
1993-94
57.9 58.5
41.7
45.4
1999-2000
55.0 57.3
41.5
45.3
2004-05
58.1 63.7
44.8
47.7
2009-10
53.5 55.7
41.1
Urban Female
r­ egular-salaried employment. In 2009-10,
the trend was different. The proportion of
self-employment has decreased, and it is
the lowest proportion for all workers since
1993-94. The decline of self-employment
is the highest for female workers. Casual
workers have increased significantly in the
rural areas compared to 2004-05, perhaps
because of the impact of the NREGA. For
regular-salaried workers, there has been a
marginal increase (Table 3).
The situation with regard to the real
wage of the workers has improved in
2009-10 compared to 2004-05. Table 4
shows that there has been an improvement in the wages for all cate­gories of
workers. If indeed there has been an increase in the real wage in the economy,
which has been driven by market forces,
then the labour force must have shifted
Table 4: Average Daily Real Wage Rate for Workers
in 2004-05 Prices (Rs)
Male
Rural Female
Urban
Male
Female
Regular salaried 2004-05
144.93
41.1
2009-10
165.13 103.31 259.77 212.68 (2.79) (4.16) (5.56) (7.77)
Casual workers
2004-05
55.03
34.94
2009-10
67.29
(4.46)
45.69 90.86 52.85 (6.15) (4.2) (4.09)
Regular employees 1972-73
12.1
4.1
50.7
27.9
1977-78
10.6
2.8
46.4
24.9
1983
10.3
2.8
43.7
25.8
1987-88
10.0
3.7
43.7
27.5
1993-94
8.3
2.8
42.1
28.6
1999-2000
8.8
3.1
41.7
33.3
2004-05
9.0
3.7
40.6
35.6
2009-10
8.5
4.4
41.9
39.3
Casual labour 1972-73
22.0 31.4
10.1
23.7
1977-78
26.6 35.1
13.2
25.6
1983
29.2 35.3
15.4
28.4
1987-88
31.4 35.5
14.6
25.4
1993-94
33.8 38.7
16.2
26.2
1999-2000
36.2 39.6
16.8
21.4
2004-05
32.9 32.6
14.6
16.7
2009-10
38 39.9
17
19.6
Source: Same as Figure 2 and NSS Employment and
Unemployment Surveys, various issues.
Urban Male
85.53 203.28 153.19
75.1 43.88
Figures in brackets denote average growth rate of real wages
per year. The wages for urban workers have been deflated by
consumer price index (industrial workers) (CPI(IW)) and that
of rural workers by consumer price index (agricultural labour)
(CPI(AL)). This wage refers to the wage for casual workers
engaged in work other than public work.
Source: Same as Figure 2.
from the low-productive to high-productive
sectors. In other words, there must have
been a transfer of the labour force from
the traditional primary (agriculture and
allied) sector to the modern industrial or
manufacturing sector, as envisaged by the
famous Lewis model.
From Table 5, it is seen that there has
been a decline in the proportion of people
Economic & Political Weekly EPW august 6, 2011 vol xlvi no 32
employed in agriculture and allied sectors
both in the rural and urban areas. Even
then, more than 67% of the people in r­ural
areas and 7.5% people in urban areas are
dependent on agriculture, while the share
of this sector in GDP has come down to
14%. In other words, agriculture continues to be a sector ridden with surplus
l­abour and low productivity.
More importantly, along with a decline
in the share of employment in agriculture, there has also been a decline in the
share of employment in manufacturing,
both in rural and urban areas. Even in the
Table 5: Share of Employment in Various Industries
in India (in %)
Rural Persons
Urban Persons
2004-05 2009-10 2004-05 2009-10
Agriculture and allied
72.7
67.6
8.8
7.5
Mining
0.5
0.6
0.8
0.6
Manufacturing
8.1
7.2
24.6
23
Electricity, gas and water supply
0.2
0.2
0.7
0.6
Construction
4.9
9.4
8 10.2
Trade, hotel and restaurant
6.1
6.4
24.6 24.3
Transport, storage and communication
2.5
2.9
8.6
8.7
Finance, real estate, etc
0.5
0.6
5.3
6.7
Public administration, other services
4.5
4.8
18.7 18.5
Source: Same as Figure 2.
Table 6: Growth Rate of Employment
in the Non-agricultural Sector (%)
Total
Male
1999-2000 to 2004-05
4.65
4.42
Female
5.76
2004-05 to 2009-10
2.53
2.89
0.76
Source: Chandrasekhar and Ghosh (2011).
services sector, there has been a fall or no
change in the proportion of employment
in the trade, hotel and restaurant and
transport and communications sector
with a slight increase in the finance and
real estate sector. The entire decrease in
proportion of employment in the agriculture as well as the manufacturing sector
has been compensated by an increase in
employment in the construction sector,
both in the rural and urban areas. In
fact, the increase of this proportion in the
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25
COMMENTARY
rural areas is almost 100%. This can be
explained in terms of NREGA, which
mainly involves construction work. The
increase in this proportion in the urban
areas can be attributed to the real estate
development that is happening at a rapid
pace in India.
From Table 6 (p 25), it is obvious that
there has been a substantial slowdown in
employment growth in the non-agricultural
sector in 2009-10, compared to 2004-05.
This slowdown in employment growth
has been most severe for female workers.
With such a slowdown in non-agricultural
employment growth there is less possi­
bility of an increase in the real wage of
workers. Even then if real wages have
­increased, the reason for such an increase
Wages and Ethnic Conflicts
in Bengal’s Tea Industry
Sharit Bhowmik
The recent wage agreement for
tea labour in Darjeeling, that
raised the daily wage to Rs 100
has increased ethnic tension
among the workers of Nepali
origin and the adivasis in the
tea districts. This article looks at
the ethnic tensions fostered by
the separate Gorkhaland
agitation among the tea workers
and how it has affected
the wage negotiations.
Sharit Bhowmik ([email protected]) teaches at
the Tata Institute of Social Sciences, Mumbai.
26
T
he unrest in Darjeeling has been in
the news for long. It started in the
mid-1980s with the formation of
the Gorkha National Liberation Front
(GNLF) led by Subhash Ghising, a former
soldier in the Indian army. Initially, the
­issue was of giving Indian citizenship to
people of Nepali origin. Alongside, the
GNLF also demanded statehood for Darjeeling as the area was ethnically and linguistically different from West Bengal. In
­order to have a separate identity for the
people of Nepali origin in Darjeeling he
renamed them Gorkha and the language
was also labelled Gorkha. This was done to
distinguish them from the Nepalis of Nepal.
The GNLF managed to get an autonomous
hill council for Darjeeling Hills comprising three subdivisions in the district (Darjeeling Sadar, Kalimpong and Kurseong).
The union and state governments pumped
a lot of funds into the council. Some construction activities were noticed in the
area. The former summer palace of the
princely family of Burdhaman was turned
into the residence of Ghising. It was redecorated into a grand residence for the ruler
of half a district.
The media has covered most of these
events and these are known to most people
interested in the happenings in this hill
district. What has not been covered in the
news is the reaction of another group
­residing in the neighbourhood. These are
the adivasi tea labour and they, in fact,
number higher than the Gorkha population of the Darjeeling Hills.
is not because of a structural change in
the economy but perhaps due to other as
yet unidentified factors.
References
Chandrasekhar, C P and J Ghosh (2011): “Latest Employment Trends from the NSSO”, Business Line,
12 July.
EPW (2011): “Don’t Shoot the Messenger”, Economic &
Political Weekly, 9 July.
Tea is cultivated in two districts of West
Bengal, namely, Jalpaiguri and Darjeeling.
The two districts produce 20% of ­India’s
tea with Jalpaiguri producing around 15.
The tea growing area of Jalpaiguri is
known as Dooars while Darjee­ling has two
areas known as Darjeeling Hills and Terai
in the plains of the district. Labour in
Dooars and Terai are mainly adivasis while
Darjeeling Hills have Gorkha workers. GNLF
had demanded that besides Darjeeling Hills,
Terai and a part of Dooars (having Gorkha
workers) should be included in the new
state. The adivasis in Dooars and Terai
were opposed to this move as they felt that
they would be dominated by the Gorkhas.
They were not able to articulate their opposition at that time because of a lack of
forum. GNLF, however, gave up this demand after the hill council was conceded.
Rise of GJMM
The Gorkha Janmukti Morcha (GJMM)
sprang up in 2008 and was most likely a result of inter-regional conflict. Bimal Gurung,
its leader, is from Kalimpong which is not a
tea growing area. Ghising and most GNLF
leaders were from the tea growing areas of
Darjeeling and Kurseong. The movement
was primarily directed against Ghising and
articulated the public anger against the
GNLF for failure to improve the lives of the
poor in the hills. Tea garden labour, which
makes up a major section of the population
and had been the backbone of GNLF, got disillusioned on various counts. The tea industry in the hills was in shambles. Though Darjeeling produces high quality tea which
fetches high prices, the wages of the workers
were lower than those of the plains. By
2008, GNLF and its trade union, Himalayan
Plantation Workers’ Union, were disbanded
and ­Ghising had to seek refuge in Jalpaiguri.
GJMM is more aggressive in demanding
a separate state. It has organised a number
august 6, 2011 vol xlvi no 32 EPW Economic & Political Weekly