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Employing numbers

As the Indian economy has entered a much faster growth trajectory since then, it is most likely that this pace of job creation has picked up further.

india Updated: Jun 02, 2008 21:07 IST

The Fifth Economic Census-2005 ought to dispel some of the gloomy tidings that India’s rapid economic growth has had no impact on employment creation. Employment grew at the rate of 2.78 per cent per annum during 1998-2005 compared to 1.75 per cent during 1990-98. As the Indian economy has entered a much faster growth trajectory since then, it is most likely that this pace of job creation has picked up further. The good news is that the growth in jobs has been much more robust in rural than urban India. In the countryside, more employment is being created in sectors other than crop production like livestock, fisheries, retail trade and manufacturing. The livestock sector has grown much more rapidly than crop production. An interesting fact is that milk with a production level of 100 million tonnes plus is India’s largest crop — much higher than rice (around 95.7 million tonnes) and wheat (76.8 million tonnes).

What is not clear, however, is whether this shift within the countryside is due to agrarian distress or the unleashing of entrepreneurial energies among the rural folk. An important aspect of the problem pertains to an ongoing transition in what the British historian Eric Hobsbawm termed as the “solid peasant block of India”. The historic shift from the countryside to towns has begun to accelerate although a majority still lives off the land. The share of agriculture in total employment thus has come down from 58.5 per cent in 2000 to 54.2 per cent in 2005. The latest Economic Census clearly indicates a diversification away agriculture as villagers ventured largely into self-owned businesses in allied agricultural activities, retail trade and manufacturing.

Unfortunately, there is no information whether their earnings and incomes have increased in step with higher rural employment. The bad news is also that this pace of job creation hasn’t made any dent whatsoever on the rising incidence of joblessness in India. The fact is that additions to the labour force — that includes not only those who work but also those who seek it — exceed employment growth. Not surprisingly, unemployment on a daily status basis has been rising from 2000 to 2005 — definitely, a problem that requires to be tackled through sustained growth.