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Rural India high on non-farming jobs

Employment in sectors other than crop production and plantation grew faster in rural areas in comparison with urban areas between 1998 and 2005. Chetan Chauhan reports.
Hindustan Times | By Chetan Chauhan, New Delhi
UPDATED ON MAY 30, 2008 12:09 AM IST

Employment in sectors other than crop production and plantation grew faster in rural areas in comparison with urban areas between 1998 and 2005. Millions of Indians shifted to jobs in the retail trade, manufacturing and allied agricultural activities such as livestock farming and fishing, according to the Fifth Economic Census-2005 released by the government on Thursday.

It is, however, not clear if this shift was triggered by distress in the agricultural sector or indicates enhanced entrepreneurship among the country’s rural folk. “It may be because people got pushed out of agriculture or were pulled into business because of higher economic returns,” Pranab Sen, Secretary in the Ministry of Statistics and Programme Implementation, said after releasing the data.

Sen said the data clearly shows higher economic activity in rural areas compared to urban India. In 2005, 100 million people were in areas establishments as owners or employees. And more than half of them were in rural areas.

Many critics of the BJP attribute the NDA’s defeat in the 2004 Lok Sabha election to “jobless growth”. SK Nath, Director-General, Central Statistical Organisation (CSO), who coordinated the census, said new data proves “there was nothing like jobless growth. During the period surveyed, growth in a number of enterprises matched the rise in employment, showing that economic growth has benefited rural India.” But the census did not survey wages, Sen said. An economist with the Planning Commission said the census does not answer the big question - whether per capita earnings in rural India have increased. “I believe it has not. Some of these self-owned enterprises may be because of agricultural distress,” he said.

According the survey of 211 million households and 42 million establishments, the employment growth rate in rural areas went up by 1.60 per cent during 1998-2005 from 1990-1998 rates. In urban areas, the rate rose by just 0.36 per cent in the same period.

Employment growth rate in rural areas during the current survey period was 3.88 per cent while it was 2.22 during the previous eight-year period. But in urban areas, where economic activity is believed to be higher, the annual employment rate recorded for 1998-2005 was 1.70 per cent compared to 1.34 per cent in the previous period. The survey does not account for employment in the government though.

The higher employment rate in rural areas was primarily because villagers ventured into self-owned retail and manufacturing businesses — the two sectors with the maximum growth between 1998-2005. Growth of self-owned establishments run by family members doubled in rural areas during the census period as compared to 1990-98, when it was 2.25 per cent. Similarly, establishments with up to six workers witnessed a three-fold jump in rural areas.

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