7

EMPLOYMENT : GROWTH,
INFORMALISATION
AND OTHER ISSUES

After studying this chapter, the learners will

116

understand a few basic concepts relating to employment such as

economic activity, worker, workforce and unemployment

understand the nature of participation of men and women in various

economic activities in various sectors

know the nature and extent of unemployment

assess the initiatives taken by the government in generating employment

opportunities in various sectors and regions.

INDIAN ECONOMIC DEVELOPMENT

What I object to, is the craze for machinery, not machinery as such. The
craze is for what they call labour-saving machinery. Men go on saving labour
till thousands are without work and thrown on the open streets to die of
starvation...
Mahatma Gandhi

7.1 INTRODUCTION
People do a variety of work.
Some work on farms, in
factories, banks, shops and
many other workplaces; yet a
few others work at home. Work
at home includes not only
traditional work like weaving,
lace making or variety of
handicrafts but also modern
jobs like programming work in
the IT industry. Earlier factory
work meant working in
Fig. 7.1 Multinational companies sell footballs
factories located in cities
made in the houses of Jalandhar, Punjab
whereas now technology has
enabled people to produce those
for ourselves; we also have a sense of
factory-based goods at home in
accomplishment when we work to meet
villages.
the requirements of those who are
Why do people work? Work plays
dependent on us. Having recognised
an important role in our lives as
the importance of work, Mahatma
individuals and as members of society.
Gandhi insisted upon education and
People work for earning a living. Some
training through a variety of works
people get, or have, money by inheriting
including craft.
it, not working for it. This does not
Studying about working people
completely satisfy anybody. Being
gives us insights into the quality and
employed in work gives us a sense of
nature of employment in our country
self-worth and enables us to relate
and helps in understanding and
ourselves meaningfully with others.
planning our human resources. It helps
Every working person is actively
us to analyse the contribution made by
contributing to national income and
different industries and sectors towards
hence, the development of the country
national income. It also helps us to
by engaging in various economic
address many social issues such as
activities that is the real meaning of
exploitation of marginalised sections of
earning a living. We do not work only
the society, child labour etc.
EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES

117

7.2 WORKERS

AND

EMPLOYMENT

What is employment? Who is a worker?

When a farmer works on fields, he or
she produces food grains and raw
materials for industries. Cotton
becomes cloth in textile mills and in
powerlooms. Lorries transport goods
from one place to another. We know
that the total money value of all such
goods and services produced in a
country in a year is called its gross
domestic product for that year. When
we also consider what we pay for our
imports and get from our exports we
find that there is a net earning for the
country which may be positive (if we
have exported more in value terms than
imported) or negative (if imports
exceeded exports in value terms) or zero
(if exports and imports were of the same
value). When we add this earning (plus
or minus) from foreign transactions,
what we get is called the countrys gross
national product for that year.
Those activities which contribute to
the gross national product are called
economic activities. All those who are
engaged in economic activities, in
whatever capacity high or low, are
workers. Even if some of them
temporarily abstain from work due to
illness, injury or other physical
disability, bad weather, festivals, social
or religious functions, they are also
workers. Workers also include all those
who help the main workers in these
activities. We generally think of only
those who are paid by an employer for
their work as workers. This is not so.
Those who are self-employed are also
workers.
118

The nature of employment in India

is multifaceted. Some get employment
throughout the year; some others get
employed for only a few months in a
year. Many workers do not get fair
wages for their work. While estimating
the number of workers, all those who
are engaged in economic activities are
included as employed. You might be
interested in knowing the number of
people actively engaged in various
economic activities. During 2011-12,
India had about a 473 million strong
workforce. Since majority of our people
reside in rural areas, the proportion of
workforce residing there is higher. The
Work This Out

In
your
house
or
neighbourhood, you might
come across many women
who, even though they
have technical degrees
and diplomas and also free
time to go to work, do not
go to work. Ask them the
reasons for not going to
work. List all of them and
discuss in the classroom
whether they should go for
work and why, and also
ways by which they could
be sent for work. Some
social scientists argue that
housewives working at
home without getting paid
for that work must also be
regarded as contributing to
the gross national product
and therefore, as engaged
in an economic activity.
Would you agree?
INDIAN ECONOMIC DEVELOPMENT

rural workers constitute about threefourth of this 473 million. Men form the
majority of workforce in India. About
70 per cent of the workers are men and
the rest are women (men and women
include child labourers in respective
sexes). Women workers account for
one-third of the rural workforce
whereas in urban areas, they are just
one-fifth of the workforce. Women
carry out works like cooking, fetching
water and fuelwood and participate in
farm labour. They are not paid wages
in cash or in the form of grains; at
times they are not paid at all. For this
reason, these women are not
categorised as workers. Economists
have argued that these women should
also be called workers.

7.3 P A RTICIPATION
EMPLOYMENT

OF

P EOPLE

IN

Worker-population ratio is an indicator

which is used for analysing the
employment situation in the country.
This ratio is useful in knowing the
proportion of population that is
actively contributing to the production
of goods and services of a country. If
the ratio is higher, it means that the
engagement of people is greater; if the
ratio for a country is medium, or low,
it means that a very high proportion
of its population is not involved
directly in economic activities.
You might have already studied,
in lower classes, the meaning of the
term population. Population is
defined as the total number of people
who reside in a particular locality at
a particular point of time. If you want

to know the worker-population ratio

for India, divide the total number of
workers in India by the population in
India and multiply it by 100, you will
get the worker-population ratio for
India.
If you look at Table 7.1, it shows
the different levels of participation of
people in economic activities. For
every 100 persons, about 39 (by
rounding off 38.6) are workers in
India. In urban areas, the proportion
is about 36 whereas in rural India, the
ratio is about 40. Why is there such a
difference? People in rural areas have
limited resources to earn a higher
income and participate more in the
employment market. Many do not go
to schools, colleges and other training
institutions. Even if some go, they
discontinue in the middle to join the
workforce; whereas, in urban areas, a
considerable section is able to study in
various educational institutions. Urban
people have a variety of employment
opportunities. They look for the
appropriate job to suit their
qualifications and skills. In rural areas,
people cannot stay at home as their
economic condition may not allow them
to do so.
TABLE 7.1
Worker-Population Ratio in India,
2009-2010
Sex

Worker-Population Ratio
Total

Rural

Urban

Men

54.4

54.3

54.6

Women

21.9

24.8

14.7

Total

38.6

39.9

35.5

EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES

119

Work These Out

Any

study of employment
must start with a review
of the worker -population
ratios why?

In

some communities, you

might have noticed that
even if the males do not
earn a high income, they do
not send women to work.
Why?

womens work and, therefore, to the

underestimation of the number of
women workers in the country. Think
of the women actively engaged in many
activities within the house and at family
farms who are not paid for such work.
As they certainly contribute to the
maintenance of the household and
farms, do you think that their number
should be added to the number of
women workers?

7.4 S E L F - E M P L O Y E D
WORKERS

AND

HIRED

Compared to females, more males

are found to be working. The difference
Does the worker-population ratio say
in participation rates is very large in
anything about workers status in
urban areas: for every 100 urban
society or about the working
females, only about 15 are engaged in
conditions? By knowing the status
some economic activities. In rural areas,
with which a worker is placed in an
for every 100 rural women about 25
enterprise, it may be possible to know
participate in the employment market.
one dimension quality of employment
Why are women, in general, and urban
in a country. It also enables us to know
women, in particular, not working? It
the attachment a worker has with his
is common to find
that where men are
able to earn high
incomes, families
discourage female
members
from
taking up jobs.
Going back to
what has already
been
mentioned
above, many activities for the household
engaged in by women
are not recognised as
productive work.
This narrow definition of work leads to
Fig. 7.2 Brick-making: a form of casual work
non-recognition of
120

INDIAN ECONOMIC DEVELOPMENT

Such labourers are

casually engaged in others
Chart 7.1 : Distribution of Employment
farms and, in return, get a
by Gender
remuneration for the work
Male Workers
Female Workers
done. Workers like the civil
engineer working in the
construction company
56%
29%
account for 18 per cent of
51%
31%
Indias workforce. When a
20%
worker is engaged by
13%
someone or an enterprise
and paid his or her wages
on a regular basis, they are
Self-employed
Regular Salaried Employees
known as regular salaried
Casual Wage Labourers
employees.
Look at Chart 7.1:
you will notice that selfor her job and the authority she or he
employment is a major source of
livelihood for both men and women as
has over the enterprise and over other
co-workers.
this category accounts for more than
50 per cent of the workforce in both
Let us take three workers from the
diagrams. Casual wage work is the
construction industry a cement shop
second major source for both men and
owner, a construction worker and a civil
women, a little more so for the latter
engineer of a construction company. Since
the status of each one of them is different
(31 per cent). When it comes to regular
from another, they are
also called differently.
Workers who own and
Chart 7.2 : Distribution of Employment by Region
operate an enterprise to
Urban Workers
Rural Workers
earn their livelihood
15%
are known as self35%
employed. Thus the
43%
cement shop owner is
self-employed. About 52
56%
per cent workforce in
India belongs to this
42%
category. The construction
9%
workers are known as
Self-employed
Regular Salaried Employees
casual wage labourers;
they account for 30 per
Casual Wage Labourers
cent of Indias workforce.
EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES

121

salaried employment, men are found to

be so engaged in greater proportion.
They form 20 per cent whereas women
form only 13 per cent. One of the reasons
could be skill requirement. Since regular
salaried jobs require skills and a higher
level of literacy, women might not have
been engaged to a great extent.
When we compare the distribution
of workforce in rural and urban areas
in Chart 7.2 you will notice that the selfemployed and casual wage labourers
are found more in rural areas than in

urban areas. In the latter, both selfemployment and regular wage salaried
jobs are greater. In the former, since
majority of those depending on farming
own plots of land and cultivate
independently, the share of selfemployed is greater.
The nature of work in urban areas
is different. Obviously everyone cannot
run factories, shops and offices of
various types. Moreover enterprises in
urban areas require workers on a
regular basis.

Work These Out

We

generally think that only those who are doing paid work regularly or
casually such as agricultural labourers, factory workers, those who work
in banks and other offices as assistants and clerks are workers. From the
above discussion, you must have understood that those who are selfemployed such as pavement vegetable vendors, professionals such as
lawyers, doctors and engineers are also workers. Mark (a), (b) and (c) against
self-employed, regular salaried employees and casual wage labourers
respectively:
1. Owner of a saloon
2. Worker in a rice mill who is paid on daily basis but employed regularly
3. Cashier in State Bank of India
4. Typist working in a state government office on a daily wage basis but
paid monthly
5. A handloom weaver
6. Loading worker in wholesale vegetable shop
7. Owner of a cool drinks shop which sells Pepsi, Coca Cola and Mirinda
8. Nurse in a private hospital who gets monthly salary and has been
working regularly for the past 5 years.

Economists

point out that casual wage labourers are the most vulnerable
among the three categories. Could you locate who these workers are and
where they are found and why?

Can we say that the self-employed earn more than the casual wage labourers
or regular salaried employees? Identify a few other indicators of quality of
employment.

122

INDIAN ECONOMIC DEVELOPMENT

7.5 E M P L O Y M E N T I N
FIRMS, FACTORIES
AND OFFICES
In the course of
economic development of
a country, labour flows
from agriculture and
other related activities to
industry and services. In
this process, workers
migrate from rural to
urban areas. Eventually, Fig. 7.3 Garment workers: upcoming factory employment for women
at a much later stage,
the industrial sector begins to lose its
working persons engaged in these
share of total employment as the service
divisions can be clubbed into three
sector enters a period of rapid
major sectors viz., (a) primary sector
expansion. This shift can be understood
which includes (i) , (b) secondary sector
by looking at the distribution of
which includes (ii), (iii), (iv) and (v) and
workers by industry. Generally, we
(c) service sector which includes
divide all economic activities into eight
divisions (vi), (vii) and (viii). Table 7.2
different industrial divisions. They are
shows the distribution of working
(i) Agriculture (ii) Mining and Quarrying
persons in different industries during
(iii) Manufacturing (iv) Electricity, Gas
the year 2011-12.
and Water Supply (v) Construction (vi)
Primary sector is the main source
Trade (vii) Transport and Storage and
of employment for majority of workers
(viii) Services. For simplicity, all the
TABLE 7.2
Distribution of Workforce by Industry, 2011-2012
Industrial Category

Place of Residence
Rural

Sex

Total

Urban

Men

Women

Primary Sector

66.6

9.0

43.6

62.8

48.9

Secondary Sector

16.0

31.0

25.9

20.0

24.3

Tertiary / Service Sector

17.4

60.0

30.5

17.2

26.8

100.0

100.0

100.0

100.0

Total

EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES

100.0

123

Work This Out

All

newspapers have one section meant for job opportunities. Some also
devote an entire supplement in a day or every week like Opportunities in
The Hindu or Ascent in The Times of India. Many companies advertise
vacancies for various positions. Cut those sections. Develop a table which
contains four columns: whether the company is private or public, name of
the post, number of posts, sector primary, secondary or tertiary and
qualification required. Analyse the table in the classroom about jobs
advertised in the newspapers.

in India. Secondary sector provides

employment to only about 24 per cent
of workforce. About 27 per cent of
workers are in the service sector. Table
7.2 also shows that about 67 per cent
of the workforce in rural India depends
on agriculture, forestry and fishing.
About 16 per cent of rural workers are
working in manufacturing industries,
construction and other industrial
activities. Service sector provides
employment to only about 17 per cent
of rural workers. Agriculture is not a
major source of employment in urban
areas where people are mainly engaged
in the service sector. About 60 per cent
of urban workers are in the service
sector. The secondary sector gives
employment to about 30 per cent of
urban workforce.
Though both men and women
workers are concentrated in the
primary sector, women workers
concentration is very high there. About
63 per cent of the female workforce is
employed in the primary sector whereas
less than half of males work in that
sector. Men get opportunities in both
secondary and service sectors.
124

7.6 GROWTH AND CHANGING STRUCTURE

OF EMPLOYMENT
In Chapters 2 and 3, you might have
studied about the planning strategies
in detail. Here we will look at two
developmental indicators growth of
employment and GDP. Sixty years of
planned development have been aimed
at expansion of the economy through
increase in national output and
employment.
During the period 19502010,
Gross Domestic Product (GDP) of India
grew positively and was higher than
the employment growth. However,
there was always fluctuation in the
growth of GDP. During this period,
employment grew at the rate of not
more than 2 per cent.
Chart 7.3 also points at another
disheartening development in the late
1990s: employment growth started
declining and reached the level of
growth that India had in the early
stages of planning. During these years,
we also find a widening gap between
the growth of GDP and employment.
This means that in the Indian economy,
without generating employment, we
have been able to produce more goods
INDIAN ECONOMIC DEVELOPMENT

and services. Scholars refer to this

phenomenon as jobless growth.
So far we have seen how
employment has grown in comparison
to GDP. Now it is necessary to know
how the growth pattern of employment
and GDP affected different sections of
workforce. From this we will also be
able to understand what types of
employment are generated in our
country.
Let us look at two indicators that
we have seen in the preceding sections
employment of people in various
industries and their status. We know
that India is an agrarian nation; a
major section of population lives in
rural areas and is dependent on
agriculture as their main livelihood.

Developmental strategies in many

countries, including India, have aimed
at reducing the proportion of people
depending on agriculture.
Distribution of workforce by
industrial sectors shows substantial
shift from farm work to non-farm work
(see Table 7.3). In 1972-73, about 74
per cent of workforce was engaged in
primary sector and in 2011-12, this
proportion has declined to about
50 per cent. Secondary and service
sectors are showing promising future
for the Indian workforce. You may
notice that the shares of these sectors
have increased from 11 to 24 per cent
and 15 to 27 per cent, respectively.
The distribution of workforce in
different status indicates that over the

Chart 7.3: Growth of Employment and Gross Domestic

Product, 19512012 (%)

EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES

125

TABLE 7.3
Trends in Employment Pattern (Sector-wise and Status-wise), 1972-2012 (in %)
Item

1972-73

1983

1993-94

1999-2000 2011-2012

Sector
Primary

74.3

68.6

64

60.4

48.9

Secondary

10.9

11.5

16

15.8

24.3

Services

14.8

16.9

20

23.8

26.8

100.0

100.0

100.0

100.0

100.0

Total

Status
Self-employed

61.4

57.3

54.6

52.6

52.0

Regular Salaried Employees

15.4

13.8

13.6

14.6

18.0

Casual Wage Labourers

23.2

28.9

31.8

32.8

30.0

100.0

100.0

100.0

100.0

100.0

Total

last four decades (1972 -2 012),

people have moved from selfemployment and regular salaried
employment to casual wage work. Yet
self-employment continues to be the
major employment provider. Scholars
call the process of moving from

self-employment and regular

salaried employment to casual wage
work as casualisation of workforce.
This makes the workers highly
vulnerable. How? Look at the case
study of Ahmedabad in the preceding
section.

Work These Out

Do you know that maintaining employment growth at 2 per cent for a country
like India is not an easy thing? Why?

What

will happen if there is no additional employment generated in the

economy even though we are able to produce goods and services in the
economy? How could jobless growth happen?

Economists

say that if casualisation increases the earning of the people,

such phenomenon should be welcomed. Suppose a marginal farmer becomes
a full-time agricultural labourer, do you think he will be happy even if he
earns more in his daily wage work? Or will a permanent and regular worker
of the pharmaceutical industry be happy if he becomes a daily wage labourer,
even if his or her overall earnings increase? Discuss in the classroom.

126

INDIAN ECONOMIC DEVELOPMENT

7.7 I N F O R M A L I S A T I O N
WORKFORCE

OF

INDIAN

In the previous section we have found

that the proportion of casual labourers
has been increasing. One of the objectives
of development planning in India, since
Indias independence, has been to
provide decent livelihood to its people. It
has been envisaged that the
industrialisation strategy would bring
surplus workers from agriculture to
industry with better standard of living as
in developed countries. We have seen in
the preceding section, that even after 55
years of planned development, more than
half of the Indian workforce depends on
farming as the major source of livelihood.
Economists argue that, over the
years, the quality of employment has
been deteriorating. Even after working for
more than 10-20 years, why do some
workers not get maternity benefit,
provident fund, gratuity and pension?
Why does a person working in the private
sector get a lower salary as compared to
another person doing the same work but
in the public sector?
You may find that a small section
of Indian workforce is getting regular
income. The government, through its

labour laws, enable them to protect

their rights in various ways. This
section of the workforce forms trade
unions, bargains with employers for
better wages and other social security
measures. Who are they? To know this
we classify workforce into two
categories: workers in formal and
informal sectors, which are also referred
to as organised and unorganised
sectors. All the public sector
establishments and those private
sector establishments which employ
10 hired workers or more are called
formal sector establishments and those
who work in such establishments are
formal sector workers. All other
enterprises and workers working in
those enterprises form the informal
sector. Thus, informal sector includes
millions of farmers, agricultural
labourers, owners of small enterprises
and people working in those enterprises
as also the self-employed who do not
have any hired workers. It also includes
all non-farm casual wage labourers
who work for more than one employer
such as construction workers and
headload workers.
Those who are working in the formal
sector enjoy social security benefits.

Box 7.1: Formal Sector Employment

The information relating to employment in the formal sector is collected by the
Union Ministry of Labour through employment exchanges located in different parts
of the country. Do you know who is the major employer in the formal sector in
India? In 2012, out of about 30 million formal sector workers, about 18 million
workers were employed by the public sector. Here also men form the majority, as
women constitute only about one-sixth of the formal sector workforce. Economists
point out that the reform process initiated in the early 1990s resulted in a decline
in the number of workers employed in the formal sector. What do you think?

EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES

127

Fig. 7.4 Road side vending: an increasing variety of informal sector employment

Number of Workers
(in million)

the country? About only six per cent

They earn more than those in the
(30/473100)! Thus, the rest 94 per
informal sector. Developmental
planning envisaged that as the economy
cent are in the informal sector. Out of
30 million formal sector workers, only
grows, more and more workers would
become formal sector workers and the
6 million, that is, only about 21 per cent
(30/6100) are women. In the informal
proportion of workers engaged in the
informal sector would dwindle.
sector, male workers account for 69 per
But what has happened in India?
cent of the workforce.
Look at the following
chart which gives Chart 7.4: Workers in Formal/ Informal Sector, 2009-2012
the distribution of
310
350
workforce in formal
300
and informal sectors.
In Section 7.2, we
250
24
learnt that there are
133
200
6
about 473 million
150
workers in the country.
100
There are about 30
50
million workers in the
0
formal sector. Can you
estimate the percentage
of people employed in
Male
Female
the formal sectors in
128

INDIAN ECONOMIC DEVELOPMENT

Box 7.2: Informalisation in Ahmedabad

Ahmedabad is a prosperous city with its wealth based on the produce of more
than 60 textile mills with a labour force of 1,50,000 workers employed in them.
These workers had, over the course of the century, acquired a certain degree
of income security. They had
secure jobs with a living
wage; they were covered by
social security schemes
protecting their health and
old age. They had a strong
trade union which not only
represented
them
in
disputes but also ran
activities for the welfare of
workers and their families.
In the early 1980s, textile
mills all over the country
began to close down. In some
places, such as Mumbai,
the mills closed rapidly. In
Change in the balance of power in a house: an
Ahmedabad, the process of
unemployed mill worker peeling garlic whereas his wife
closure was long drawn out
has a new job of beedi rolling.
and spread over 10 years.
Over this period, approximately over 80,000 permanent workers and over 50,000
non-permanent workers lost their jobs and were driven to the informal sector.
The city experienced an economic recession and public disturbances, especially
communal riots. A whole class of workers was thrown back from the middle
class into the informal sector, into poverty. There was widespread alcoholism
and suicides, children were withdrawn from school and sent to work.
Source: Renana Jhabvala, Ratna M. Sudarshan and Jeemol Unni (Ed.) Informal
Economy at Centre Stage: New Structures of Employment, Sage
Publications, New Delhi, 2003, pp.265.

Since the late 1970s, many

developing countries, including India,
started paying attention to enterprises
and workers in the informal sector as
employment in the formal sector is not
growing. Workers and enterprises in the
informal sector do not get regular income;
they do not have any protection or

regulation from the government. Workers

are dismissed without any compensation.
Technology used in the informal sector
enterprises is outdated; they also do not
maintain any accounts. Workers of this
sector live in slums and are squatters.
Of late, owing to the efforts of the
International Labour Organisation (ILO),

EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES

129

Work These Out

Tick () mark against those which are in the informal sector

Worker

in a hotel which has seven hired workers and three family workers

private school teacher in a school which has 25 teachers

police constable

Nurse

in a government hospital

Cycle-rickshaw
The

puller

owner of a textile shop employing nine workers

Driver

of a bus company which has more than 10 buses with 20 drivers,

conductors and other workers

Civil

engineer working in a construction company which has 10 workers

Computer

operator in the state government office working on a temporary

basis

clerk in the electricity office.

the Indian government has initiated the

modernisation of informal sector
enterprises and provision of social security
measures to informal sector
workers.

and ask whether there is any vacancy

in their factory or office. Many in
the rural areas do not go out and

7.8 UNEMPLOYMENT
You might have seen people
looking for jobs in
newspapers. Some look for
a job through friends
and relatives. In many
cities, you might find
people standing in some
select areas looking for
people to employ them
for that days work. Some
go to factories and offices
and give their bio-data
130

Fig. 7.5 Unemployed mill workers waiting for casual jobs

INDIAN ECONOMIC DEVELOPMENT

Directorate General of
Employment and Training
Data of Registration with
Employment Exchanges.
Though they provide
different estimates of
unemployment, they do
provide us with the
attributes
of
the
unemployed and the
variety of unemployment
prevailing in our country.
Do we have different
types of unemployment
Fig. 7.6 Sugar cane cutters: disguised unemployment is common in our economy? The
in farm works
situation described in the
first
paragraph
of this section is called
ask for a job but stay home when
open unemployment. Economists call
there is no work. Some go to
unemployment prevailing in Indian
employment exchanges and register
farms as disguised unemployment.
themselves for vacancies notified
What is disguised unemployment?
through employment exchanges. NSSO
Suppose a farmer has four acres of land
defines unemployment as a situation
and he actually needs only two workers
in which all those who, owing to lack
and himself to carry out various
of work, are not working but
operations on his farm in a year, but if
either seek work through employment
he employs five workers and his family
exchanges, intermediaries, friends or
members such as his wife and children,
relatives or by making applications to
this situation is known as disguised
prospective employers or express their
unemployment. One study conducted
willingness or availability for work
in the late 1950s showed about oneunder the prevailing condition of work
third of agriculture workers in India as
and remunerations. There are a variety
disguisedly unemployed.
of ways by which an unemployed
You may have noticed that many
person is identified. Economists define
people migrate to an urban area, pick
unemployed person as one who is not
up a job and stay there for some time,
able to get employment of even one
but come back to their home villages
hour in half a day.
as soon as the rainy season begins.
There are three sources of data on
Why do they do so? This is because
unemployment : Reports of Census of
work in agriculture is seasonal; there
India, National Sample Survey
are no employment opportunities in the
Organisations Reports of Employment
village for all months in the year. When
and Unemployment Situation and
EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES

131

employment to facilitate a
decent living for low
income families through
various measures. These
will be discussed in the
following section.

7.9 GOVERNMENT
EMPLOYMENT
GENERATION

AND

You may recall about

the National Rural
Employment Guarantee
Act 2005. It promises
100 days of guaranteed
wage employment to all
rural households who
Fig. 7.7 Dam construction work is a direct way of employment
volunteer to do unskilled
generation by the government
manual work. This
scheme is one of the many measures
there is no work to do on farms, people
governments implement to generate
go to urban areas and look for jobs.
employment for those who are in need
This kind of unemployment is known
of jobs in rural areas.
as seasonal unemployment. This is also
Since independence, the Union and
a common form of unemployment
state governments have played
prevailing in India.
an important role in generating
Though we have witnessed slow
employment or creating opportunities
growth of employment, have you seen
for employment generation. Their
people being unemployed over a very
efforts can be broadly categorised into
long time? Scholars says that in India,
two direct and indirect. In the first
people cannot remain completely
category, as you have seen in the
unemployed for very long because their
preceding section, government employs
desperate economic condition would
people in various departments for
not allow them to be so. You will rather
administrative purposes. It also runs
find them being forced to accept
industries, hotels and transport
jobs that nobody else would do,
companies and hence provides
unpleasant or even dangerous jobs in
employment directly to workers. When
unclean, unhealthy surroundings. The
output of goods and services from
central and state governments take
government enterprises increases, then
many initiatives and generate

132

INDIAN ECONOMIC DEVELOPMENT

private enterprises which receive raw

materials from government enterprises
will also raise their output and hence
increase the number of employment
opportunities in the economy. For
example, when a government owned steel
company increases its output, it will
result in direct increase in employment
in that government company.
Simultaneously, private companies,
which purchase steel from it, will also
increase their output and thus
employment. This is the indirect
generation of employment opportunities
by the government initiatives in the
economy.
In Chapter 4, you would have
noticed that many programmes that
the governments implement, aimed at
alleviating poverty, are through
employment generation. They are
also known as employment
generation programmes. All these
programmes aim at providing not
only employment but also services in
areas such as primary health, primary
education, rural drinking water,
nutrition, assistance for people to buy
income and employment generating
assets, development of community
assets
by
generating
wage
employment, construction of houses
and s anit at io n, assistance fo r
constructing houses, laying of rural
roads, development of wastelands/
degraded lands.

7.10 CONCLUSION
There has been a change in the
structure of workforce in India. Newly

emerging jobs are found mostly in the

service sector. The expansion of the
service sector and the advent of high
technology now frequently permit a
highly competitive existence for efficient
small scale and often individual
enterprises or specialist workers side by
side with the multinationals.
Outsourcing of work is becoming a
common practice. It means that a
big firm finds it profitable to close
down some of its specialist
departments (for example, legal or
computer programming or customer
service sections) and hand over a large
number of small piecemeal jobs to very
small enterprises or specialist
individuals, sometimes situated even in
other countries. The traditional notion
of the modern factory or office, as a
result, has been altering in such
a manner that for many the home
is becoming the workplace. All of
this change has not gone in favour
of the individual worker. The nature
of employment has become more
informal with only limited availability
of social security measures to the
workers.
In the last two decades, there
has been rapid growth in the gross
domestic product, but without
simultaneous increase in employment
opportunities. This has forced the
government to take up initiatives in
generating employment opportunities
particularly in the rural areas.

EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES

133

Recap

All

those persons who are engaged in various economic activities and

hence contribute to gross national product are workers.

About two-fifth of the total population in the country is engaged in various

economic activities.

Men

particularly rural men, form the major section of workforce in India.

Majority

of workers in India are self-employed. Casual wage labourers

and regular salaried employees together account for less than half the
proportion of Indias workforce.

About

three-fifth of Indias workforce depends on agriculture and other

allied activities as the major source of livelihood.

In

recent years, the growth of employment has decelerated.

During

post-reform period, India has been witness to employment

opportunities in the service sector. These new jobs are found mostly in
the informal sector and the nature of jobs is also mostly casual.

Government
Disguised

is the major formal sector employer in the country.

unemployment is a common form of unemployment in rural

India.

There

has been a change in the structure of the workforce in India.

Through

various schemes and policies, the government takes initiatives

to generate employment directly and indirectly.

EXERCISES

134

1.

Who is a worker?

2.

Define worker-population ratio.

3.

Are the following workers a beggar, a thief, a smuggler, a gambler?

Why?

INDIAN ECONOMIC DEVELOPMENT

4.

Find the odd man out (i) owner of a saloon (ii) a cobbler (iii) a cashier
in Mother Dairy (iv) a tuition master (v) transport operator
(vi) construction worker.

5.

The newly emerging jobs are found mostly in the

(service/manufacturing).

6.

An establishement with four hired workers is known as

(formal/informal) sector establishment.

7.

Raj is going to school. When he is not in school, you will find him
working in his farm. Can you consider him as a worker? Why?

8.

Compared to urban women, more rural women are found working.

Why?

9.

Meena is a housewife. Besides taking care of household chores, she

works in the cloth shop which is owned and operated by her husband.
Can she be considered as a worker? Why?

10.

Find the odd man out (i) rickshaw puller who works under a rickshaw owner (ii) mason (iii) mechanic shop worker (iv) shoeshine boy.

11.

The following table shows distribution of workforce in India for the

year 1972-73. Analyse it and give reasons for the nature of workforce
distribution. You will notice that the data is pertaining to the situation
in India 30 years ago!
Place of Residence

12.

sector

Workforce (in millions)

Male

Female

Total

Rural

125

69

195

Urban

32

39

The following table shows the population and worker population ratio
for India in 1999-2000. Can you estimate the workforce (urban and
total) for India?
Region

Estimates of
Population
(in crores)

Worker
Population
Ratio

Rural

71.88

41.9

Urban

28.52

33.7

100.40

39.5

Total

Estimated
No. of Workers
(in crores)
71.88 41.9 = 30.12
100
?

EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES

135

13.

Why are regular salaried employees more in urban areas than in

rural areas?

14.

Why are less women found in regular salaried employment?

15.

Analyse the recent trends in sectoral distribution of workforce in India.

16.

Compared to the 1970s, there has hardly been any change in the
distribution of workforce across various industries. Comment.

17.

Do you think that in the last 50 years, employment generated in the

country is commensurate with the growth of GDP in India? How?

18.

Is it necessary to generate employment in the formal sector rather

than in the informal sector? Why?

19.

Victor is able to get work only for two hours in a day. Rest of the day,
he is looking for work. Is he unemployed? Why? What kind of jobs
could persons like Victor be doing?

20.

You are residing in a village. If you are asked to advice the village
panchayat, what kinds of activities would you suggest for the
improvement of your village which would also generate employment.

21.

Who is a casual wage labourer?

22.

How will you know whether a worker is working in the informal sector?

SUGGESTED ADDITIONAL ACTIVITIES

136

1.

Select a region, say a street or colony, and divide it into 3-4

sub-regions. Conduct a survey by which you can collect the details
of activity each person living there is engaged in. Derive the
worker-population ratio for all the regions. Interpret the results for
differences in worker-population ratio for the different sub-regions.

2.

Suppose 3-4 groups of students are given different regions of a state.

One region is mainly engaged in cultivation of paddy. In another region,
coconut is the main plantation. The third region is a coastal region
where fishing is the main activity. The fourth region has a river nearby
with a lot of livestock rearing activities. Ask all the four groups to
develop a report on what kind of employment could be generated in
the four regions.

3.

Visit the local library and ask for Employment News, a weekly published
by the Government of India. Go through each issue for the last two
months. There will be seven issues. Select 25 advertisements and
INDIAN ECONOMIC DEVELOPMENT

fill in the following table (expand the table as needed). Discuss the
nature of jobs in the classroom.
Items
1.
2.
3.
4.
5.

Advertisement 1

Advertisement 2

Name of Office
Department/company
Private/public/joint venture
Name of the post
Sectorprimary/seconday/
service
Number of posts/vacancies
Qualification required

6.
7.
4.

You might notice, in your locality, a variety of works being done by

the government, for example laying of roads, desilting of tanks,
construction of school buildings, hospital and other government
offices, construction of check dams and houses for the poor etc.
Prepare a critical assessment report on one such activity. The issues
covered could be the following (i) how the work was identified (ii)
amount sanctioned (iii) contribution of local people, if any (iv) number
of persons involved both men and women (v) wages paid (vi) is it
really required in that area and other critical comments on the
implementation of the scheme under which the work is being carried
out.

5.

In recent years, you may have noticed that many voluntary

organisations also take initiatives to generate employment in hilly
and dry land regions. If you find such initiatives in your locality, visit
and prepare a report.
REFERENCES

CHADHA, G.K. and P.P. SAHU, 2002. Post-reform Setbacks in Rural Employment:
Issues that need further scrutiny. Economic and Political Weekly, May
25, pp.1998-2026.
DESAI, S and M.B.DAS. 2004. Is Employment Driving Indias Growth Surge,
Economic and Political Weekly, July 3, pp. 3045-3051.
GHOSE, AJIT K. 1999. Current Issues of Employment Policy in India. Economic
and Political Weekly, September 4, pp. 2592-2608.
HIRWAY, INDIRA. 2002. Employment and Unemployment Situation in 1990s:
How Good are NSS Data. Economic and Political Weekly, May 25,
pp. 2027-2036.
EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES

137

J ACOB, PAUL. 1986. Concept of work and estimates of workforce An

appraisal of the treatment of activities relating to non-marketed output,
Sarvekshana, Vol.IX, No.4, April.
KULSHRESHTHA, A.C., GULAB SINGH, ALOK KAR and R.L. MISHRA. 2000. Workforce in
the Indian National Accounts Statistics, The Journal of Income and Wealth,
Vol.22, No.2, July, pp. 3-39.
PRADHAN, B.K. and M.R.SALUJA. 1996. Labour Statistics in India: A Review.
Margin, July- September, Vol.28, Number 4, pp. 319-347.
RATH, NILAKANTHA. 2001. Data on Employment, Unemployment and Education:
Wher e to go from here? Economic and Political Weekly, June 9,
pp. 2081-2087.
SUNDARAM, K. 2001. Employment-Unemployment Situation in the Nineties:
Some Results from NSS 55th Round Survey, Economic and Political
Weekly, March 17, pp. 931-940.
SUNDARAM, K. 2001. Employment and Poverty in 1990s: Further Results from
NSS 55th Round Employment-Unemployment Survey, 1999-2000,
Economic and Political Weekly, August 11, pp. 3039-3049.
V ISARIA, PRAVIN. 1996. Structure of the Indian Workforce, 1961-1994, The
Indian Journal of Labour Economics, Vol.39, No.4, pp. 725-740.
Government Reports
Annual Reports, Ministry of Labour, Government of India, Delhi.
Census of India 2011, Primary Census Abstract, Registrar General of Census
Operations, Ministry of Home Affairs, Government of India, Delhi.
Economic Survey, Ministry of Finance, Government of India.
Reports on Employment and Unemployment Situation in India, Ministry of
Statistics and Planning, Government of India.
Websites
www.censusofindia.nic.in
www.mospi.nic.in

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