Job growth statistics conceal agrarian crisis

By Richard Mahapatra
Published: Saturday 31 March 2007

Job growth statistics conceal agrarian crisis

-- (Credit: PRADIP SAHA / CSE)Should we feel comfortable with the latest government claim that unemployment is coming down? The government says unemployment has come down due to growth. During the 2006-07 budget, finance minister P Chidambaram reiterated that growth rate must go up further for unemployment to go down.

Development economists and government agencies like the Planning Commission, on the other hand, say the low unemployment rate hides a much more acute crisis in rural areas. According to them the trend of increasing self-employment is pulling the unemployment figures down. But self-employment is not necessarily a positive indicator of the rural employment scenario.

According to the National Sample Survey Organisation's (nsso) 61st round of nationwide surveys, the unemployment rate has come down as more and more people are becoming 'self-employed'. Employment growth is sharp in rural areas: from around 0.6 per cent during 1994-2000 to around 1.9 per cent during 2000-2005. Overall employment growth accelerated to 2.8 per cent during 1999-2005. The increase in self-employment has been the sharpest among rural women, accounting for nearly two-thirds of all jobs.

"The rise in self-employment is something we should carefully analyse. It is clear that self-employment is distress-driven rather than a fallout of availability of productive livelihood options," says Jayati Ghose of Jawaharlal Nehru University's Centre for Economic Studies and Planning. She points out that agriculture, the largest employer, has stopped creating jobs.

Employment in agriculture has grown at less than 1 per cent during 2000-05. Unemployment among agricultural households has increased from 9.5 per cent in 1993-94 to 15.3 per cent in 2004-05. But there has been a significant decline in wage employment in general: from 45 per cent during 1999-2000 to around 42 per cent during 2004-05. Which means, there are a large number of people who are not finding jobs in agriculture as well under daily wage schemes. They are probably the growing breed of 'self-employed' people.

The inference that the self-employed are driven by the dearth of regular jobs, is supported by nsso data. They are usually less educated without access to capital and are forced into low-productivity jobs. The Planning Commission says 4.7 per cent growth in non-agricultural jobs during 1999-2005 was entirely in low-productive and unorganised self-employment. "Given the characteristic of the workforce in India, it indicates that this change is distress-driven," says C P Chandrasekhar of Jawaharlal Nehru University.

Out of the total population of 1.1 billion, according to the Union ministry of labour and employment, 469 million constitute its workforce. Ninety per cent of its workshop is in the unorganised sector. Data show that over 70 per cent of the labour force is illiterate. Around 140 million casual workers constituting about 30 per cent of the workforce have no regular work or income. These are the self-employed people at the receiving end of the agrarian crisis.

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