Rural Employment Trends from the Census
It
is already common knowledge that employment growth has been a major
casualty of the decade of liberalising reform. The inadequate pace of
employment generation has been so evident that even the Finance
Ministry’s annual Economic Survey, which has rarely devoted much
attention to the issue in the recent past, has been forced to take note.
Of
course, official sources have attributed the slowdown in employment
generation to the slowdown in the rate of increase in the labour force,
which they claim is a combination of lower population growth and greater
involvement in education on the part of the 15-19 age cohort. Both of
these are obviously to be welcomed. However, it was already clear from
the NSS survey data that these two factors are not adequate to explain
the slowdown in aggregate employment generation, especially in the rural
areas.
In
addition, because these assessments of employment generation were based
only on the National Sample Surveys, many had argued that they were not
sufficient to indicate the real trends over the 1990s. For this reason,
the results of the 2001 Census have been eagerly awaited.
The
first estimates from the 2001 Census relating to employment, work
participation and even employment by industrial category are now
available. They do indicate a slightly different pattern in terms of
employment growth, from the trends emerging from the NSS. However, the
pattern that emerges may be even more worrying from the point of view of
macroeconomic strategy.
In
this piece we consider only rural trends; the evidence pertaining to
urban employment will be considered in a later edition of Macroscan.
Chart 1 describes the trends in worker-population ratios in the rural
areas at an All-India level. It is immediately apparent that there is no
drop in this ratio in 2001, unlike the 1999-2000 NSS which showed a
decline in this ratio.
Thus,
according to the NSS, rural male employment fell from 55.3 per cent of
the rural male population in 1990-91 to 53.1 per cent in 1999-2000,
while that for females remained broadly the same at around 29 per cent.
The Census data show apparent stability in male worker-population rates
over this period, especially when compared to earlier decades. And the
ratio for rural females has gone up quite significantly.
This
would appear to bely the more pessimistic conclusions about rural
employment generation that had emerged from the NSS data. However, it
turns out that the aggregate data refers to both main and marginal
workers, and a disaggregated look provides a very different analysis. If
only main workers are considered, the decade 1991-2001 has witnessed a
very sharp decline in the proportion of main workers to total
population. As Chart 2 indicates, this is especially marked for male
main workers, whose share has fallen by nearly 7 percentage points.
The
Census category “main workers” refers to those who had worked in
some economic activity for the major part of the year, that is for a
period of six months (183 days) or more. Work of course, is defined as
participation in any economically productive activity, but this still
excludes a range of unpaid household work. “Marginal workers” refers
to those who had worked for some time during the previous year, but not
for the major part, i.e. less than 183 days. They are therefore mutually
exclusive categories, analagous but not identical to the NSS categories
of “principal” and “subsidiary” occupations.
It
is not known whether the definition of work has been used more flexibly
in the 2001 Census to incorporate some forms of unpaid labour, which
were previously not included. But even if this has occurred, it has
clearly not been sufficient to increase the worker population ratios
significantly in the rural areas. What is clear is that there is a
substantial slowdown in the generation of employment that would qualify
for “main work”, in other words that there has not been an increase
in the availability of employment that would keep people productively
occupied for half a year or more.
This
is quite compatible with the NSS evidence on decline in terms of the
usual status definition of employment, as shown in Chart 3. Indeed, the
Census data suggest an even sharper downward shift, especially for rural
males.
However,
if does suggest a different picture from that mentioned in the Census of
India’s own description, which argues that there is a “substantial
increase in female work participation rate”. As we have seen, the
increase is actually quite small, and in any case is composed entirely
of an increase in the proportion of marginal workers. Main workers have
actually gone down as a share of population even in the case of females.
The
pattern is repeated even with a disaggregated analysis of rural
employment in the states, described in Table 1 (total worker-population
ratios) and Table 2 (main worker-population ratios). For the male
population in most states, total worker to population ratios remained
broadly the same over the decade, with the exception of a substantial
increase in Kerala and marginal increases in Karnataka, Tamil Nadu and
West Bengal. There were declines even in total worker-population ratios
in Orissa, Punjab and Utter Pradesh.
However,
as Table 2 shows, the decline in main worker-population ratios was
spread uniformly across all the states. Every single state showed a
decline in this ratio by at least 3-4 percentage points for rural males.
In some states, such as Orissa and Uttar Pradesh, the decline was
especially sharp and amounted to as much as 10 or more percentage
points, or more than 20 per cent of the proportion of those in such
employment.
This
fact of falling main worker-population rates has an important bearing on
the subsequent analysis with respect to the type of economic activity
that the rural workforce is engaged in. One feature which always excites
much discussion is the degree of diversification of the rural workforce,
or the proportion of agriculture in total rural employment. This has
been one feature which also appears stubbornly resistant to change
according to Census results, compared with the NSS data which has shown
greater variation over time in this regard. Thus, Chart 4 shows that the
extent of decline in agriculture’s share of total rural employment has
been gentle and less than moderate, and remained very high at around
four-fifths of the rural workforce.
Note
that this refers only to main workers, and indeed in all the previous
Censuses, the industrial classification of workers has been presented
only for main workers. However, for the 2001 Census the data presented
so far relates only to main plus marginal workers together. This renders
the latest data completely non-comparable with the earlier
series. It is not known why the Census of India decided to present the
data in this manner, which does not allow for comparison or estimates of
trends over time.
This
is especially unfortunate as the latest Census shows the total
employment (main plus marginal) in agriculture to be fairly low. There
are indicated in Charts 5 and 6. However, because they relate to all
workers, and because as we have seen, there is a very substantial shift
in favour of marginal workers and a decline in the share of main
workers, this cannot at all be compared with the classifications of
earlier Census data based on main workers only.
This
has not prevented the organisation from making statements which are not
justified by the data that it has presented. According to the Census of
India’s website, “The results from the 2001 Census clearly suggest a
shift in the composition of the labour force from a predominantly
agriculture to a moderately non-agriculture sector”. Such a conclusion
would only be justified if it could be seen that the share of
agriculture has fallen for main workers only, or that the share of
agriculture was higher for both main and marginal workers together in
the 1991 Census.
Further,
since information relating to type of employment (self-employment,
regular or casual work) is not part of this dataset, we cannot tell what
form even the new marginal work in non-agriculture appears to be taking.
The important point to note is that we do not have adequate evidence to
declare that there is actually a diversification of rural employment
away from agriculture, and certainly cannot make the further judgement
that such diversification is of the progressive variety associated with
a dynamic economy.
In
sum, it is clear that employment generation in the rural sector has been
much less than adequate even after all the increases in marginal workers
are accounted for. Charts 7 and 8 indicate the absolute increase in
number of main and marginal rural workers respectively. As Chart 9
shows, the number of male main workers increased very little over the
decade, by just above 5 million, while the increase in female main
workers was less than 3 million. By contrast, the number of marginal
workers increased by 26 million for rural men and 27 million for rural
women.
This
is confirmed by the annual growth rates of employment reflected in the
absolute increases, as described in Table 3. While the aggregate
employment growth appear to be slightly better than described through
the NSS Surveys, at 1.7 per cent for males and 3.2 per cent for females,
the increase in main employment is much lower than even the increase in
usual status employment indicated by the NSS. Indeed, it is less than
half of one per cent per annum for both men and women. So the story of
collapse of rural employment generation in the 1990s, which had emerged
from the NSS Surveys, appears to be largely corroborated by the latest
Census data as well.
