Whatever Happened to Employment: India’s Recent Record from a Nationally Representative Sample

Abstract

The principal guiding force of managing the Indian economy for close to three decades now is the neoliberal economic order. This has undisputedly given rise to two major challenges, accepted by even the most ardent votaries of neoliberalism, namely, rise in inequality and dismal performance on the employment front. This has led to severe discontent among the masses, which has been very effectively exploited by the political right to mobilize people in the name of religion, national security and the myth of a strong leader, among others. However, the question as to what the right-populist force in India has to offer to solve the crisis ushered in by neoliberalism remains open. In this chapter, we document the outcome on the employment front, which broadly coincides with the first-term of the right-populist government in office.

Evidence suggests, ‘the population aged 15 to 59 years is set to increase dramatically in India from around 757 million in 2010 to 972 million in 2030. This could potentially translate into an addition of over 200 million workers over the next two decades’ (Thomas, Economic and Political Weekly, 49(6), 15–16, 2014). This is the so-called demographic dividend India is supposed to reap. But so far, results from the earlier nationwide National Sample Survey (NSS) surveys suggest, except for the period 1999–2000 to 2004–05, employment growth in India has been dismal. To be sure, this has not necessarily translated to high open unemployment rates—not making it a talking point—since student-population ratio went up. However, down the line these people have completed education and are now in the labour market—probably explaining the highest unemployment rate of 6.1% in 45 years.

Initial analysis of Periodic Labour Force Survey (PLFS) 2017-18 data suggests, at all India level, ‘the proportion of employed persons in the rural working age population [15–59 years] fell by about 6.8 percentage points for men and a whopping 11.7 percentage points for women. In urban areas also the worker population ratios fell—by 4.2 percentage points for working age men and 1.2 percentage points for working age women’ (Rawal and Bansal 2019). This is true for all age groups across every single segment. Further, this decline is visible in agriculture (secularly happening since 2004–05) but most disturbingly now spreading to the construction sector as well. Construction came as a saviour between 2004–05 and 2011–12, amidst employment stagnation/decline in traditional labour absorbing sectors of the economy and it was considered to be the employer of last resort. PLFS 2017-18 data shows for rural and urban men, proportion of workers employed in construction went up by just 0.4%; it stagnated for urban women and fell by 0.7% for rural women.

However, a detailed analysis of PLFS data is necessary to understand the disaggregated employment trend between 2011–12 and 2017–18. It is important to note that unemployment rate went up even as labour force participation rate (LFPR) registered a fall—clearly pointing towards a contraction of employment at the aggregate level. How has this spread over different segments of the population? What are people outside the labour force mainly doing as principal status activity? What is the distribution of working population across broad industry groups? With signs that employment is not picking up—what has happened to wage growth? What is the nature of employment contract predominant in the economy? How do we assess the quality of jobs? These are some of the questions this chapter tries to answer.

It is important to bring back questions of livelihoods of the masses to centre-stage, because, it is only through discussion of real issues that affect people can we restore democratic functioning of society.

Appendix

Table 12.19 Age-specific LFPR