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In an economy such as that of
India, the
generation of productive employment opportunities spread over a wide base
of population is obviously the key to any sustainable economic expansion,
as well the reduction of poverty and more equitable distribution of
income. Indeed, the inability to generate such employment, thus improving
aggregate productivity of labour in the Indian economy rather than just in
a few chosen sectors, has been the most obvious symptom of the failure of
the Indian economic development process.
The marketist economic "reforms" of the 1990s were not specifically
directed at employment, however. Despite this, the stated expectation of
policy makers over this period has been that liberalising markets, easing
the conditions for entry and operation of foreign investors and
encouraging exports especially in agriculture, would all contribute to
more employment generation. Thus, this was supposed to be a positive
fallout of the new economic strategy. And since the expansion and
diversification of rural employment in particular has been associated with
declining levels of rural poverty over the 1980s, this was also expected
to lead to a decline in poverty.
The data recently released by the National Sample Survey
Organisation allow for an investigation into all-India trends in
employment patterns and trends in poverty incidence, based on annual
surveys conducted since 1990-91. There has already been much discussion of
what the data on consumer expenditure suggest with respect to poverty, in
particular the disturbing finding that rural poverty in particular has not
declined after the reforms but may even have increased. But the observed
pattern of trends in employment have been less noted. In this piece, we
deal with rural employment patterns at the all-India level.
The annual surveys provide an important picture of how employment
generation has changed in the Indian economy in the era of reforms. It
should be noted that these annual surveys, which have been conducted since
1990-91, relate to a smaller number of households than the much larger
quinquennial surveys, the last of which was held in 1993-94. Thus they
have covered between 27,000 and 29,000 households rather than 1.3 lakh
households in the larger sample. For this reason, the results tend to be
less reliable estimates in terms of all indicators at the state level.
However, at the all-India level they continue to be statistically relevant
and reliable indicators, except possibly for those variables (such as
unemployment) for which the proportion of population is rather low.
In what follows, therefore, we consider the all-India trends only,
in terms of arriving at some idea of the trends in overall employment
generation and pattern of employment in terms of sector and type of
activity.
A further note on the definitions used in the data is in order. The
NSS data on employment is based on the distinction between "principal" and
"subsidiary" status of activity as well whether the person is "usually"
engaged in the activity. Thus, a person is classified as "usual principal
status" according to the status of the activity (or non-activity) on which
the person spent a relatively longer time of the preceding year. The
activities pursued by a person are grouped into three broad categories :
(a) working or employed (b) seeking or available for work (i.e.
unemployed) and (c) not in the labour force.
A "non-worker" (on the basis of the usual principal status) is
someone whose major part of time in the preceding year was spent as either
unemployed or not in the labour force. However, he or she could still be
involved in some economic activity in a subsidiary capacity - when this is
usually the case the person is referred to as a "subsidiary status
worker".
The two categories together - usual workers by both principal and
subsidiary status - constitute "all usual workers". In the discussion
below, we consider "all workers" - that is both principal and subsidiary,
so as to allow for a comparison over time. However, it should be noted
that this could in fact overestimate the extent of employment, on average
by around 2 per cent of the population.
The "current weekly status" definition is one which classifies a
person as employed if he/she was engaged in any one of the gainful
occupations listed for at least one hour on any one day of the previous
week. The activity assigned to the person then depends upon which activity
he/she had spent the most amount of time on. Both the usual status and the
weekly status provide stock measures of employment, but the usual status
definition is likely to be less reflective of the transient character of
the timing of the survey and be less affected by seasonal and short-run
factors.
Economic activity is defined by the NSSO as any activity that
results in the production of goods and services that adds value to the
national product. These in turn are both market activities and non-market
activities. The non-market activities encompass all activities relating to
the agricultural sector and gathering of primary produce for consumption,
and activities relating to the own account production of fixed assets such
as houses, roads and wells or even machinery for household enterprise.
It should be noted that this definition of economic activity is
still quite restrictive, and does not include the full spectrum of
economic activities defined in the UN System of National Accounts. It
therefore excludes a significant amount of unpaid or non-marketed labour
within the household, especially by women, including the processing of
primary produce for own consumption, services such as cleaning, child care
and so on, which are undertaken within the household and not marketed.
This means there is a likely underestimation of economic activity within
the household, as well as of the work participation rates especially of
women.
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