EMPLOYMENT : GROWTH,
INFORMALISATION AND OTHER
ISSUES
Objectives
● 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.
Answering some important questions
● What is employment?
● Who is a worker?
● What are economic activities?
● Types of employment?
Regular income
Analyse this newspaper article
During 2017-18, India had about a 471 million strong workforce. Since majority of
our people reside in rural areas, the proportion of workforce residing there is
higher. The rural workers constitute about two thirds of this 471 million. Men form
the majority of workforce in India. About 77 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-fourth 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.
Infer the following table
Change in employment structure in India
● 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, at a much later stage, the industrial sector begins to lose its share
of total employment as the service sector enters a period of rapid expansion.
● This shift can be understood by looking at the distribution of workers by
industry
Inference from the above table
Between 1972 - 94
In the meantime you also notice in 2017-18 a moderate rise in the share of
regular salaried employees. How do you explain this phenomenon?
Inference from the above chart
Informalisation of employment
Employment structure can be classified as:
● Formal sector employment
● Informal sector employment
Formal sector Informal sector
1. Refers to the organised sector of the 1. Refers to the unorganised sector of the
economy economy
2. Includes all public and private 2. Includes all private establishments
establishments which hire 10 or more which hire less than 10 workers
workers 3. Workers are not entitled to social
3. Workers are entitled to social security security benefits (pension, PF)
benefits (pension, PF) 4. Workers are not protected by labour
4. Workers are protected by labour laws laws
5. Workers of these sectors are called 5. It provides employment to more than
formal sector workers 90% of the workforce
Informalisation of Indian workforce
Informalisation of Indian workforce
Data for the year 2011-12
What do you infer?
Observations in Indian economy
● One of the objectives of development planning in India, since India’s
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.
● However, even after 70 years of planned development, close to half of the
Indian workforce depends on farming as the major source of livelihood.
● Developmental planning envisaged that as the economy grows, more and
more workers would become formal sector workers and the proportion of
workers engaged in the informal sector would dwindle. But what has
happened in India?
Government’s efforts / initiatives to help informal
sector workers
● 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), the
Indian government has initiated the modernisation of informal sector
enterprises and provision of social security measures to informal sector
workers.
Government initiatives for employment generation
● Mahatma Gandhi National Rural Employment Guarantee Act 2005. It
promises 100 days of guaranteed wage employment to all rural households
who volunteer to do unskilled manual work. The scheme based on this Act is
one of the many measures the government has implemented to generate
employment for those who are in need of jobs in rural areas.
● Since Independence, the Union and State governments have played an
important role in generating employment or creating opportunities for
employment generation. Their efforts can be broadly categorised into two —
direct and indirect.
Government initiatives for employment generation
● The government employs people in various departments for administrative
purposes. It also runs industries, hotels and transport companies, and hence,
provides employment directly to workers.
● When the output of goods and services from government enterprises
increases, then 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
Thank You !
