EMPLOYMENT:GROWT

H, INFORMALISATION
AND OTHER ISSUES
SEMINAR
 INTRODUCTION
Work plays an important role in our lives as individuals and as
members of society. People work for ‘earning’ a living.
Being employed in work gives us a sense of self-worth and enables
us to relate ourselves meaningfully with others.
Every working person is actively contributing to national income and
hence, the development of the country by engaging in various
economic activities — that is the real meaning of ‘earning’ a living.
we also have a sense of accomplishment when we work to meet the
requirements of those who are dependent on us.
 WORKERS AND EMPLOYMENT
Those activities which contribute to the gross national product are
called economic activities.
All those who are engaged in economic activities, in whatever
capacity — high or low, are workers. Even if some of them
temporarily abstain from work due to illness, injury or other physical
disability, bad weather, festivals, social or religious functions, they
are also workers. Workers also include all those who help the main
workers in these activities. We generally think of only those who are
paid by an employer for their work as workers. This is not so. Those
who are self-employed are also workers.
• The nature of employment in India is multifaceted. Some get employment
throughout the year; some others get employed for only a few months in a year.
• Many workers do not get fair wages for their work. While estimating the number
of workers, all those who are engaged in economic activities are included as
employed.
• During 2011-12, India had about a 473 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 threefourth of this 473 million.
• Women workers account for one-third 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.
 PARTICIPATION OF PEOLPLE IN
EMPLOYMENT
Worker-population ratio:-
o Its an indicator which is used for analysing the employment situation in the country. This ratio
is useful in knowing the proportion of population that is actively contributing to the production
of goods and services of a country.
Population:-
oIt is defined as the total number of people
who reside in a particular locality at a particular point of time.
oWorker ratio is calculated by dividing the total
number of workers in that country by population in that country and multiplying it by 100.
• In urban areas ,the proportion is about 34 whereas in rural areas, the proportion is about
35 . Why there is such a difference? It’s because the people in rural areas have limited
resources to earn a high income . Many do not go to schools, colleges etc. even if some
go ,they discontinue in the middle to join in workforce.
• Whereas in urban areas ,a considerable section is able to study in various educational
institutions. Urban people have a variety of employment opportunities. They look for the
appropriate job to suit their qualifications and skills. But in rural areas, people cannot stay
at home as their economic conditions may not allow them to do so.
• Compared to females, more males are found to be working. In urban areas, for every 100
urban females, only about 14 are engaged in some economic activities. In rural areas, for
every 100 rural females about 18 participate in the employment market. It is common to
find that where men are able to earn high incomes, Families discourage female members
from taking up jobs .
• Many household activities done by women are not recognised as productive work. This
narrow definition of work leads to non recognition of women’s work and therefore to the
underestimation of the number of women workers in the country.
 SELF EMPLOYED AND HIRED
WORKERS
Self employed - Workers who own and operate an
enterprise to earn their livelihood.
Casual workers - Casual workers are those workers who are
not hired by their employers on a regular basis.
Regular salaried employees - Workers who is engaged by
someone or an enterprise and paid his or her wages on a
regular basis.
• Self employed is a major source of livelihood for
both men and women as this category accounts for
more than 50% of the workforce.
• Casual workforce is the second major source of both
men and women
• In regular salaried employment both women and
men are engaged in greater proportion.

• Self employed and casual labourers are found more in rural areas
than in urban areas.

 In the latter, both self-employment and regular

wage salaried jobs are greater. In the former,
since majority of those depending on farming
own plots of land and cultivate independently,
the share of self-employed is greater.
 EMPLOYMENT IN FIRMS,
FACTORIES AND OFFICES
Labour starts to flow from agriculture activities to industrial and service sectors.

Workers migrate from rural to urban areas

Industrial sector lose its share of total employment due to rapid growth or expansion of service sector.

According to the distribution of workers by industry ,economics activities are classified into eight divisions -:

Agricultural

mining and quarrying

manufacturing

electricity, gas and water supply

construction

Trade

Transport and Storage

Services

All these comes under the major 3 sectors-: ^Primary sector ^ Secondary sector ^ Tertiary sector
• Primary sector is the main source of employment in majority of people in India
• Secondary sector only provides 24 percent employment out of total workforce
and 31 percent in service sector
• 60percent of rural workers depend on agriculture whereas only remaining 20 is
in the manufacturing sector
• Service sector provides 20 percent of employment in rural areas
• Urban areas are mostly engaged in service sectors rather than in agricultural
sector
• Both men and women are employed in primary sectors and women are very
high there.
• Almost 57 percent of female workforce are employed in agricultural sector and
less than half of males work in those sectors.
• Men get employment opportunities in both the secondary and service sector
apart from primary sectors.
 GROWTH AND CHANGING
STRUCTURE OF EMPLOYMENT
Nearly sixty years of planned development have been aimed at
expansion of the economy through increase in national output
and employment.
During the period 1950–2010, Gross Domestic Product (GDP) of
India grew positively and was higher than the employment
growth.
However, there was always fluctuation in the growth of GDP.
During this period, employment grew at the rate of not more
than 2 per cent.
• in the late 1990s: employment growth started
declining and we also find a widening gap between
the growth of GDP and employment.
• This means that in the Indian economy, without
generating employment, we have been able to
produce more goods and services. Scholars refer to
this phenomenon as jobless growth.

• There are two indicators that we have seen in the preceding sections — employment of
people in various industries and their status.
• India is an agrarian nation; a major section of population lives in rural areas and is
dependent on agriculture as their main livelihood.
• Developmental strategies in many countries, including India, have aimed at reducing
the proportion of people depending on agriculture.
• Developmental strategies in many countries, including India, have aimed at reducing
the proportion of people depending on agriculture.
• In 1972-73, about 74 per cent of workforce was engaged in primary sector and in 2011-12, this
proportion has declined to about 50 per cent. Secondary and service sectors are showing
promising future for the Indian workforce. You may notice that the shares of these sectors have
increased from 11 to 24 per cent and 15 to 27 per cent, respectively.
• The distribution of workforce in different status indicates that over the last four decades (1972-
2012), people have moved from self-employment and regular salaried employment to casual
wage work. Yet self-employment continues to be the major employment provider. Scholars call
the process of moving from self-employment and regular salaried employment to casual wage
work as casualization of workforce.
 INFORMALISATION OF INDIAN
WORKFORCE
One of the main objectives of development in India is to provide
decent livelihood to the people. For this they used the
industrialization strategy.
Industrialization structure is to bring surplus workers from
agricultural sector to the industrial sector with better standards of
living.
However even after 70 years, half of India's workforce still depends
on farming and the quality of employment has been deteriorating.
So, to solve these problems, there are different sectors that provide
employment. These are classified mainly into two:
1. Formal sector (i.e. organised sector) : All the public sector
establishments and those private sector establishments which employ
10 hired workers or more are called formal sector establishments and
those who work in such establishments are formal sector workers.
Benefits:-
• They enjoy social security benefits.
• Earn more than the people working in the informal sector.
2. Informal sector (i.e. unorganised sector) : All the other enterprises and
workers form the informal sector. This includes owners of small
enterprises, self employed people, agricultural labourers, construction
workers etc.
Development planning envisioned 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 decrease.
However according to the 2011-12 survey –
•There were about 473 million workers in India, out of which only 30 million workers are in
the formal sector (i.e only 6%). Rest of the 96% work in the informal sector.
• Out of 30 million formal sector workers, only 6 million (i.e. only about 21%) are women.
• In the informal sector, male workers account for 69% of the workforce
BOX 7.1 – FORMAL SECTOR EMPLOYMENT
the information relating to employment in formal sector is collected by the union
ministry of labor through employment exchanges located in various parts of the country
•in 2012 approximately 30 million workers were employed in the formal sector
•out of which 18 million were employed by the public sector
•here also men form the majority as women constitute only ⅙the of the formal
workforce
•economists point out that the reform process initiated in the early 1990s led to a
decline in the formal sector's workforce
•the reforms focused on market efficiency, foreign investment and technological
advancements but did not necessarily focus on the need for labor intensive growth
•the shift towards high-tech industries and services while beneficial for the growth of
GDP did not generate sufficient employment
BOX 7.2 INFORMALISATION IN AHMEDABAD –
•Ahmedabad is a prosperous city whose main wealth is based on the produce of more than
60 textile Mills with a labour force of 1,50,000 workers employed in them
•These workers gradually acquired several income and social security benefits
•They had a strong trade union which not only represented them in disputes but also ran
activities for the welfare of the workers and their families
•In the early 1980s textile Mills all over the country started closing down, in some places like
Mumbai this more rapid than ever
•However in Ahmedabad the closure process was long drawn and spread over a span of 10
years
•Over this period approximately 80,000 permanent workers and 50,000 non permanent
workers lost their jobs and were driven to the informal sector
•The city experienced an economic recession, public disturbances, especially communal
riots
•A whole class of workers were thrown from middle class into the informal sector and
poverty
•Due to which there was widespread alcoholism, suicides, children being drawn out of
schools etc.
MODERNISATION OF THE INFORMAL SECTOR –
•Since the late 1970s many developing countries including India have started
to pay attention enterprises and workers in the informal sector as employment
in the formal sector is not growing
•Workers in the informal sector do not get regular income; they do not have
any protection from the govt. Workers are dismissed without any
compensation, Technology used in the informal sector is outdated; they also
do not maintain any accounts thus workers of this sector are usually poor and
live in slums
•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 schemes to the workers in the
informal sector
 UNEMPLOYMENT
Nsso defines unemployment as: A situation in which all those who, owing to
lack of work, are not working but either seek work through employment
exchanges, intermediaries, friends or relatives or by making application to the
employers or express their willingness or availability for work under the
prevailing condition of work and remunerations.
Economists define unemployed person as: One who is not able to get
employment of even one hour in half a day.
Three sources of data on unemployment :
Reports of Census of India, National Sample Survey Organization's Reports of
Employment and Unemployment Situation, Directorate General of Employment
and Training Data of Registration with Employment Exchanges.
 GOVERNMENT AND
EMPLOYMENT GENERATION
The government generates employment opportunities through direct and
indirect efforts:
Direct efforts - The government employs people in various departments for
administrative purposes. The government also runs enterprises that increase
the production of goods and services, which leads to more employment.
Indirect efforts - The government creates economic, social, and community
assets. It also links private enterprises with government enterprises, which can
lead to increased output and employment in the private sector.
The two types of unemployment are:
1.Disguised unemployment- It is a type of unemployment where more people
are employed than is necessary, and the additional workers are not productive.
2.Seasonal unemployment - It is a temporary unemployment that occurs
according to the rise and fall in demand for labour in particular sectors of the
economy.

Factors affecting are:

•Weather conditions
•Consumer Preferences
•Industry Patterns
•Demand Fluctuations
•Technological Changes
Employment generation programs can have many benefits, including:
• Poverty alleviation
• Rural-urban migration
• Durable assets
• Self-sufficiency skills

All these programmes aim at providing not only employment but also services
in areas such as primary health, primary education, rural drinking water,
nutrition, assistance for people to buy income and employment generating
assets, development of community assets by generating wage employment,
construction of houses and sanitation, assistance for constructing houses, laying
of rural roads, development of wastelands/ degraded lands etc.
 CONCLUSION
There has been a change in the structure of workforce in India. Newly emerging jobs are found
mostly in the service sector. The expansion of the service sector and the advent of high technology
now frequently permit a highly competitive existence for efficient small scale and often individual
enterprises or specialist workers side by side with the multinationals.
Outsourcing of work is becoming a common practice. It means that a big firm finds it profitable to
close down some of its specialist departments and hand over a large number of small piecemeal jobs
to very small enterprises or specialist individuals, sometimes situated even in other countries.
All of this change has not gone in favour of the individual worker. The nature of employment has
become more informal with only limited availability of social security measures to the workers
In the last two decades, there has been rapid growth in the gross domestic product, but without
simultaneous increase in employment opportunities. This has forced the government to take up
initiatives in generating employment opportunities particularly in the rural areas.
 QUIZ
1. Which of the following is a major form of livelihood for Indians
as it accounts for greater than 50 per cent of the total workforce?
a)Regular salaried employment
b)Casual wage labor
c)Self-employment
d)None of the above
2. Who collects the information relating to the formal sector ?

3. Women workers accounted for ______ of the rural workforce?

A) 1/4
B) 1/5
C) 1/3
D) None of the above
4. In 2012 how many people were employed in the formal sector?

5. Which of the following workers is a regular salaried employee?

a)A vegetable vendor
b)A cashier in a bank
c)Both a and b are incorrect
d)Both a and b are correct
6. Seasonal unemployment affects workers in industries that
a) Constantly in demand
b) Fluctuate with seasons
c) Highly specialized
d) Technology-driven

7. In urban areas people employed in service sector was about ____

a) 80%
b) 60%
c) 20%
d) 40%
8. Which sector in India has the highest disguised unemployment?
a) Manufacturing
b) Services
c) Agriculture
d) Mining

9. why the workers started to migrate from rural to urban areas?

a)The opportunities decreased in agricultural sector
b)The labor started to flow from agriculture to factories and services
c)The employment was more in service sector
10. Which of the following is an example of seasonal unemployment?
a) An IT worker losing a job due to automation
b) A construction worker laid off during winter
c) A factory worker laid off during a recession
d) A teacher on summer break

11. Which of the following is true about worker population ratio ?

A) WPR is same for rural and urban areas
B) WPR is higher for males than females
C) WPR increases with education level
D) All of the above
12. Increase in GDP without employment growth shows _
a. More employment opportunities
b. Jobless growth
c. More dependence on technology

13. In urban regions, approximately __ out of every 100 females are involved
in economic activities, whereas in rural regions, around __ for every 100
females take part in the employment market.
A) 10,14
B) 16,20
C) 14,18
D) 12,16
14. During 1972-2018, many of the people were___
a. Self- employed
b. Regular salaried employees
c. Casual wage laborers

15. "The owner of a textile shop employing nine workers." Does this come
under formal or informal sector?
16. "A private school teacher in a school which has 25 teachers."
Does it come under formal sector or informal sector?

17. The efforts of government in generating employment can be

broadly categorized into two aspects comment.

18. What is MNREGA act 2005?