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The rapid decline in poverty in India between 2005 and 2012, the most recent period for which data are available, was driven mainly by higher labour earnings. This is not surprising given that the capacity to work tends to be the main — and often the only — asset of poor households. Over this period, wages for unskilled workers increased sharply. There was also a marked shift towards non-farm jobs, which on average pay more than jobs in agriculture. These two trends gave a substantial boost to labour earnings and propelled millions of Indian households above the poverty line. While this was indeed a spectacular achievement, there are reasons to worry about its long-term sustainability. A large majority of those who escaped poverty did not gain entry into the middle class. Instead, they moved slightly above the poverty line and remain vulnerable to slipping back. The deficit in the number of jobs created after 2005, as well as in their quality, explains these high levels of vulnerability. This period can, therefore, be described as one of a growing jobs deficit. Or rather, three of them: i) a deficit in the overall number of jobs, ii) a deficit in the number of good jobs and, iii) a deficit in the number of suitable jobs for women.
In absolute numbers, of these 13 million potential entrants into the workforce every year during this period, only 3 million got a job. In a young and increasingly aspirational society, this growing jobs deficit has the potential to turn the much-awaited demographic dividend into a demographic curse.
CASUALISATION OF LABOUR On closer examination, it is not as if job creation came to a standstill after 2005. On the contrary, there was considerable dynamism in the informal segments of the economy, especially in rural areas. As could be expected in a phase of structural transformation, there was a substantial decline in employment in agriculture, with nearly 34 million farm jobs lost between 2005 and 2012. Meanwhile, there was a boom in construction jobs, which accounted for nearly half of the expansion in non-farm employment. However, construction jobs tend to be casual. Their wages are set on a daily basis, or through short-term contracts, and they provide no form of social protection. While jobs like these help people escape poverty, they do not take them much farther than that. Instead, transitions into the middle class are associated with regular, salaried jobs. The likelihood of a household durably escaping poverty between 2005 and 2012 was higher if a larger share of its members had regular jobs. On the other hand, households that slipped into poverty between these two years saw a growing share of their family members employed as casual workers. In principle, urbanisation brings with it the promise of better jobs. In India too, it is true that large urban areas have a substantially higher share of regular jobs. By contrast, small towns have far fewer regular jobs to offer, and in rural areas these jobs are rare. Therefore, unless small towns and large villages, where most of India’s poor and vulnerable live, can ensure the vibrant creation of regular jobs, building a sizeable middle class could remain an elusive goal for the country.
FEMALE LABOUR FORCE PARTICIPATION Historically, India’s female labour force participation rates in urban areas have been low — hovering around 20%. But one of the most striking developments after 2005 has been the large withdrawal of women from the rural labour force. As rural areas become increasingly urban, they are beginning to look increasingly urban in the magnitude of their jobs deficit too. By contrast, in small villages, over 70% of women are employed on the farm, as agricultural activities continue to be important in these areas. Elsewhere, however, manufacturing tends to be the largest employer of women outside of farming. In towns and cities, on the other hand, women more often hold professional jobs in health, education and public administration. In these areas, construction work, while significant, does not employ too many women. The structure of female employment by sector is revealing of the kinds of jobs that are seen as more suitable for women. For instance, women are more likely to work when jobs are located close to their homes and allow multi-tasking, as in the case of farming. They are also more likely to work when jobs offer regular wages, as in the case of manufacturing. Or when jobs have social protection benefits attached to them, as in case of the health, education and public administration, where the public sector is the dominant player. Unfortunately, such jobs are few and far between.
FUTURE PERSPECTIVE
The Indian economy has progressed at a higher growth rate and the statistics reveal a bright picture with respect to future progress of the country. However, there is an incresing concern that this growth must not be "Jobless, ruthless, voiceless, rootless and futureless", as observed in the other capitalism lured ecconomies of the developed world. India has to set high standards with respect to inclusiveness of its growth process as a country and democracy of , for and by the YOUNG.
By: Abhishek Sharma ProfileResourcesReport error
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