Indian agriculture’s share in providing jobs has declined by a third over 25 years.
From 62% of the jobs being limited to farms in 1991, it had fallen to 41.4% in 2018-19, according to an Indian Express report. It looks like this is exactly what India needs. But then, looks could be deceptive.
Ideally, such a transfer of labour from agriculture would be towards manufacturing and modern services like information technology, business process outsourcing, or healthcare.
This is called a structural transformation, according to economists.
Instead, Indian agricultural labourers mostly moved to other low-paying and informal jobs such as petty retailing, small eateries, domestic help, sanitation, security staffing, and transport, according to the report.
“...the labour transfer is happening within the low-productivity informal economy. The jobs that are getting generated outside agriculture are mostly in low-paid services and construction; the latter’s share in employment has even overtaken that of manufacturing,” it said.
The official Periodic Labor Force Survey data shows more than half of the rural workforce as self-employed or as casual wage workers with average earnings lower than the salaried workers.
What’s probably worse under the circumstance is that even this “shift” in the nature of jobs in India may have been reversed recently, even if temporarily.
“This has primarily to do with the Covid-induced economic disruptions...The reverse migration of people back to the farms should be a temporary blip, though, with the surveys from 2021-22 hopefully revealing a restoration of the long-term trend,” the report said.
In July, India’s unemployment rate stood at 6.9%, with urban joblessness at 8.3% and rural at 6.2%, according to the data released by economic think-tank Centre for Monitoring Indian Economy (CMIE). The rate of unemployment among rural Indians was at 8.03% in June.