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Ch. Prashanth Reddy

The real nature of unemployment problem in the country is not that people are not employed in some activity but that large number of those classified as employed are engaged in low-quality employment which does not provide adequate income to keep a family above the poverty line.

HYDERABAD, June 5

IT is often said that unemployment is growing in the country. However, according to a study, unemployment rates are not high in India. The rate is around six per cent.

This is despite the fact that the rural employment growth has declined from two per cent during 1987-88 and 1993-94 to 0.7 per cent between 1993-94 and 1999-2000 and urban employment growth declining from three per cent to one per cent in the same period.

The real nature of unemployment problem in the country is not that people are not employed in some activity but that large number of those classified as employed are engaged in low-quality employment which does not provide adequate income to keep a family above the poverty line, Prof S. Mahendra Dev, Director of the Centre for Economic and Social Studies (CESS), states in his working paper on `Pro-poor growth in India: What do we know about the employment effects of growth 1980-2000?'

The paper states that many people are working at low wages and low working conditions in agriculture and informal sectors. The challenge, therefore, is to shift these workers to higher productivity sectors and also to create new jobs in non-agriculture sector.

According to Prof Dev, rates of unemployment in agriculture, industry and services sectors in the country for all categories of employment and workers, except rural males, has declined between 1977-78 and 1993-94. Ironically, at the same time, the quality of employment also declined in all the three economic sectors, particularly in agriculture and especially for women.

In the early liberalisation period, Prof Dev points out, there has been a significant increase in casual labour as a proportion of total rural employment. The decline in self-employment and regular employment has occurred mainly in agriculture. On the other hand, there has been a modest increase in self-employment and regular employment in the rural non-farm sector (RNFS).

Prof Dev states that allowing the poor to contribute to and benefit from increased growth rates of the economy will pose particular challenges, as employment in India is largely unorganised, rural and non-industrial in nature.

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