1. Employment in India Growth after Independence Presented by: Gaurav Dakliya (2011CH10082) Nikhil Aggarwal (2011CH10099) Paras Garg (2011CE10377)

2. Key Terms Labour force participation rate Percentage of Working Age Persons Employed Unemployed but looking for a job Work force participation rate Percentage of the total working age population employed Unemployment rate Percentage of total working age population which is unemployed

3. Key Terms (Contd.) Usual status (Principal) Usual principal activity status Labour Force. Employed/Unemployed status Unemployment rate Usual status (Subsidiary) subsidiary status workers. Usual Status (PS+SS)

4. Key Terms (Contd.) Current Daily Status (CDS) Unemployment Activity status of an individual for each day of the reference week Time disposition of an individual on each day of the reference week Assigning Time Intensities and Activity status Intensity 1.0 full day, 0.5 Half day Employed for full day 4 Hours 0.5 Intensity for two economic activities Working for half day Unemployed for full day/Half Day Outside the labor force for the entire day Current Weekly Status (CWS) Unemployment one or more of the gainful activities for at least one-hour on any day of the reference week Seasonality in Labour Market

5. Sector-wise distribution and evolution of economy

6. Contribution of different sectors in GDPyear agriculture and allied activities industry mining and querying manufacturing services(including construction) Social & Personal Services 1950-51 1450.52 310.26 51.38 250.96 968.42 284.74 1951-52 1472.16 325.43 57.72 258.89 1000.24 293.29 1966-67 1879.62 793.13 122.31 625.63 2032.22 539.5 1967-68 2159.14 804.03 125.19 628.04 2122.94 564.38 1985-86 3336.16 1943.5 291.67 1474.96 4778.16 1311.84 1986-87 3322.5 2078.28 327.39 1556 5105.22 1410.43 1991-92 3902.01 2764.9 484.84 1984.19 6975.1 1852.32 1992-93 4161.53 2851.21 489.31 2045.51 7350.75 1963.32 2000-01 5227.55 4846.65 694.72 3631.63 13353.55 3439.63 2008-09 6556.89 8374.07 980.55 6563.02 26655.8 5444.97 2009-10 6625.09 9122.19 1042.25 7197.26 29329.09 6100.96 2010-11 7091.03 9745.27 1094.21 7741.62 32023.24 6376.75 2011-12 7286.67 10000.42 1084.69 7934.68 34738.06 6747.03

7. year 1951-52 1967-68 1986-87 1992-93 2008-09 2010-11 0 5000 10000 15000 20000 25000 30000 35000 year 1950-51 1951-52 1966-67 1967-68 1985-86 1986-87 1991-92 1992-93 2000-01 2008-09 2009-10 2010-11 2011-12

8. Dividing in different phases Based on this trend Independent India can be divided in different phases: Phase 1: Independence to mid-1960s Phase 2: Mid-1960s to 1980 Phase 3: 1980 to early 1990s Phase 4: Early 1990s onwards

9. Phase 1. Independence to mid 1960s First (1951-1956) and Second (1956-1961) Five Year Plan. High growth rate in Agriculture with 59% in GDP share with more than 80% people employed in this sector. High growth rate in Manufacturing & Industry sector.

10. Phase 2. Mid 1960s to 1980s Third (1961-66), fourth (1969-1974) and fifth (1974-79) five year plan. Wars drought and inflation. Growth rate of GDP was 3.5%. Deceleration in growth of industries. Slower pace of structural shift.

11. Phase 3. 1980 to early 1990s Sixth (1980 - 85) and Seventh (1985-90) Five Year Plan. Sharp growth of GDP between 5.5% to 6%. Major shift to service sector. Large decline in the share of agriculture. Manufacturing sector more or less stagnant Percentage Employment Shift Primary Sector 65.6% to 59.1% Secondary Sector 14.4% to 16.2% Tertiary Sector 20% to 24.7%

12. Phase 4. Early 1990s onwards Eighth to Eleventh five year plan. Beginning of privatization and liberalization. Foreign policies and trades played major part. Accelerated structural shift. Contribution to GDP: Primary Sector 20% to 16% Secondary Sector 26% to 25% Tertiary Sector 54% to 59%. Percentage Employment shift Primary Sector 59.84% to 53.2% Secondary Sector 17.42% to 21.50% Tertiary Sector 22.73% to 25.40%

13. Problems faced by Agriculture Sector Slow and uneven growth. Obsolete methods for irrigation and cultivation Flaws in land reforms Finance problems Problems related to storage, marketing, warehousing, communication and transport

14. Problems faced by manufacturing sector Under-utilization of capacity Absence of proper infrastructure Increasing capital-output ratio High cost industrial economy Inadequate employment generation Poor performance of public sector Industrial sickness Global Competition

15. Problems faced in Service Sector Inadequate infrastructure facilities High growth but low share in providing employment Improper maintenance in airports, railways, highways, power plants etc Service sector cannot grow in isolation

16. National Rural Employment Guarantee Act (NREGA)

17. NREGA Salient features: Employment to all those who are willing to work. Free registration with a job guarantee within 15 days of application At least 1/3rd of the employees must be women Fixed minimum wage rate and no upper limit Weekly disbursement of wages and delays not beyond a fortnight.

18. Objectives Unemployment Enhancement of livelihood security of households Arrest rural migration Sustained Development Create rural assets Create livelihood

19. Implementation and Effectiveness of NREGA 144 Crore person-days of employment 34 Mn household benefitted Improved employment per rural household, share of women in workforce, expenditure per district, share of wages in total expenditure Decreased % of STs benefitting from NREGA Improved utilization of funds from 73% to 80%

20. Indian Acts For Employment

21. Factories Act in India In India, the First factories Act was passed in 1881. This act was basically designed to protect children and to provide few measures for health and safety of workers. This law was applicable to only those factories, which employed 100 or more workers. In 1891 another Factories Act was passed which extended to the factories employee 50 or more workers.

22. Factories Act includes: Health Safety Welfare Working hours of Adult Annual Leave with wages

23. Minimum Wages Act, 1948 Objective of this act: To prevent workers from working at starvation wages. To prevent exploitation of labor and make provisions for statutory fixation of minimum rates of wages.

24. Broad features of the Act The act lays down the principles for fixation of: A minimum time rate of wages A minimum piece rate A guaranteed time rate An overtime rate for different occupations, localities or classes of work and for adults, adolescents, children and apprentices.

25. Employee State Insurance Act, 1948 Objective: To secure sickness, maternity and medical benefits to employees of factories and establishments and dependents benefits to the dependents of such employee.

26. Benefits Sickness and extended sickness benefit Maternity benefit Disable benefit Dependents benefit Medical benefit Funeral benefit

27. Public and Private Sector

28. Public Sector and Private Sector distribution Public Sector contributed 7.5% of NDP in 1950-1951. Small scale private industries. Public sector forms 25% of NDP in 2007-2008. Public sector contributes one-third of Exports

29. SECTOR-WISE GROSS CAPITAL FORMATION Year Public Corporate Sector Private Corporate Sector Gross Capital Formation 1 2 3 4 (BASE : 1999-2000) 1950 2.6 6.1 8.7 1955 5.4 6.3 11.7 1960 6.7 5.8 12.5 1965 8.1 6.9 14.9 1970 5.8 7.9 13.8 1975 7.4 8.6 16.1 1980 8.9 9.5 18.4 1985 10.7 9.7 20.4 1990 9.6 13.4 23.0 1995 8.3 16.2 24.4 2000 6.5 16.3 22.7 2005 7.0 24.0 31.0 2007 7.4 25.0 32.5

30. EMPLOYMENT IN PUBLIC AND ORGANISED PRIVATE SECTORS Years Public Sector Private Sector end march end march 1981 154.8 74.0 1991 190.6 76.8 1995 194.7 80.6 2000 193.1 86.5 2002 187.7 84.3 2003 185.8 84.2 2004 181.9 82.5 2005 180.1 84.5 2006 181.9 87.7

31. Reasons for growth of public sector The Industrial Policy Resolution (1956) Schedule A: stated 17 industries, exclusively under right of state Schedule B: list of 12 industries progressively state owned Restrictive to new private industries

32. Benefits Helps in rapid economic growth Promote redistribution of Income Create employment Promote balanced regional development Limitations Economic Inefficiency Ineffectiveness in provision of goods and services Rapid expansion of bureaucracy Pressure on government Benefits and Limitations in Public Sector

33. Benefits and Limitations in Private Sector Benefits Reduce political interference Provide adequate competition Generate cash Reduce the concentration of economic power. Limitations Emphasis on Non-Priority Industries, Emergence of monopoly power and concentration, Industrial Disputes, Industrial Sickness.

34. Gender-based Analysis

35. Women Ratio

36. 231.6 106.35 101.08 22.68 Workers in 2009-10 based on growth rate of Employment rural male rural female urban male urban female

37. Employment Growth Rate: Global Scenario

38. 1.9 1.4 2 2003-08 2009-10 2011 2003-08 2009-10 2011 1.2 -0.5 1.0 1.3 -2.4 2.4 2003-08 2009-10 2011 Developing Economies Transition Economies Developed Economies

39. Effect of Integration with global economies on Employment Employment in India and China

40. Similar Current Issues Most important problems in both economies are currently the same: Agrarian crisis Inadequate generation of employment in terms of decent work Public neglect of social sectors Growing inequalities.

41. Effect of Integration with global economies (Contd.) Pre Integration Period China - State Controlled Labour Supply No Unemployment but Surplus labour Post Integration Period China - Rigid labour laws dismantled India Not much Reforms in Indian labour market Shedding of Surplus Labour

42. Sector-wise distribution of Labour Force of China and India (% of labour force) Agriculture Industry Services China 1980 69 18 13 1990 60 21 19 2000 50 23 27 India 1983 86.6 14.7 16.7 1987-88 64.9 17.1 18.0 1992-93 64.0 19.9 20.1 1990-2000 60.4 17.5 22.1

43. Effect of Integration with global economies (Contd.) Unemployment in India and rate of growth Agricultural labour force Labour intensive manufacturing sector in China Service Sector - Jobless growth in India IT dominated Service Sector - Educated and skilled labour Self Employment decreased as of the Increase in wage employment. Absorbed by Informal sector.

44. Distribution of Employment by Type in China (% of total employment) 1990 1997 2005 Self-employment 51.2 46.1 39.5 Informal wage employment TVEs 11.2 14.3 19.0 PEIB 03.5 09.8 14.2 Formal wage employment State 21.5 19.5 09.3 Non-state 0.2 1.5 5.1

45. Distribution of Employment by Type in India (% of total employment) 1983 1993-94 2004-05 Self-employment 57.3 56.4 56.6 Causal wage employment 28.9 31.8 28.4 Regular wage employment 13.8 13.6 15.2 Formal sector employment 7.9 7.3 5.8

46. Effect of Integration with global economies (Contd.) Employment in formal sector Low skilled labour force Increased labour productivity Brain Drain High Skilled Migrants

47. Effect of Integration with global economies (Contd.) Threat to advanced countries Globalized labour force doubled 10% of United States labour force may get affected by manufacturing and service successes in China and India respectively - Freeman Global benefits growth of these economies Employment needs and provide basic necessities to growing economy Demand for raw materials and commodities for other countries

48. Conclusion Shift from primary to tertiary sector with stagnant manufacturing sector. Focus on subsectors with great scope of growth. Work upon equal participation of both male and female. Government policies to uplift agriculture sector. IT Sector emerged as new growth sector. Government focus on manufacturing sector. Lesson learnt on comparison with China.

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