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Rural Construction Employment Boom during 2000–12

Evidence from NSSO Surveys

Kanika Mahajan (kanika26@gmail.com) teaches at Ashoka University, Sonipat. R Nagaraj (nag@igidr.ac.in) teaches at Indira Gandhi Institute of Development Research, Mumbai.

Amid (near) jobless economic growth during 2000–12, construction employment boomed at over 9% annually. It was part of a 10 percentage point rise in fixed capital formation rate in 13 years, to 35% of gross domestic product. The boom was rural, growing 2.5 times (at over 12%) as fast as in urban areas (at a mere 5%). National Sample Survey Office primary data reveals that a rise in rural private residential construction is the principal factor explaining the boom. This suggests improvements in rural housing status: conversion of kutcha houses into pucca houses. Decline in price-to-income ratio—of cement to rural wages—expanded rural construction demand. The popular perception (or explanation) for the rural construction employment boom in terms of rural–urban migration—of short-term, circular or seasonal—does not hold water.

The authors thank Saloni Khurana and Vikas Vaibhav for their assistance in analysing the National Sample Survey Offi ce data. Judhajit Chakravorty’s permission to use his analysis of the census housing data is gratefully acknowledged. R Nagaraj is grateful to Ravi Srivastava for his comments and suggestions on earlier versions of the paper.

Updated On : 12th Jan, 2018

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