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Employment and Poverty in India, 2000-2005

This paper is principally focused on the changes in the size and structure of the workforce and the changes in labour productivity, wages and poverty in India in the first quinquennium of the 21st century. The period between 2000 and 2005 saw a sharp acceleration in workforce growth, and, on the obverse side, a slowdown in the rate of growth of labour productivity across most sectors and in the economy as a whole, and, a slowdown (a decline) in real wage growth in rural (urban) India. Consistent with the trends in labour productivity and real wages, relative to the 1994-2000 period, the pace of poverty reduction between 2000 and 2005 shows, at best, a marginal acceleration (or a marginal deceleration, depending on the choice of poverty lines) in rural India and a clear slowdown in urban India. This period also saw a small rise in the number of working poor and a substantial rise in the number of self-employed and regular wage/salary workers in the "above poverty line" households.

Employment and Poverty in India, 2000-2005

This paper is principally focused on the changes in the size and structure of the workforce and the changes in labour productivity, wages and poverty in India in the first quinquennium of the 21st century. The period between 2000 and 2005 saw a sharp acceleration in workforce growth, and, on the obverse side, a slowdown in the rate of growth of labour productivity across most sectors and in the economy as a whole, and, a slowdown (a decline) in real wage growth in rural (urban) India. Consistent with the trends in labour productivity and real wages, relative to the 1994-2000 period, the pace of poverty reduction between 2000 and 2005 shows, at best, a marginal acceleration (or a marginal deceleration, depending on the choice of poverty lines) in rural India and a clear slowdown in urban India. This period also saw a small rise in the number of working poor and a substantial rise in the number of self-employed and regular wage/salary workers in the “above poverty line” households.

K SUNDARAM

T
his paper is principally focused on the changes in the size and structure of the usual (principal plus subsidiary) status workforce in India in the first quinquennium of the 21st century. It also examines the changes in labour productivity, wages and poverty over this period. The estimates of poverty are derived by combining comparable estimates (on mixed reference period) for 2004-05 of the proportion of households in “below poverty-line” households from the 61st round Consumer Expenditure Survey of the National Sample Survey and the sizedistribution of persons from the 61st round Employment-Unemployment Survey. These estimates suggest that the extent of decline in poverty between 2000 and 2005 is significantly smaller than indicated by Himanshu (2007) and Mahendra Dev and Ravi (2007). Our estimates of poverty also enable us to address the issues of the working poor and of the quality of employment growth over this period.

The paper is organised as follows.

The first section presents and discusses the estimates of population and workforce over the period 1983-2005 as a backdrop to the more detailed analysis of the changes in the size and structure of workforce between 2000 and 2005. Following our earlier paper [Sundaram 2007], the discussion highlights the issue of age-distribution underlying the overall (all ages) workerpopulation ratios (WPRs) coming from the NSS employmentunemployment surveys, and, using the smoothed age-distribution of population from the population Censuses of 1981, 1999 and 2001, brings out the critical differences between the survey-based and the census age-distributions. It is shown that, with the census-based age-shares as weights to derive the overall WPRs from the survey-based age-specific WPRs, the slowdown in the growth of workforce between 1993-94 and 1999-2000 relative to that between 1983 and 1993-94 is much less marked than in other analyses. A similar comparison of the age-distribution of the population as per the 61st round Employment Survey and that from population projections carried out by Mari Bhat, shows the two age distributions to be fairly close. Consequently, we use the survey-based WPRs (all-ages) – separately for rural males, rural females, urban males and urban females – to derive the workforce estimates by gender and rural-urban location for 2004-05. These estimates indicate a significant acceleration in the growth of workforce – especially the female workforce – between 2000 and 2005 relative to both the 1980s and the 1990s.

The second section analyses the changes in the structure of workforce. We begin by examining the changes in the activitystatus of the workforce. This brings out the sharp growth in selfemployment and the reduction in the share of casual labour, with the proportion of regular wage/salary workers not showing much of a variation except for urban females who show a rise in the share of such workers. Even with more or less unchanged shares of RWS workers, the sharp growth in total workforce ensures a significant increase in the average annual increments in such workers relative to both the 1980s and the 1990s to dispel any notion of “jobless growth”. This section examines next the changes in the broad industrial and occupational distribution of the workforce in the first quinquennium of the 21st century.

Building on the analysis of the industrial distribution of the workforce, the next section examines the growth in labour productivity by broad industrial sectors and the changes in real wages of adult casual labourers by gender and rural-urban location.

Against the backdrop of the slowdown in growth of labour productivity and in the growth of real wages of casual labourers in rural areas (and a decline in real wages in urban India) Section IV presents the estimates of poverty among the general population. Our estimates indicate only a marginal acceleration (or a marginal slowdown, depending on the choice of the poverty line) in rural India and a clear slowdown in urban India in the pace of poverty reduction between 2000 and 2005 relative to that in the 1994-2000 period.

The final section presents our estimates of the working poor and examines the quality of employment – especially of the self-employed – in terms of average annual increments of such workers located in “above poverty line” households.

I Population, WPRs and Workforce Growth

Estimates of population, separately for rural males, rural females, urban males and urban females, for (the mid-point) of the survey years, provide the starting point for estimating the size of the workforce by gender and rural-urban location.

Table 1 provides the estimates of all-India population for the four survey years: (January-December) 1983; and (July-June) 1993-94, 1999-2000 and 2004-05. For the first three time points, the segment-wise population totals are based on inter-censal interpolations based on the 1981, 1991 and the 2001 Population Censuses. The estimates for 2004-05 are based on population projections for India and states, 2001-2026 prepared by the Technical Group on Population Projections constituted by the National Commission on Population, May 2006 [ORG and CCI 2006].

As can be readily seen, in all the four population segments, there has been a significant slowdown in the rate of growth of population in the first quinquennium of the 21st century: from a little under 2 per cent per annum between 1994 and 2000 to a little under 1.7 per cent per annum. Nevertheless, India’s population has grown by close to 88 million between 2000 and 2005.

In a recent paper [Sundaram 2007] we had drawn attention to the fact that the segment-specific overall worker population ratios (WPRs for short) are nothing but weighted averages of age-specific WPRs with the (survey-based) share of each agegroup in the (segment-specific) population total, as per the survey, providing the weights. It was shown that using the survey-based age-distribution results in a sharp slowdown in the growth of prime age (15-59) population – from 2.74 per cent per annum (pcpa) between 1983 and 1994 to 1.93 pcpa between 1994 and 2000. In the context of the observed slowdown in the rate of growth of total population (reflecting fertility decline) over the same period, equally problematic is the acceleration – albeit small

– in the rate of growth of population in the 0-9 age-group raising doubts about the order of decline in the share of 0-9 age-group between 1983 and 1993-94 (as per the two surveys).

Taking care of the concerns about age misreporting in the population census by using “smoothed” age-distributions for the censuses, Table 2 presents the survey-based age-distribution and the (closest) census-based age-distrubutions for 1981, 1991 and 2001. This brings out the nature of the differences in the two age-distributions, especially for 1983 (relative to the 1981 Census) where the survey-based share of 0-9 is higher for rural males and urban males and for 1993-94 relative to the 1991 Census

Table 2: Survey and Census-based Age-Distribution ofAll-India Population by Gender and Rural-Urban Location:1981 – 2004-05

Per 1000 Distribution of Population by Rural Age-Groups

Survey-based Census-based (Smoothed) Age-1983 1993-1999-2004-1981 1991 2001 2005 Group 94 2000 05

Panel A: Rural Males 0 – 9 284 261 255 238 278 268 255 237 10 – 14 136 120 128 127 127 121 122 118 15 – 29 244 258 250 253 250 259 261 272 30 – 59 270 294 296 311 280 289 295 302 60+ 66687171 65 63 6771 All Ages 1000 1000 1000 1000 1000 1000 1000 1000

Panel B: Rural Females 0 – 9 275 254 248 230 280 269 252 231 10 – 14 121 107 117 113 122 115 116 115 15 – 29 255 266 258 258 256 265 261 264 30 – 59 280 304 304 324 284 289 298 311 60 + 68 69 73 75 58 63 73 79 All Ages 1000 1000 1000 1000 1000 1000 1000 1000

Panel C: Urban Males 0 – 9 241 218 202 183 236 225 196 177 10 – 14 125 115 116 104 118 113 110 100 15 – 29 294 292 291 300 298 292 296 303 30 – 59 287 321 331 349 300 317 336 353 60 + 52 55 59 64 48 53 62 67 All Ages 1000 1000 1000 1000 1000 1000 1000 1000

Panel D: Urban Females 0 – 9 249 216 201 179 256 236 199 177 10 – 14 122 114 114 108 122 115 109 98 15 – 29 291 291 287 283 295 297 293 303 30 – 59 275 314 327 354 275 295 328 347 60 + 63 65 71 76 52 57 71 75 All Ages 1000 1000 1000 1000 1000 1000 1000 1000

Notes: Starting with the more detailed (by 5 year age-group) age-distributions, the census age-distribution for 1981, 1991 and 2001 has been smoothed using the smoothing procedure spelt out in the Report of Technical Group on Population Projections (pp 3-4). For 2005, the age-distribution has been computed by the author by interpolation of age-sex-locationspecific populations for January 1, 2005 from population projections by age-sex and location for April 1, 2002 and April 1, 2007 kindly made available by Mari Bhat.

Table 1: All-India Population by Gender and Rural-Urban Location 1983 – 2004-05

(All-India Population)

(’000s)

Population Segment 1983 1993-94 1999-2000 2004-05 Rates of Growth (Per Cent Per Annum)
(1.7.83) (1.1.1994) (1.1.2000) (1.1.2005) 1983-1994 1994-2000 2000-2005
Rural males 281,288 339,642 374,432 400,865 1.81 1.64 1.37
Rural females 266,637 319,411 353,785 379,102 1.73 1.72 1.39
Rural persons 547,925 659,053 728,217 779,967 1.77 1.68 1.38
Urban males 91,217 124,031 145,878 164,732 2.97 2.74 2.46
Urban females 80,445 111,104 131,244 148,332 3.12 2.82 2.48
Urban persons 171,662 235,135 277,122 313,064 3.04 2.78 2.47
Total (R+U) males 372,505 463,673 520,310 565,597 2.11 1.94 1.68
Total (R+U) females 347,082 430,515 485,029 527,434 2.07 2.01 1.69
Total (R+U) persons 719,587 894,188 1005,339 1093,031 2.09 1.97 1.69

Notes: Segment-wise population totals for 1983, 1993-94 and 1999-2000 are based on inter-censal interpolations of total population, share of urban area in total population and the share of females in rural and urban area based on the 1981, 1991 and 2001 Censuses. The estimates for 2004-05 are based on an interpolation of the total and urban population as on October 1, 2004 and March 1, 2005 as per Population Projections for India and States, 2001-2026 [ORG&CCI, 2006]. The segment-wise sex-composition as per the 2001 Population Census is used to derive the estimates for 2004-05.

where the survey-based age-shares in this and the next age-group are substantially lower for females.

The previously stated concerns about the consequences of adopting the survey-based age-distribution (acceleration in the rate of growth of population in the 0-9 age-group and a slowdown in the rate of growth of prime age-population) lead us to choose the census age-distribution to weight the agegroup-specific WPRs from the NSS Employment-Unemployment Surveys, taken as they are, to derive, for each of the four population segments the overall (all-ages) WPRs for 1983, 1993-94 and 1999-2000.

Table 2 also presents for 2004-05 a comparison of the surveybased age-distribution with our estimates based on interpolations of projected populations for April 1, 2002 and 2007.1

For the rural and urban females, the age-distributions are fairly well-matched. For rural males the age-share in the 0-9 and 60+ age-groups are well matched but the projections-based agedistribution shows a higher share for the 15-29 age-group with lower shares for both the 10-14 and the 30-59 age-groups.

For urban males, the projections-based distribution show smaller shares for the 0-9 and 10-14 age-groups and fractionally higher shares for the 15-29 and the 30-59 age-groups. As we shall see presently, the projection-based age-distributions yield a somewhat higher overall WPRs for males in both rural and the urban areas of the country and slightly lower WPR for rural females. Given that our estimates of age-distribution for 2004-05 are based on projections rather than a census count for 2004-05, we accept the survey-based age-distributions for 2004-05.2

In Table 3, we present the age-specific WPRs on the usual (principal plus subsidiary) status for the four population segments for 1983, 1993-94, 1999-2000 and 2004-05 to see the changes between 2000 and 2005, which is what we will focus on, against the backdrop of trends since 1983.

For rural males, the changes in age-specific WPRs are either small or broadly in line with the trends since 1983 – except for the (16 points per 1000) rise in WPR in the 25-29 age-group.3

For urban males, the sizeable increase in WPRs in the 15-19, 20-24, 25-29 age-groups do appear to be out of line with the trends since 1983.

The increases in WPRs for males – the four cases identified above – pale into insignificance compared to the big jumps in the age-specific WPRs for females. For rural females we have a 22-point (per 1000) rise in the 25-29 age-group, a 42-point rise in the 30-44 age-group and a whopping 51-point rise in the 45-59 age-group.

In the 25-29 age-group, the 22-point rise in WPR on UPSS is made up of a 6-point decline on the principal status and a 28-point rise on the subsidiary status. The increase in the UPSS WPR for rural females in the 30-44 age-group is made up of a 15-point rise on the principal status and a 27-point rise on the subsidiary status while in the 45-59 age-group, the rise in the UPSS WPR overwhelmingly reflects a rise in WPR on the principal status. In all the three age-groups, the WPRs on the subsidiary status are still below the levels in 1993-94. And, there is no a priori basis for not accepting the increases in WPRs on the principal status.

For urban females the increases in WPRs are significant in the 15-19 and the 20-24 age-groups and are out of sync with the trends since 1983. In the 30-44 age-group, three-fourths of the rise in the UPSS WPR reflects a rise in WPR on the principal status and the underlying WPR on the subsidiary status, while being higher than the 1999-2000 level, are still lower than the level for 1993-94.

In row 9 of Table 3, we present the overall (all-ages) WPRs with the survey-based age-shares providing the weights to derive the weighted-average of age-specific WPRs, while row 10 reports the overall WPRs when the census-based (projections-based for 2004-05) age-shares are used to weight the age-specific WPRs from the respective surveys.

In deriving our estimates of usual (principal plus subsidiary) status workforce, for reasons already discussed, for 1983, 1993-94 and 1999-2000 we combine the segment-specific population totals (Table 1) with the overall WPRs given in row 10, However, we prefer to use the survey-based overall WPRs (row 9) in the four population segments together with the projected population totals for the four population segments, to derive our workforce estimates for 2004-054 (Table 4).

The growth rates presented in Table 4 point to the following conclusions:

First, the extent of slowdown in rate of growth of total workforce between 1993-94 and 1999-2000 (relative to the 1983-94 period), from 1.71 to 1.45 pcpa, is much less marked than the decline from 2.04 to 0.98 pcpa indicated in the Report of the Task Force on Employment Opportunities [GoI 2001].

Second, this slowdown in the rate of growth of workforce in the 1990s was primarily a rural phenomenon, though females in both rural and urban areas experienced a sharp slowdown in growth.

Focusing on the 1999-2000 to 2004-05 period, we find:

(1) Relative to the growth between 1994 and 2000, we have a sharp acceleration in workforce growth in all the four population

Table 3: All-India Age-specific Usual (Principal Plus Subsidiary) Status Worker-Population Ratios by Gender and Rural-Urban Locations: 1983 – 2004-05

Per 1000 Worker-Population Ratios

Rural Males Rural Females Sr Age-Group 1983 1993-1999-2004-1983 1993-1999-2004-No 94 2000 05 94 2000 05

Panel A: Rural Areas 10 – 9 13 6 4213 742 2 10 – 14 253 138 91 68 240 141 96 74 3 15 – 19 666 578 503 497 452 364 304 319 4 20 – 24 897 859 844 849 488 456 410 410 5 25 – 29 968 958 950 966 557 525 491 513 6 30 – 44 985 986 982 984 614 598 572 614 7 45 – 59 955 968 958 962 552 543 518 569 8 60 + 670 695 625 644 233 242 218 253 9 All Ages (1) 547 553 531 546 340 328 299 327 10 All Ages (2) 558 545 535 555 341 319 297 322

Urban Males Urban Females Sr Age-Group 1983 1993-1999-2004-1983 1993-1999-2004-No 94 2000 05 94 2000 05

Panel B: Urban Areas 10 – 9 4 3 213312 2 10 – 14 113 66 49 48 70 45 36 33 3 15 – 19 414 356 314 335 155 123 105 128 4 20 – 24 727 674 658 684 182 180 155 201 5 25 – 29 921 904 883 909 229 224 194 229 6 30 – 44 975 975 969 975 291 295 266 310 7 45 – 59 926 935 921 923 276 283 250 252 8 60 + 505 442 402 366 140 113 94 100 9 All Ages (1) 512 521 518 549 151 155 139 166 10 All Ages (2) 525 517 528 558 150 149 140 167

Notes: Estimates of overall (all ages) WPRs in row 9 represents the weighted average of age-specific WPRs with survey-based age-shares as weights while those in row 10 have the census-based age-shares as weights.

segments, with a near doubling of the rate of growth of total workforce, while the rate of growth of female workforce rises fivefold.

  • (2) In terms of levels, we have an increase of a little over 57 million in the total workforce of which about 20 million took place in urban India.
  • (3) In terms of gender-composition, the share of females in the total workforce has increased from 30.8 per cent in 1999-2000 to 32.5 per cent in 2004-05. Even at this level, the share of women in the total workforce is less than their share in 1983 (33.5 per cent) and, only marginally higher than their share in 1993-94
  • (32.2 per cent).

    (4) To conclude this section, it is useful to note that if we had used the age-shares from the 2001 Census to weight the 200405 age-specific WPRs, the total, all-India workforce would have been 444.4 million or about 13.5 million lower than our present estimates. The difference (13.5 million) measures the impact of the changes in age-distribution since 2001 and is a rough indicator of the so-called “demographic dividend”.

    II Structure of Workforce: Activity-Status, Occupational and Industrial Distribution

    We begin this discussion of the changes in the structure of workforce by focusing on the activity-status distribution of the workforce separately for rural and urban India and for males and females (Table 5).

    In rural India, we have a significant reversal of the past trends in the activity-status distribution of the workforce. The share of the self-employed, which had declined from 610 (per 1000) in 1983 to 580 in 1993-94 and further to 554 (per 1000) in 19992000, rose sharply to 601 in 2004-05. The rise in the share of casual labourers from 314 in 1983 to 355 per 1000 in 1993-94 and further to 377 in 1999-2000 gives way, in parallel, to an equally sharp fall to 328 per 1000 in 2004-05. As for the regular wage salary workers (RWS workers for short), after a decline in its share between 1983 and 1993-94 (from 76 per 1000 to 65 per 1000), the share of RWS workers registers a small rise

    – both between 1993 and 1999-2000 (to 69 per 1000) and between 1999-2000 and 2004-05 (to 71 per 1000).

    In urban India, after moving narrowly (between 417 and 423 per 1000) over the period 1983 to 1999-2000, the share of the self-employed records a sharp rise (from 420 to 454 per 1000) with an offsetting decline in the share of the casual labourers. The share of the RWS workers, which had fallen between 1983 and 1993-94 (from 403 to 394 per 1000), after rising by 5 points (per 1000) by 1999-2000, slips down fractionally (to 396 per 1000) to be just above its share in 1993-94.

    By gender, the rise in the share of the self-employed (and the offsetting fall in the share of the casual labourers) between 2000 and 2005 is sharper for females than for males. Over the same period, the share of RWS workers in female workforce also records a significant rise (from 77 to 90 per 1000) while, for male workers, the rise in the share of RWS workers, while present, is more subdued.

    Let us focus briefly on the growth of regular wage-salary workers, which, we have argued elsewhere [Sundaram 2007] is a good indicator (better than the Directorate General of Employment and Training estimates) for tracking the growth of “jobs” in the country (Table 6).

    In the country as a whole, the number of regular wage/salary workers has increased by a little over 10.7 million in the five years separating the 55th and 61st round employment-unemployment surveys, i e, at over 2.14 million per annum. In contrast, the annual average increment to the number of RWS workers between July 1, 1983 and January 1, 1994 (the 1980s) was about a third at 0.41 million. Between 1993-94 and 1999-2000 (the 1990s) the average annual increment to the number of RWS workers, at 1.46 million was more than twice that realised during the 1980s. So that the widely-held perception of the 1990s being a period of “jobless growth” based on a simple comparison of the DGE&T numbers on organised sector employment is at

    Table 4: All-India, Usual (Principal and Subsidiary) StatusWorkforce by Gender and Rural-Urban Locations 1983 – 2004-05

    Usual (pspss) Status Workforce (000s)

    Number of Workers Annual Rate of Growth Population (000) (Per Cent Per Annum) Segment 1983 1993-1999-2004-1983-1994-2000

    94 2000 05 1994 2000 05

    Rural males 156,959 185,105 200,321 218,872 1.58 1.33 1.79 Rural

    females 90,923 101,892 105,074 123,966 1.09 0.51 3.36 Rural

    persons 247,882 286,997 305,395 342,838 1.41 1.04 2.34 Urban males 47,889 64,124 77,024 90,438 2.82 3.10 3.26 Urban

    females 12,067 16,555 18,374 24,623 3.06 1.75 6.03 Urban

    persons 59,956 80,679 95,398 115,061 2.87 2.83 3.82 Total (R+U)

    males 204,848 249,229 277,345 309,310 1.89 1.80 2.21 Total (R+U)

    females 102,990 118,447 123,448 148,589 1.34 0.69 3.78 Total (R+U)

    persons 307,838 367,676 400,793 457,899 1.71 1.45 2.70

    Notes: Segment-wise estimates of workforce for 1983, 1993-94 and 19992000 have been derived by combining the population estimates in Table 1 with the overall (all ages) worker-population ratios reported in row 10 of Table 3. Estimates for 2004-05 have, however, been derived using the overall (all-ages) worker-population ratios reported in row 9 of Table 3 based on the population age-distribution as per the Survey as they are broadly in line with the projected age-distribution.

    Table 5: Per 1000 Distribution of Workforce by Gender, Activity-Status and Rural-Urban Location: All-India, 1999-2000 – 2004-05

    Per 1000 Distribution

    Population 1999-2000 2004-05 Segment SE RWS CL All SE RWS CL All

    Rural persons 554 69 377 1000 601 71 328 1000 Urban persons 420 399 181 1000 454 396 150 1000 Males 510 179 311 1000 542 183 275 1000 Females 549 77 374 1000 610 90 300 1000 Total persons 522 147 331 1000 565 152 283 1000

    Table 6: Number of Usual Status Workers by Activity-Status, Gender and Rural-Urban Location: All-India, 1994-2000

    Population SE RWS CL All SE RWS CL All Segment

    Rural

    person 169,194 20,010 115,191 305,395 206,183 24,260 112,395 342,838 Urban

    Person 40,105 38,056 17,237 953,982 52,244 45,059 17,308 115,061 Males 141,468 49,518 86,279 277,345 167,750 56,405 85,155 309,310 Females 67,831 9,468 46,149 12,344 90,677 13,364 44,548 148,589 Person 209,299 59,066 132,428 400,793 258,427 69,769 129,703 457,899

    Source: Derived from Tables 4 and 5.

    complete variance with the fact of much faster and rising growth of jobs in terms of the number of RWS workers in the country since 1993-94.

    In terms of absolute numbers, the largest increase over this period has been that of the self-employed: by over 49 million with 75 per cent of this increase taking place in rural India. The number of casual labourers, on the other hand, declined by a little over 2.7 million.

    We turn now to a discussion of the changes in the industrial distribution of the workforce (Table 7). At the outset, it needs to be emphasised that the classification adopted in the 55th and the 61st round surveys is based on NIC 1998. So that while the composition of broad industry groups are by and large comparable with the results for 1993-94, there are some differences. Notably, repair services is now a part of the Trade, Hotels and Restaurants and not of Social, Community and Personal Services as earlier. So that, for rural and urban areas taken together, the share of the Trade, Hotels and Restaurants for 1993-94 would need to be raised by about 9 points per 1000 to be comparable with the shares presented here for 1999-2000 and 2004-05 [Sundaram 2001].

    As one would expect, we have a continuation of the long-term trend of a decline in the share of “Agriculture and Allied Activities” and, at the present pace of decline, another decade might see the share of agriculture in employment going below the 50 per cent mark. Despite this sizeable decline in its share, the absolute number of workers in this sector has increased by nearly 18 million, i e, over 30 per cent of the incremental workforce (Table 10).

    In all the four population segments the first quinquennium of this century has witnessed a rise in the share of manufacturing in workforce and this increase has been particularly large (over 4 percentage points) for urban females. Combined with a 2.7 per cent per annum growth in the total workforce, this rise in share of manufacturing in all segments has resulted in a spectacular 4.8 per cent per annum growth in total manufacturing sector employment. This sector accounted for a little over 20 per cent of the incremental workforce during this period.

    The secondary sector, covering Manufacturing, Electricity, Gas and Water Supply and Construction, raises its share from

    15.8 per cent in 1999-2000 to 18.2 per cent in 2004-05. This sector added a little over 20 million to its workforce and accounted for 35 per cent of the incremental workforce over this period.

    In the tertiary or the services sector, we have a reduction, albeit small, in the share of the Social, Community and Personal services. The other services sectors – Trade, Hotels and Restaurants, Transport, Storage and Communication and Finance, Insurance, Real Estate and Business Services – each added between 4 and 6 points (per 1000) to its share. Overall, the share of services went up only slightly from 23.7 to 24.8 per cent.

    Focusing on female workforce, we have a more moderate decline in the share of agriculture and allied activities (by 28 points per 1000 as against the 45 points decline for males). Almost all of this decline in the share of agriculture is offset by the rise of the share of manufacturing (17 points) and social, community and personal services (8 points).

    To complete our discussion of the changes in the structure of workforce, the estimates of the occupational distribution of the work force are presented at the one-digit occupation, division level (Table 8) as well as for identified two-digit occupation groups in Table 9.

    Consistent with the declining share of agriculture, the share of Division 6 (Farmers, Fishermen, Hunters, Loggers and related workers) records a 32 point decline between 2000 and 2005.

    Table 7: Industrial Distribution of Usual (Principal plus Subsidiary) Status Workforce by Gender and Rural-Urban Location: All-India, 1999-2000 – 2004-05

    Per 1000 Distribution of Workforce

    1999-2000 2004-05 Industry-Group Rural Rural Rural Rural Rural Rural Male Female Person Male Female Person

    Panel A: Rural Areas Agriculture and allied activity 714 853 762 665 832 725 Mining and

    quarrying 4 34 635 Manufacturing 73 76 74 79 84 81 Electricity, gas

    and water 2 01 201 Construction 45 11 33 68 15 49 Trade, hotels and

    restaurants 68 20 52 83 25 62 Transport, storage

    and communication 32 1 21 38 2 25 Finance, insurance,

    real estate and

    business services 5 0 3 7 1 5 Social, community

    and personal services 57 36 50 52 38 47 All 1000 1000 1000 1000 1000 1000

    1999-2000 2004-05 Industry-Group Urban Urban Urban Urban Urban Urban Male Female Person Male Female Person

    Panel B: Urban Areas Agriculture and

    allied activity 65 176 86 61 181 87 Mining and quarrying 9 4 8 9 2 8 Manufacturing 224 240 227 235 282 245 Electricity, gas

    and water 8 27 827 Construction 87 48 80 92 38 80 Trade, hotels and

    restaurants 294 169 270 280 122 246 Transport, storage

    and communication 104 18 87 107 14 87 Finance, insurance,

    real estate and

    business services 45 25 41 59 32 53 Social, community

    and personal services 165 317 194 149 327 187 All 1000 1000 1000 1000 1000 1000

    1999-2000 2004-05 Industry-Group Male Female Person Male Female Person

    Panel C: All Areas Agriculture and

    allied activity 534 752 601 489 724 564 Mining and quarrying 5 3 4 7 3 6 Manufacturing 115 100 110 124 117 122 Electricity, gas

    and water 4 03 403 Construction 57 17 45 75 18 57 Trade, hotels and

    restaurants 116 42 93 127 41 99 Transport, storage

    and communication 52 4 37 58 4 41 Finance, insurance,

    real estate and

    business services 16 4 12 22 6 17 Social, community

    and personal services 102 78 95 94 86 91 All 1000 1000 1000 1000 1000 1000

    However, reflecting the rise in the share of the self-employed and the decline in the share of casual labourers, at the two-digit level, we have a small rise in share of “Cultivators” and a sharp, 49 points per 1000, decline in the share of agricultural labourers. The fact that decline in the share of Occupational Division 6 (32 points) is smaller than the decline in occupational groups 61 (cultivators) and 63 (agricultural labourers) taken together, (43 points) implies that there has been a measure of occupational diversification within Division 6.

    At the upper end of the skill-spectrum, the share of both Divisions 0-1, and 2 (Professional, Technical and related workers and Administration and Managerial Workers) shows a rise – smaller for Division 1 relative to Division 2 – in all the segments distinguished. Within the broader Division 0-1, for females, there has been a marginal reduction in the share of healthcare sector and a slight rise in the share of Teachers.

    Continuing the trend noted over a longer period, since 1961 [Sundaram 2001], the share of clerical workers in the urban workforce declines further (from 79 per 1000 to 68 per 1000) in the first five years of the 21st century. However, reversing earlier trends, the share of sales workers shows a rise in all the segments, despite a fall in the share of “Merchants and Shopkeepers” in urban India (Table 9).

    Except for a marginal decline in their share in the rural workforce, service workers (Division 5) record a marginal rise overall, reflecting a rise in the share of service workers, primarily as domestic workers (with the share of personal services showing a small decline), in the female workforce.

    In the broad occupation category of Production Process and related workers, Transport Equipment Operators and Labourers not Elsewhere Classified (Divisions 7, 8 and 9, taken together), we have a rise in the share of Tailors, Dressmakers, etc, in all the population segments. Also, reflecting the rise in the share of construction activities, occupational group 95 (Brick Layers and Other Construction Workers) records a rise in its share in almost all segments – except for females. The decline in the share of this occupation group in female workforce is in line with the decline in the share of construction for urban females by 10 points (per 1000). As for the share of transport equipment operators, where the presence of female workers is negligible, we have a rise in the rural, urban and the total workforce.

    Overall, despite the above-noted changes, our conclusion about the occupational structure of the Indian workforce as of 2000 [Sundaram 2001] still holds true: India remains a land of farmers, fishermen, hunters and loggers, with marginal gains in the share of production process workers and of professional

    Table 8: Occupational Distribution of Usual (Principal plus Subsidiary) Status Workforce by Gender and Rural-Urban Location: All-India, 1999-2000 to 2004-05

    Per 1000 Distribution of Workforce

    Occupation 1999-2000 2004-05
    Division
    Codes Description Rural Urban Male Female Person Rural Urban Male Female Person
    0 – 1 Professional, technical and
    related workers 20 89 38 33 36 22 92 40 38 40
    2. Administrative, executive and
    managerial workers 14 84 37 15 30 16 92 43 17 35
    3 Clerical and related workers 13 88 40 12 31 12 76 35 12 28
    4 Sales workers 39 166 87 28 69 48 176 103 33 80
    5 Service workers 24 96 39 44 41 23 100 39 48 42
    6 Farmers, fishermen, hunters,
    loggers and related workers 754 92 529 748 596 723 87 489 724 564
    7,8,9 Production process and related
    workers, transport equipment
    operators and labourers nec 137 386 230 120 196 156 376 251 128 211
    1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
    Table 9: Per 1000 Share of Some Key Identified 2-digit Occupation Codes of UPSS Workforce: All-India 1999-2000 to 2004-05

    Per 1000 Share in Workforce

    Occupational 1999-2000 2004-05
    Group
    Code Description Rural Urban Male Female Person Rural Urban Male Female Person
    08 Nursing medical and health technicals 1 7 2 5 3 2 7 3 4 3
    15 Teachers 12 38 16 24 18 14 43 18 29 21
    30-35 Clerical workers 11 79 34 12 27 9 68 30 11 24
    40 Merchants and shopkeepers 27 97 55 19 44 32 89 58 20 46
    51-54 Domestic services 5 44 9 28 15 8 55 13 35 20
    55-56 Personal services 10 13 11 10 11 8 16 11 8 10
    61 Cultivators 371 35 283 309 291 384 37 283 326 297
    63 Ag labourers 305 31 205 317 239 245 23 163 247 190
    71 Miners and quarrymen 3 3 3 2 3 3 3 4 2 3
    75 Spinners, weavers, etc 10 28 13 18 15 9 29 13 16 14
    77 Food and breavage processors 6 13 8 7 8 6 8 7 6 7
    79 Tailors, dress makers, etc 9 34 14 16 15 12 46 17 28 20
    95 Brik layers and other construction
    workers 21 44 33 10 26 31 47 45 5 33
    98 Trspt eqpt operators 14 52 33 0 23 17 54 38 Nil 26
    99 Labourers nec 24 49 36 15 30 24 30 32 12 25
    3126 Economic and Political Weekly July 28, 2007

    and technical workers and administrators, executive and managerial workers.

    III Labour Productivity and Real Wages

    Table 10 presents our estimates of number of workers by broad Industry groups, built up by combining segment-specific estimates of workforce (Table 4) and (segment specific) industry-group shares (Table 7), for all-India for 1999-2000 and 2004-05. Combining these estimates with the NAS – estimates of GDP (at constant 1999-2000 prices) for the two years, we derive constant price estimates of GVA per worker for the two years. Below the estimates for 2004-05, we also present the compound rates of growth of the relevant variables over the period 2000-2005. For easy comparison, column 9 presents comparable rates of growth for GVA per worker over the period 1993-94 to 1999-2000.

    Having discussed the rates of growth in sectoral workforce in the previous section, let us focus on the trends in labour productivity across sectors as measured by GVA per worker, and their rates of growth between 2000 and 2005.

    In terms of levels, Agriculture and Allied Activities, with over 56 per cent of the workforce, not only continues to have the lowest GVA per worker but also, its position vis-a-vis the productivity of the total workforce has worsened from being 42 per cent of overall GVA per worker in 1999-2000 to just 37 per cent in 2004-05.

    Construction, with about 6 per cent of the workforce, has the second lowest GVA per worker (still three times that in the agriculture sector). Over the period 2000-2005, labour productivity grew at less than one-fourth of one per cent per annum adding less than Rs 150 per year.

    In the manufacturing sector, where employment grew at an impressive 4.75 per cent per annum between 2000 and 2005, the growth in GDP averaged 6.44 per cent per annum. The high employment elasticity of manufacturing sector implicit in these two numbers also implied that labour productivity in this sector grew at less than 1.6 per cent per annum – roughly half the rate of growth of labour productivity of the total workforce. So that, the excess of labour productivity in manufacturing relative to that in the economy as a whole falls from 33 to 23 per cent over this period.

    Two sectors, Trade, Hotels and Restaurants, and Transport, Storage and Communication (together employing 14 per cent of the total workforce) – especially the latter – record a strong growth in labour productivity over the period 2000-2005.

    Except for the two sectors noted above, and the Construction sector, where a small negative growth between 1994 and 2000 turns into a small positive growth between 2000 and 2005, in each and every other sector and for the economy as a whole, labour productivity growth over the period 2000-2005 has been lower, and significantly so, than the growth in labour productivity realised between 1993-94 and 1999-2000.

    While the levels of and trends in labour productivity directly impinge on the returns to labour of the self-employed across sectors, in a market economy, they also shape the level of and the trends in real wage rates of casual labourers.

    Given the significant slowdown in the rate of growth of labour productivity between 2000 and 2005 relative to that realised between 1994 and 2000, the significant slowdown in the rate of growth of real wage rates for rural male and rural female casual labourers (Table 11) should not surprise anyone. What is striking however, is the fact that, both for males and females, the real wage rates for adult casual labourers in urban areas have actually declined. Significantly, over this period there has been very little

    Table 10: Number of Workers, Gross Value Added and GVA Per Worker at 1999-2000 Prices by Broad Industry Groups: All-India, 1999-2000 – 2004-05

    1999-2000 2004-05
    S Industry Groups No of Workers GDP GVA Per No of Workers GDP GVA Per Worker Rate of
    No (000) (Rs Crore) Worker (000) (Rs Crore) (Rs) Growth of
    (Rs) GVA/Worker
    1994-2000
    (1) (2) (3) (4) (5) (6) (7) (8) (9)
    1 Agriculture and allied activities 2,40,896 4,54,061 18,849 2,58,663 4,97,351 19,228 2.65
    (1.43) (1.84) (0.40)
    2 Mining and quarrying 1,883 41,594 2,20,892 2,548 52,594 2,06,413 10.69
    (6.24) (4.80) (-1.35)
    3 Manufacturing 44,260 2,64,113 59,673 55,900 3,60,822 64,548 5.61
    (4.75) (6.44) (1.58)
    4 Electricity, gas and water 1,054 44,732 424,402 1,211 53,097 4,38,456 11.59
    (2.82) (3.49) (0.65)
    5 Construction 17,747 1,05,149 59,249 25,998 1,55,920 59,974 (–)0.48
    (7.94) (8.20) (0.24)
    6 Trade, hotels, restaurants and 41,453 2,54,143 61,309 49,593 3,71,410 74,892 4.16
    repair services (3.65) (7.88) (4.08)
    7 Transportation, storage and communication 14,848 1,31,754 88,735 18,587 2,38,705 1,28,426 2.73
    (4.59) (12.62) (7.67)
    8 Finance, insurance, real estate and 4,925 1,40,567 2,85,415 7,780 2,16,131 2,77,810 6.84
    business services (9.58) (8.99) (–0.54)
    9 Social, community and personal services 33,727 263,994 78,274 37,619 3,43,218 91,235 7.63
    (2.21) (5.39) (3.11)
    10 All 4,00,793 17,92,292 44,719 4,57,899 23,93,671 52,275 5.37
    (2.70) (5.96) (3.17)

    Notes: (1) Figures for GVA (and GVA per worker) in row 8 exclude contribution to GDP from dwellings by way of actual and imputed rentals.

  • (2) Figures within brackets indicate the compound rate of growth (per cent per annum) between 1999-2000 and 2004-05 of the variable in each cell.
  • (3) Figures in column (9) for rate of growth of GVA per worker between 1993-94 and 1999-2000 are based on GDP values at 1993-94 prices and with the 1993-94 workforce estimates by sectors revised as per NIC 1998 and comparable to the present set of estimates.
  • Sources: (1) Estimates of number of workers computed by the author, separately by gender and rural-urban location for each broad industry-group combining level estimate of total workforce (Table 4) and industry-group shares in Table 6.

    (2) Estimates of gross domestic product as 1999-2000 prices from CSO, National Accounts Statistics 2006, July 2006.

    increase in the number of casual labourers (only 70,000 over a five-year period) in urban India.

    IV Estimates of Poverty in India: 1994-2000

    Two recent papers by S Mahendra Dev and Ravi, and Himanshu (both in EPW, February 10, 2007), have analysed recent trends in poverty and inequality and have come to broadly similar conclusions: that the pace of poverty reduction accelerated (sharply according to Himanshu) between 2000 and 2005 relative to the reduction between 1994 and 2000.

    In the absence of a size-distribution of persons by expenditure classes on the mixed reference period in the only published report (Report No 508) based on the 61st round Consumer Expenditure Survey, Himanshu’s results are based on estimates of household consumer expenditure canvassed on a worksheet in the NSS 55th and 61st employment-unemployment surveys both using a mixed reference period. Mahendra Dev and Ravi too have to approximate the size-distribution on mixed reference period with only the size-distribution of persons on uniform reference period and mean per capita expenditure on MRP, which, in many cases, fall outside the defined expenditure class intervals, as available raw materials.

    However, at least at the all-India level, there is a better alternative available in Tables 6R and 6U of Report 508. They present the per 1000 break-up of households by adjusted MPCE Class (based on 365-days’ data for clothes, footwear, education, medical (institutional) and durable goods). This can be used directly to estimate, in the first instance, the proportion of households below the poverty line in 2004-05 with parallel estimates from the NSS 55th round Consumer Expenditure Survey – with or without adjustments for so-called “contamination”. And, corresponding to this proportion of households below the poverty line on the mixed reference period drawn from the 61st round Consumer Expenditure Survey, we can derive the proportion of persons below the poverty line or the headcount ratio (HCR) from the 61st round Employment-Unemployment Survey.5

    However, this is possible only at the all-India level. So that, we cannot derive the all-India HCR as a weighted average of state/segment specific HCRs. However, given an all-India poverty line, this procedure can be implemented by using the all-India poverty line on the all-India size-distribution – in this case, of households – from the 61st Consumer Expenditure Survey in the first instance, and, thence, derive estimates of headcount ratios (of persons below poverty line) from the 61st round Employment-Unemployment Survey.

    Before presenting our results, which are based on a slightly different set of poverty lines for all-India, let us first put together the results based on the Planning Commission poverty lines for 1999-2000 and 2004-05 (Table 12).

    As can be readily seen, the order of decline, between 2000 and 2005, in the proportion of poor households (4.5 percentage points in rural India and 1.5 percentage points in urban India) and that in HCR for persons (respectively, 4.3 and 1.5 percentage points in rural and urban India) are roughly the same.

    In contrast, Mahendra Dev reports a decline in HCR between 2000 and 2005 of the order of 5.6 percentage points for rural India and 3.7 points for urban India, while Himanshu reports a whopping 9.1 percentage point reduction for rural India and a 3.9 percentage point reduction for urban India.

    It needs to be stressed that our estimates of the proportion of households below the poverty line for 2004-05 are based on the 61st round Consumer Expenditure Survey results for mixed reference period and are, therefore comparable with the results of the 55th round Consumer Expenditure Survey. So that, prima facie, there is a strong presumption that the results of both Himanshi and Mahendra Dev and Ravi about the order of decline in HCRs in both rural and urban India over the period 2000-2005 need to be substantially revised downwards.

    To answer the question whether the pace of poverty reduction has accelerated between 2000 and 2005 relative to the period 1994-2000, Table 12 also presents the estimates of HCRs for

    Rate of Growth

    (Per cent per annum)

    Table 11: Rate of Growth of Real Wages of Adult (15.59) CasualLabourers: All India 1983-2004-05

    Segment/Period 1983-1993-94 1993-94 to 1999-2000 to
    1999-2000 2004-05
    Rural males
    Agriculture 2.75 2.78 1.43
    Non-agriculture 2.39 3.70 0.73
    All activities 2.51 3.59 1.80
    Rural females
    Agriculture 3.09 2.94 1.10
    Non-agriculture 4.08 4.07 1.57
    All activities 4.10 5.04 1.44
    Urban males
    Agriculture 1.97 2.73 (-) 1.22
    Non-agriculture 1.45 2.93 (-) 0.51
    All activities 1.50 3.09 (-) 0.39
    Urban females
    Agriculture 4.21 2.96 (-) 2.35
    Non-agriculture 2.97 4.18 (-) 0.74
    All activities 2.91 3.91 (-) 1.05

    Source: For rural areas, estimates for the periods 1983-1993-94 and 19932000 are drawn from Sundaram (2001). For urban areas, estimates for the periods 1983-1993-94 and 1993-94 to 1999-2000 are drawn from Sundaram and Tendulkar (2006). For the period 1999-2000 to 2004-05, growth rates of real wages (at 1999-2000 prices) in both rural and urban areas have been computed from published reports (Nos 458 and 515) of NSS Employment-Unemployment Surveys for 1999-2000 and 2004-05.

    Table 12: Estimate of Head Ratios of Households and Persons with Planning Commission and Alternative Poverty Lines:All-India: 1993-94 – 2004-05

    Headcount Ratios

    (Per cent)

    Households Person 1993-1999-2004-1993-1999-200494 2000 05 94 2000 05

    Panel A: With Planning Commission Poverty Lines Rural 28.0 23.3 18.8 31.8 27.0 22.7 Urban 22.7 18.1 16.6 28.1 23.4 21.9

    PC Poverty Lines: 1993-94 : Rural : 205.84 Urban : 281.33 1999-2000 : Rural : 327.56 Urban : 454.11 2004-05 : Rural : 356.30 Urban : 538.60

    Panel B: With Alternative Poverty Lines Rural 30.3 25.1 21.7 34.2 28.9 25.5 Urban 21.3 17.8 17.4 26.4 23.1 22.8

    Alternative Poverty Lines: 1993-94: Rural: 211.30, Urban: 274.88 1999-00: Rural: 335.46, Urban: 451.19 2004-05: Rural: 371.29, Urban: 546.20

    Notes: (1) Alternative poverty lines have been updated by reference to CPIAL for rural India and CPIIW for urban India.

    (2) All estimates for 1993-94 are on mixed reference period and estimated from Unit Record Data. See Sundaram and Tendulkar (2005).

    households and persons for 1993-94 with Planning Commission poverty lines for all-India.

    In terms of households below the poverty line in rural India, the average annual decline between 1994 and 2000 was 0.75 percentage points per year, i e, at a compound rate of a little over 3 per cent per annum while the rate of decline between 2000 and 2005 was 0.9 percentage points per year or, on a smaller base, at a little over 4.2 per cent per annum.

    In urban India, the rate of reduction in HCR of households was 0.77 points per annum at a compound rate of 3.7 per cent per annum between 1994 and 2000, while between 2000 and 2005, the urban HCR for households declined by just 0.3 points per year or 1.7 per cent per annum.

    In terms of persons, with the Planning Commission poverty lines, in rural India, HCR declined by 4.8 percentage points or

    0.8 points per year or at 2.7 per cent per annum between 1994 and 2000 and by 0.9 points per year or at 3.4 per cent per annum between 2000 and 2005 indicating a small increase in the pace of poverty decline in the first five years of the 21st century. In urban India, however, in terms of HCR for persons also we have a clear slowdown – from 0.78 points per year between 1994 and 2004 to just 0.3 points per year between 2000 and 2005.

    Our estimates of poverty, based on alternative poverty lines (Panel B, Table 12) however indicate that this result of a slightly faster pace of poverty reduction between 2000 and 2005 is reversed with a small reduction in the pace of poverty reduction from 2.8 per cent per annum to 2.5 per cent per annum. Our estimates with alternative poverty lines also reinforce the result of a slower reduction in urban poverty between 2000 and 2005 relative to that between 1994 and 2000.

    The above results of a marginal rise (or a marginal reduction depending upon the choice of poverty lines) in the pace of poverty reduction in rural India and a clear slowdown in the pace of poverty reduction in urban India between 2000 and 2005 are consistent with the slowdown in the rate of growth of labour productivity across most sectors and in real wages of casual labourers in rural India and the absolute decline in real wages of casual labourers in urban India that we discussed in the previous section.

    V The Working Poor and the Quality of Employment

    In this the final section of the paper, we track the changes in the number of workers in “below poverty line” or BPL households or the working poor and its complement, those located in households above the poverty line or APL households. As we have argued elsewhere [Sundaram 2007], changes in the number of workers in APL households are a good indicator of the quality of employment – especially of the self-employed.

    Consider first our estimates of the working poor and the underlying headcount ratios for workers differentiated by gender, activity-status and rural-urban location (Table 13).

    In the country as a whole and taking all activity-status and gender categories together, we find a small increase (1.3 million) in the number of working poor who totalled a little under 105 million at the beginning of 2005. This rise in the number of the working poor occurs despite a fall in the headcount ratio for the total workforce: from 25.7 per cent to 22.8 per cent between 2000 and 2005.

    The rise in the total number of working poor is primarily the net result of two offsetting movements: an increase of a little under 6.2 million in the number of self-employed poor more than compensating a decline in the number of casual labourers by a little under 5.5 million. While the rise in the number of selfemployed poor occurs despite a 1.6 percentage points decline in HCR, the reduction in the number of casual labourers in BPL households reflects the combined effect of an absolute reduction in the number of casual labourers – from 132.4 million in 2000 to 129.7 million in 2005 – and a reduction in the HCR for such workers from 39.3 per cent to 35.9 per cent over the same period.

    Number of UPSS Workers in BPL Households

    Table 13: The Working Poor in India by Gender, Activity-Status and Rural-Urban Location: All-India, 1999-2000 to 2004-05

    Population Segment 1999-2000 2004-05
    SE RWS CL Total SE RWS CL Total
    Rural (Males + Females) 35,151 2,615 44,528 82,294 38,281 2,611 38,590 79,482
    (20.8) (12.4) (38.7) (26.9) (18.6) (10.8) (34.3) (23.2)
    Urban (Males + Females) 9,243 4,103 7,522 20,868 12,271 4,740 7,994 25,005
    (23.0) (10.8) (43.6) (21.9) (23.5) (10.4) (46.2) (21.7)
    Males (Rural + Urban) 28,449 5,432 32,560 66,441 31,402 5,451 30,090 66,943
    (20.1) (11.0) (37.7) (24.0) (18.7) (9.7) (35.3) (21.6)
    Females (Rural + Urban) 15,945 1,286 19,490 36,721 19,150 1,900 16,494 37,544
    (23.5) (13.6) (42.2) (29.7) (21.1) (14.2) (37.0) (25.3)
    Person (Rural + Urban) 44,394 6,718 52,050 103,162 50,552 7,351 46,584 104,487
    (21.2) (11.4) (39.3) (25.7) (19.6) (10.5) (35.9) (22.8)

    Notes: Figures within brackets refer the proportion of workers in that population segment and activity-status, who are located in below poverty line (BPL) households. HCRs are based on the alternative poverty line indicated in Table 11.

    Average Annual Increments to Workers in All-Households

    Table 14: Average Annual Increments to Workers in APL-Households by Activity-Status and Rural-Urban Location: All-India, 1983-2005

    Rural 1983-94 1994-2000 2000-05 SE 2697 1149 6772 RWS 283 435 651 CL 1910 2613 629 All 4890 4496 8052 1983-94 572 629 112 1313 Urban 1994-2000 923 1038 385 2346 2000-05 1822 1363 (-) 80 3105 1983-1994 3269 912 2022 6203 All Areas 1994-2000 2072 1473 2998 6842 2000-05 8594 2014 543 11,152
    Economic and Political Weekly July 28, 2007 3129

    By gender, women workers experience a sharper reduction in their HCR relative to their male counterpart. Consequent upon an over 5 percentage point reduction in HCR, there is a sharp reduction in the number of female casual labourers in BPL households – by 3 million – in the first quinquennium of this century. Curiously, despite a marginal reduction in their HCR, there is a rise in the number of female RWS workers in poor households. The biggest contributors to the rise in the number of female workers in BPL households are, however, the selfemployed. The number of poor female self-employed workers increased by over 3 million (despite a reduction in HCR for female self-employed workers) between 2000 and 2005.

    In urban India, while the RWS workers record a small reduction in HCR (but a very marginal rise in the number of such workers in BPL households) both the self-employed and the casual labourers

    – especially the latter – record a rise in HCR. At 2.6 percentage points, the rise in HCR for casual labourers in urban India is quite sizeable but is also entirely consistent with the absolute decline in real wages of such workers discussed earlier. Overall, the number of working poor in urban India rose by a little over 4 million between 2000 and 2005.

    In rural India, there is a decline in HCR for all the three activitystatus categories. Aided by a 2.8 million reduction in the total number of casual labourers in rural India and a decline in their HCR by 4.4 percentage points, the number of rural casual labourers in BPL households declined by close to 6 million between 2000 and 2005. This is only partially offset by the rise in the number of self-employed poor in rural India (by a little over 3 million). So that, despite a significant growth in the total rural workforce, we have a 2.8 million reduction in the number of working poor in rural India.

    Finally, we look at the quality of employment growth. In an earlier paper [Sundaram 2007], we had argued that a useful indicator of employment quality especially for the self-employed where the returns to labour per se are ill-defined and virtually impossible to measure through single visit surveys such as the NSS Employment-Unemployment Surveys – would be whether they are located in “above poverty line” or APL households.

    In Table 14, we present our estimates of the average annual increments to the number of workers in APL households for three time periods: 1983-94; 1994-2000; and 2000-2005. They are presented separately for the rural and the urban areas and for the country as a whole. In each case, the three activity-statuses

    – namely, self-employment, regular wage/salary work and casual labour – are distinguished.

    In comparison with the 1980s (the period between the 1983 and 1993-94 NSS Employment-Unemployment Surveys), we find that, in rural India, while the annual increments to the selfemployment workers in APL households records a sharp rise of nearly 6.8 million between 2000 and 2005 after a 1.5 million reduction between 1994 and 2000, the average annual increments to casual labourers falls in APL households by close to 2 million between 2000 and 2005 after a small rise (0.7 million) between 1994 and 2000. The annual increments to RWS workers in APL households records a steady rise over the three periods.

    Taking all three activity-status categories together, the average annual increments to the rural workers in APL households has risen by a little over 80 per cent in 2000-2005 period relative to that

    INDIRA GANDHI INSTITUTE OF DEVELOPMENT RESEARCH Film City Road, Goregaon (E), Mumbai-400065

    Young Scholars’ Programme

    Young scholars in the field of Social Sciences, Humanities, Mathematics and Statistics who are interested in Human Development are invited to participate in a Young Scholars’ Programme for capacity development. This programme is the second batch of the successful and well-received YSP first held in June 2007 and is planned for the end of September-first week of October period. The Programme is supported by UNDP/ Planning Commission and hopes to build research capacity on various aspects of Human Development. Those who have finished their master’s degree this year or the preceding three years may apply. Recently appointed college lecturers are also encouraged to apply. The total intake will be 35-40 students from all over India.

    The Programme will consist of lectures, discussion groups and individual research, for which library and other facilities will be provided by IGIDR. All selected participants will be expected to give a short presentation or write a 2000 word note on a human development topic of their interest.

    Those selected will be given full boarding and lodging on a twin-sharing basis at IGIDR, and a modest stipend for out-of-pocket expenses. Travel expenses will be reimbursed for an amount up to Three-tier AC travel (including Tatkal charges where necessary). Accommodation may also be available for those wishing to stay on preceding or succeeding days in case of travel exigencies.

    Selection will be on the basis of CV and a half page note on motivation. These should be sent by email to: ysp@igidr.ac.in on or before 19th August 2007. Only those selected will be informed along with the firm dates.

    between 1994 and 2000 and by close to two-thirds relative to the average annual increments in such workers between 1983 and 1994.

    In urban India, the average annual increments to workers in APL households has increased over the successive periods, with the 2000-2005 period recording a 32 per cent jump relative to that realised between 1994 and 2000. Relative to the 1980s, the annual average increments to “good quality” employment has more than doubled in the first five years of this century. This has been made possible by a near – doubling of the annual average increments to the number of self-employed located in APL households in the period 2000-2005 relative to the 1994-2000 period. Not surprisingly, given the rise in HCR among urban casual labourers between 2000 and 2005 noted earlier, there is an absolute decline in the number of urban casual labourers located in APL households.

    In the country as a whole, a little over 11.1 million workers were added every year to the above poverty line households between 2000 and 2005 which very nearly equals the average annual increments to the total workforce over this period (with BPL workers growing by 0.26 million per annum). Mirroring the situation in rural India, there has been a big jump (over 30 per cent) in the average annual increments to the self-employed workers in APL households.

    It is also significant that the number of RWS workers in APL households has increased by a little over 2 million per annum between 2000 and 2005 – more than double the average annual growth in such workers in the 1980s. Even between 1994 and 2000, the average annual increments to RWS workers in APL households was over 50 per cent higher than that between 1983 and 1994. This, taken with the larger increments to the total number of RWS workers should dispel any lingering notion of the period since 1993-94 being a period of “jobless growth”.

    As a group, casual labourers, have not done as well – especially in the urban areas – as the other two activity-status categories. The sharp slowdown in the average annual increments to casual labourers in APL households between 2000 and 2005, relative to both the 1994-2000 and the 1983-1994 periods, well reflects the slowdown in the growth of real wages of adult casual labourers in rural India and the absolute decline in real wages of these workers in urban India between 2000 and 2005.

    To summarise:

    The first quinquennium of the 21st century saw a sharp acceleration in workforce growth – especially of females – with a little over 57 million added to the total workforce. Of this incremental workforce 49 million were self-employed and 10.7 million were RWS – workers – dispelling any notion of “jobless growth”. The number of casual labourers, however declined by a little over

    2.7 million.

    In terms of industrial distribution, a spectacular 4.8 per cent per annum growth in manufacturing employment and a continued decline in the share of agriculture – to a little over 56 per cent

    – is noteworthy. Despite some occupational diversification, India still remains a land of farmers, fishermen, hunters and loggers, with marginal gains in the share of production process workers and of professional and technical workers, and administrators, executive and managerial workers.

    The obverse side of the acceleration in workforce growth is the slowdown in the rate of growth of labour productivity across most sectors and in the economy as a whole. Not surprisingly, we also have a slowdown in the rate of growth of real wages of casual labourers in rural India and an actual decline in real wages in urban India.

    Our analysis of poverty shows that, on a comparable basis, reduction in poverty is substantially smaller than indicated by Himanshu and Mahendra Dev and Ravi. Relative to the pace of poverty reduction between 1994 and 2000, we have, at best, a marginal acceleration (or, deceleration, depending on the choice of the poverty lines) in rural India, and a clear slowdown in urban India in the pace of poverty reduction between 2000 and 2005.

    Finally, reflecting largely the net result of a decline in the number of casual labourers in BPL households (5.5 million) and a rise in the number of self-employed from (6.2 million), the number of working poor rose by a little over 1 million between 2000 and 2005 with their number totalling a shade under 104.5 million as on January 1, 2005.

    EPW

    Email: sundaram@econdse.org

    Notes

    [The author is grateful to Surjeet Singh, Centre for Development Economics, Delhi School of Economics for excellent typing support.]

    1 These projections were carried out (and kindly made available to me) by P N Mari Bhat. Needless to say, the responsibility for the interpolationbased estimates of age-distributions for January 1, 2005 rests solely with the author.

    2 If we had gone with projections-based age-distributions, the estimated workforce would be higher by 3.5 million, which, at 0.76 per cent of the estimate based on the survey-based age-distribution, is quite small.

    3 The WPR in the 60+ age group for 1999-2000 is perhaps too low and

    the 2004-05 figure more in line with the trends since 1983. 4 As noted in an earlier footnote the differences are quite negligible.5 A similar methodology was used by us earlier to analyse the poor in

    the Indian labour force [Sundaram and Tendulkar 2003].

    References

    Government of India, National Sample Survey Organisation (2001): ‘Employment and Unemployment Situation in India 1999-2000, NSS 55th Round (July 1999-June 2000)’, Report No 458, New Delhi, May.

  • (2006): ‘Employment and Unemployment Situation in India, 2004-05,NSS 61st Round (July 2004-June 2005)’, Report No 515, New Delhi, September.
  • (2006): ‘Level and Pattern of Consumer Expenditure in India, 2004-05, NSS 61st Round (July 2004-June 2005)’, Report No 508, New Delhi, December.
  • Government of India, Planning Commission (2001): Report of the Task Forceon Employment Opportunities (Chairman: Montek S Ahluwalia), New Delhi, June.

    Himanshu (2007): ‘Recent Trends in Poverty and Inequality: Some Preliminary Results’, Economic and Political Weekly, February 10. Mahendra Dev, S and C Ravi (2007): ‘Poverty and Inequality: All-India and States, 1983-2005’, Economic and Political Weekly, February 10.

    Office of Registrar General and Census Commissioner, India (2006): ‘Census of India 2001, Population Projections for India and States 2001-2026’, Report of the Technical Group on Population Projections constituted by the National Commission on Population, New Delhi, May.

    ORG and CCI (2006): ‘Report of the Technical Group on Population Projections Constituted by the National Commission on Population’, May.

    Sundaram, K (2001): ‘Employment and Poverty in 1990s: Further Results from NSS 55th Round Employment-Unemployment Survey, 1999-2000’,Economic and Political Weekly, August 11.

  • (2007): ‘Growth of Work Opportunities in India, 1983-99 to 2000’ in A Vaidyanathan and K L Krishna (eds), Institutions and Markets in India’s Development, Essays for K N Raj, Oxford University Press, New Delhi.
  • Sundaram, K and Suresh Tendulkar (2003): ‘Poor in the Indian Labour Force: Scenario in the 1990s’, Economic and Political Weekly, November 27.
  • (2005): ‘Poverty Outcomes in India in the 1990s’ in Angus Deaton and Valeri Kozel (eds), The Great Indian Poverty Debate, Macmillan, New Delhi.
  • (2006): ‘Changing Structure of India Workforce, Quality of Employmentand Real Earnings, 1983-2000’ in Institute for Human Development,India: Meeting the Employment Challenge, Conference on Labour and Employment Issues, July 27-29, New Delhi.
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