9th Five Year Plan (Vol-1)
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Employment Perspective
Labour Force Growth and Employment Requirement || Quality of Employment || The Regional Dimension

Quality of Employment

4.13 In addition to the total number of employment opportunities created, it is equally important to examine both the consistency of the work opportunities with the skill attributes of the labour force and the quality of employment in terms of providing an adequate level of income for the workers. The distribution of workers by the level of education is given in Table 4.10. As may be seen, nearly 70 per cent of the workforce is either illiterate or educated below the primary level. Even in industries other than agriculture, where skill development for improvement in productivity definitely requires a reasonable level of educational standard, 52 per cent of workforce was below the primary level of education; 26 per cent being illiterate. A pattern of development which requires skill and education levels not immediately available in the economy would lead to a mismatch between the demand and supply of labour services such that an increasisng level of unemployment in one segment of the labour market would be associated with shortages in other segments. Given the pattern of skills that are likely to be available during the Ninth Plan period, it is important to focus on the growth of sectors which have high absorption intensities of a relatively uneducated labour force. The focus on agriculture, trade and transport and construction reflect this imperative.

Table 4.10 : Distribution of workers by the level of education:1993-94(a)

                      level of general education
                     -------------------------------------------  Share in 
                                                                  work force
                    illiterate       literate   middle and  total  
                                     upto        above            
   agriculture          608           228         164      1000       566 
   rural male           493           284         223      1000       324
   rural female         812           132          56      1000       200
   rural persons        615           226         159      1000       524
   urban male           396           304         300      1000        25
   urban female         707           191         102      1000        17
   urban persons        522           258         220      1000        42
   other than
   agriculture          258           260         482      1000       434
   rural male           280           310         410      1000       121
   rural female         617           205         178      1000        31
   rural persons        349           288         362      1000       152
   urban male           163           254         583      1000       231
   urban female         418           199         383      1000        51
   urban persons        209           244         547      1000       282
   all industries       456           242         302      1000      1000
   rural male           435           291         274      1000       445
   rural female         786           142          72      1000       231
   rural persons        555           240         205      1000       676
   urban male           186           259         555      1000       256
   urban female         490           197         313      1000        68
   urban persons        250           246         504      1000       324
   Note:(a) usual status principal and subsidiary workers
  Source : Computed from NSS 50th Round Data on Employment and 

4.14 Improvement in the quality of employment can be achieved only in a situation of rapidly growing productivity to which the labour can lay a just claim. However, it is not enough to merely create the right kinds of employment opportunities, but also to provide the people with the human capital by which they can take advantage of these opportunities. Education and skill development are the essential features of such empowerment. Free and compulsory education of children supported by an adequate mid-day meal programme in schools is the first step towards this end. In addition, special programmes will have to be implemented to develop skills, enhance technological levels and provide marketing channels for people engaged in traditional occupations.

4.15 Even in a near full employment situation, wages received depend on productivity of the worker; an important determinant of which is the level of attainment of skills for production. To the extent the skills are related to a basic level of education, the situation in 1993-94 does not show very encouraging prospects. Considerable efforts have been made to increase literacy and school enrolment since 1993-94 and will continue at an accelerated pace, but with 76 per cent of workforce being 25 years and above age (61 per cent of workforce being 30+), the benefits from increased level of educational attainment of an average worker will show up only towards the end of the perspective period 1997-2012. In the medium term, a strategy of maximising the earnings of the existing workforce will necessarily have to rely on increasing the earnings of agricultural labour which accounts for 57 per cent of the workforce, and the operations require more of the field level skills rather than educational. Any increase in agricultural and allied sectors productivity will directly benefit the incomes of labour engaged therein. But in the medium term the prospects of increasing the quality of employment for an average worker, through improvements in productivity, are indeed circumscribed by what is feasible in agriculture sector, and the improved earnings of the younger, better educated and trained workers, realised through their contribution to growth of output in other sectors.

4.16 The strategy during the Ninth Plan will have to focus attention on bringing about awareness among the unorganised workers, particularly in agriculture, about the intention underlying the legislations, encouraging organisation of workers to take advantage of the legislative intentions to the fullest measure,and providing effective redressal mechanisms to enforce their rights. In addition to minimum wage legislations which exist in all States, the Government has drawn up a Bill on Safeguarding the Rights of Agricultural Workers and another for construction labour. Unanimity among the States needs to be evolved on these legislative intentions. One of the most important weaknesses of the Indian employment and social sector programmes has been its inability to inform the target beneficiaries about the schemes that are available and to which they have a rightful claim. The Ninth Plan therefore stresses the creation and deployment of an effective information dissemination system, and the necessary redressal mechanism for making the demands effective. Indeed, information is the basis of any empowerment process. The informatics revolution has changed the character of economic transactions the world over in a fundamental manner. The Ninth Plan emphasises the creation of a basic informatics infrastructure with universal access, along with the development of the other, more traditional, forms of infrastructure,in a manner such that the poor and underprivileged have the information necessary to make them effective participants in the process of development and to exercise their rights and prerogatives.

4.17 Another area of concern regarding the quality of employment relates to security of work opportunities that are being created. A gradual increase in proportion of casual labourers is observed over the recent two decades; from 23 per cent in 1972-73 to almost 32 per cent in 1993-94. This increase was mainly at the cost of the self- employed, whose proportion fell from 61 per cent in 1977-78 to about 55 per cent in 1993-94. The proportion of regular employed varied between 13 - 16 per cent during the period 1972-1994( about 16-20 per cent among male workers and 5 - 7 per cent among female workers). There has been a decrease in proportion of regular employees among urban male workers from 51 per cent in early seventies to 44 per cent in eighties and to 42 per cent in early nineties. Among rural male workers also, the proportion has decreased from 12 to 8 per cent. But among female workers, the share of regular workers has remained stable at 3 - 4 per cent in rural areas and 25 -28 per cent in urban areas.

4.18 The reported rise in share of casual workers is not necessarily disadvantageous if wage rates received by them ensure an adequate level of living. The NSS data on wage earnings of casual labourers have indicated a rise in real wages in rural areas between 1977-78 and 1987-88. Between 1987-88 and 1993-94, the average wage earnings of rural casual labourers have risen from Rs. 10.77 per day worked in 1987-88 to Rs. 20.21 or by 88 per cent. The increase was 86 per cent from Rs.12.29 to Rs.22.82 among males and about 100 per cent from Rs.7.59 to Rs. 15.15 among females. The consumer price index for agricultural labourers had increased about 77 per cent during this period. Thus, the tendency towards a rise in real wages of casual labourers has continued between 1987-88 and 1993-94. As the process continues, the small and marginal land holdings would cease to restrict the mobility of workers in search of better work opportunities and could improve the effective land man ratios.

4.19 The direction of change in wages of casual labour shows improvement in benefit from employment, but even at the 1993-94 level of prices the absolute wage levels at Rs. 15 per day in rural areas and Rs. 22 in urban areas cannot afford a reasonable level of well being, let alone the reasonable level of social security to an average worker. The situation of near full employment by 2007 that is being projected, under the assumptions stated, does not necessarily imply a kind of employment that ensures an appropriate level of living to those who are employed. As discussed later, incidence of poverty exceeds unemployment in India. In the existing state of economic and statistical information, it is not possible to directly project the effect of an increase in income from growth on payment of compensation to labour, which is the real indicator of quality of employment. However, the data available from the National Sample Surveys does provide some indicators of the kind of employment that is available to those identified as employed by the existing measures of employment. Although the time disposition of persons employed under the US basis is not available for the reference period, and therefore cannot be used for the purpose of examining the quality of employment, such information is available for the alternative measure of chronic unemployment, i.e., the CWS. Although this may not be entirely compatible with the US basis, it gives an indication of the nature of the problem. For example, about 5 per cent of persons who are identified as employed by the current weekly status concept, get work for three days or less in a week; in the case of the rural female identified as employed on the same concept but getting work for less than half a week, being much higher at around 10 per cent as may be seen in Table 4.11.

Table 4.11 :  Persons Employed  according to Current Weekly Status 
 	      Concept distributed by number of days worked in a week
                          ( per thousand of employed)            
Days worked        Rural           Urban              All Areas
 in a week   Male  Female   Male    Female    Male   Female   Persons
0.5 - 1.0    5       11       3        14        5       12        7
1.5 - 3.0   28       87      14        59       26       84       44
3.5 - 5.0   67      246      37       183       62      239      118
5.5 - 6.0   27       36      35        38       29       36       31
6.5 - 7.0  873      620     911       706      878      629      800
   All     1000     1000    1000      1000     1000     1000    1000


4.20 Under-employment among those assessed as employed' arises due to two kinds of factors. Firstly, the labour time of a person classified as employed' over the reference period' may not be utilised fully. Thus, for instance, a long reference period over which the status of a person is assessed to classify him as employed' or unemployed' may include many short spells of unemployment. If the aggregate time of such spells of unemployment is a minor part of the total reference period, the person is assessed as employed because he/she worked for major part of the reference period but, clearly, the work that was available to her/him could not utilise the labour time of the person fully. This kind of under-employment among the employed persons is visible'. The other factor causing underemployment is related to income from work. Though the labour time of an employed person may be utilised at work, uniformly, over the reference period, and hence the person is seen as employed, but the compensation received from the time at work may not yield adequate income.' Such under-employment is referred to as invisible under-employment'.

4.21 Problem of visible under-employment' has to be understood with reference to a more precise analysis of use of labour time than what is done in classifying a person as employed' or unemployed.' Invisible under-employment has to be examined in the context of income from work'. However, under-employment due to any reason whatsoever is ultimately responsible for inadequacy of income of an employed person.

4.22 Under-employment indicates the possibility of fuller utilisation of the available resources. The social significance of the problem, which gives urgency to finding speedy solutions for it, must, however be traced to the need for raising the income of the under employed. The under employed have some kind of opportunity for work which, however, do not yield adequate income.

4.23 Quantification of incidence of under-employment is difficult. To measure under-employment, "adequate income" below which a person can be considered as under employed has to be specified. This is the problem of defining a reference level' to demarcate the underemployed. Given the sharp variation in income across occupations, it is difficult to specify one "adequate income" for the entire workforce. The other poblem is of measurement' even if a reference level income could be prescribed. For example, a "minimum wage" is fixed by each State for its workers on a normative basis. The level of minimum wage also differs across industries; agriculture etc. in the States. Even if a set of minimum wages' could be accepted as criteria for identifying the under-employed, these can be used only for those employed on wages, and not for the entire workforce. Fifty-five per cent of the workers are in the self-employed category (in 1993-94 as per 50th round of NSS). The concept of minimum wage' is not applicable here. Self-employed have mixed income, which includes wage income. But data on income of the self-employed is not available from the National Sample surveys on employment and unemployment; only the information on wages of those employed as regular or casual workers is collected. Thus the possibility of using a specified level of income as "adequate income" to distinguish the under-employed among the entire workforce also does not exist. However, certain alternative approaches are possible.

Invisible Under-employment

4.24 Some employed persons, particularly, the self-employed, may appear to work throughout the year. But in terms of productivity or income, the work they are pursuing may not be sufficient for them. They may, therefore, want additional and/or alternative work in order to supplement their income. Such under employment is termed as invisible under employment and therefore, not directly measureable. The National Sample Surveys seek to determine indicators of invisible under-employment through a set of probing questions addressed to the employed persons on their availability for additional/alternate work. Reasons for seeking additional work are also elicited. Of the usually employed persons, 6.1 per cent seek additional work. Of these 68.7 per cent do so to supplement their income; 50.6 per cent only to supplement income and the rest 18.1 per cent to supplement income and also because they do not have enough work. (Table 4.12) By this measure, 4.2 per cent of the usually employed are looking for additional work to supplement their income. But all the employed persons, who look for additional work in order to supplement income cannot be considered as under-employed, because this is a subjective assessment by the individuals, and some of them may already be having a reasonable level of income. On the other hand some of those not able to look for additional work may be earning well below a minimum acceptable level of income. Thus the incidence among the usually employed of looking for additional work to supplement income can only be a rough indicator of invisible under employment.

Table  4.12:  Usually   working   persons  who sought or  were available 
              for additional work,   and   their distribution  by  reason for 
               seeking or being  available for additional work:  1993-94a
area and       number of        distribution by reason for seeking or being
  sex          workers               available for additional work
               seeking or       ----------------------------------------------
               available          to         not        not          others
               for              supplement   enough     enough
               additional       income       work       work and
               work                                     to supple-
              (per 1000
               usually         (number per thousand of those seeking or
               working          being available for additional work)
rural male       69              522       188         174           116
rural female     60              475       186         203           136
rural persons    66              510       188         182           121
urban male       44              477       159         182           182
urban female     51              529       157         157           157
urban persons    45              487       159         177           177
      All        61              506       182         181           130
Notes: a. Source NSS Report No. 409 on the results of 50th Round of National Sample Survey on Employment and Unemployment.
1. Persons aged 15 years and above classified according to their usual principal status.

Visible Under-employment

4.25 Given the difficulties in using adequate income' to discern under-employment (even if it were possible to specify the level(s) of such income), an alternative approach to quantify under employment is the study of time disposition of workers to determine whether an employed' person is fully employed'. Data available from NSSO Surveys on employment has been used for this purpose. Usual Status' measure of employment classifies a person as employed or unemployed by studying time disposition of the person over a reference period of one year, and classifies the person as such if the person was employed for a major part of the year. However, in case of seasonal work, such a measure of employment reveals unutilisation of time i.e. does not show up as unemployment. Thus, some of the persons categorised as usually employed, do not have work throughout the year due to seasonality in work or otherwise and their labour time is not fully utilised - they are, therefore, under employed. In a country like ours agricultural activities and agriculture based industries account for more than two-third of employment. Workers employed in these activities, particularly the self- employed, though employed during the major part of the year may not find enough work during the lean season. Some of them may find alternate work and others either remain unemployed or even withdraw from the labour force. As noted earlier, it is possible to study pattern of time disposition of a usually' employed person more intensively by reducing the duration of reference period from one year. A set of persons assigned the activity status employed' on usual status basis' are reclassified to discern their activity stutus on weekly status basis'. This leads to an estimate of visible under employment. Such of the usual status employed, who turn out to be out of work in a study of time disposition on weekly status basis, are referred here as under-employed'. The reason for being out of work over the shorter reference period can either be withdrawal from labour force' or if continuing in labour force it could be non availability of work'. Incidence of visible under-employment' is the proportion of the usual status employed' who are out of work' when seen as to their activity status on weekly status basis'.

4.26 Distribution of usually employed persons by the current weekly status is shown in Table 4.13 for three previous quinquennial surveys on employment and unemployment.

Table 4.13:    Per thousand distribution of usually  employed 
                      ( principal and subsidiary status ) by their broad 
                      current weekly status in rural and  urban areas: 
                         1983, 1987-88 and 1993-94
                                                all- india : rural
  current weekly               male                        female
  status           ------------------------    -------------------------
                   1993-94   1987-88   1983    1993-94    1987-88  1983
  employed         957       931     929       807       675       657

  out of work,      43        69      71       193       325       343
  due to being
  unemployed        15        23      23        14         8        24
  not in labour     28        46      48       179       317       319
  all             1000      1000    1000      1000      1000      1000
                                               all - India : urban
  current weekly              male                     female
  status            -------------------------   ------------------------
                  1993-94   1987-88    1983    1993-94   1987-88   1983
  employed         977       967     958       884       768      767
  out of work,      23        33      43       116       232      233
  due to being:
  unemployed        11        17      17         9        17       15
  not in labour     12        16      26       107       215      218
  all             1000      1000    1000      1000      1000     1000

4.27 It is seen that the proportion of usually employed who were found to be not employed during the week preceding the date of survey, say the under employment rate, declined gradually during the period 1983 to 1993-94 and with a faster rate between the period 1987 - 88 and 1993 - 94 in general, and for females in particular. Secondly, this problem of under employment is seen to be more serious among usually employed females than among employed males, and more in rural than in urban areas. During 1993 - 94, the under employment among usually employed females was 19 per cent in rural India and 12 per cent in urban India. The corresponding percentages for usually employed males were 4 and 2 only. Most of the usually employed females who were currently not working, had withdrawn from labour force and did not report themselves as currently unemployed.

4.28 The incidence of underemployment has reduced during the past decade; with a sharper decline during the recent years. In 1993-94, 8.6 per cent of the usually employed persons were out of work when seen on a weekly status basis as compared to 15.6 in 1983 and 14.6 in 1987-88. (Table 4.14 )

Table 4.14:  Usually employed persons classified  by  their   
             current  weekly status :  1993-94,  1987-88,    
                                              Persons all India 
activity according
to current weekly         per thousand of the usually employed
                          1993-94         1987-88        1983
employed                   914               854          844
out of work, due
to being:                   86               146          156
unemployed                  14                17           22
not in labour
force                       72               128          133
all the usually
employed                  1000              1000         1000

4.29 The combined incidence of unemployment and underemployment among the labour force is shown in Table 4.15. Though open unemployment was only 2 per cent in 1993-94, the incidence of under-employment and unemployment taken together was 10 per cent in that year.

Table  4.15: Combined incidence of unemployment and under-employment: 1993-94
Activity status           Proportion of          Remarks
                          labour force
1. Labour force             100.00         Working or seeking
                                           work on usual status
2. Employed                  89.55         Usual status employed
                                           staying in work force
                                           when classified by their
                                           weekly status
3. Unemployed                 2.02         Incidence of open
                                           unemployment on usual
                                           status basis
4. Under-employed             8.43         Usual status employed
                                           going out of work
                                           when classified by 
                                           their weekly staus
5. Unemployed and     
   under-employed (3+4)      10.45         Open unemployment
                                           on usual status and the
                                           incidence of loss of
                                           work by the usually
                                           employed when
                                           classifed by their
                                           weekly status

4.30 A strategy that seeks to enhance incomes of those employed, by offering them opportunities for using their time for economically productive work, more intensively, has to provide work at places where they find stable employment. In case of females, this has to be done by creating opportunities for home based work or in locations closer to residence. Otherwise, a large number of them will have to continue to move to jobs where they arise; primarily from rural agriculture to urban construction or informal sector services, accentuating the problem of migrant workers and of a growing urban informal sector. Efforts through the planning process at moving jobs to people are definitely more cumbersome and demanding than the ones which implicitly rely on moving people to jobs, but the latter alternative poses a wide range of infrastructural and social problems at locations where the jobs are, or are expected to arise. The planning issue in such a situation is a choice between promoting economic activities that have a prospect of using productively the unutilized time of those having less stable employment, closer to the location of their main and traditional occupation as against making adequate economic and social infrastructure available at the places to which the low paid and the underemployed migrate. Institutional arrangements that promote home based work, particularly in the rural areas, offer the prospect of increasing income of the employed and also of reducing the pressures at downward revision of wages in the high growth areas.

4.31 An important component of the efforts at creating appropriate work opportunities for those in casual or seasonal employment during the Ninth Plan is the Employment Assurance Scheme (EAS), which is designed to provide 100 days of work at minimum wages on demand. Since the incidence of underemployment is fairly wide-spread all over the country, the EAS necessarily has to be universal in character. This would also enable it to address the problems of transient unemployment which occurs in the course of migration. Another important dimension of the EAS is that being demand-based in character, it has the potential to significantly increase the bargaining position of unorganised labour. Thus, the EAS can act as a minimum support price for labour and thereby effectively supplement the minimum wage legislations that seek to achieve this end. The real challenge in this regard is to be able to administratively ensure that the EAS operates in the manner it is designed to and not become ineffective through an inadequate level of preparedness. Eventually, the self-selection process which is implicit in the EAS will allow it to become the basis of a credible social security programme for the poor and the unorganised work force in the country.

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