By Anshia Dutta
According to the latest KLEMS India database which is a research project supported by the Reserve Bank of India, the employment rate of the country actually contracted by 0.1 percent in the fiscal year 2015-16 and by 0.2 percent in the financial year 2014-15. In light of the economic growth of the country in the past years and the governments promise to create more jobs, this study has revealed certain startling facts.
Findings of the study
The KLEMS India database is a part of the World KLEMS initiative. It is a study analysing the growth and productivity patterns of the Indian economy at an industrial level for twenty-seven industries during the period 1980-81 to 2015-16. The research project revealed that the countrys employment fell by 0.1 percent and 0.2 percent in the fiscal years 2015-16 and 2014-15 respectively. In contrast to the 1980s and the 1990s, when the growth of GDP was significantly lower and the employment rate was high, India had witnessed an economic growth of 7.4 percent in 2014-15 and 8.2 percent in 2015-16 but the employment had started to decline. Also, in the last ten years up to 2015-16, the compound annual growth rate of employment has been only 0.53 percent. Agriculture and its allied sectors (forestry and fishing), mining, leather, textiles, paper, transport equipment, manufacture of food products, and trade are the sectors that were hit worst in both the years.
Along with the KLEMS India database, Labour Bureaus Quarterly Employment Survey released in February 2018 had also pointed out slumping job opportunities in the country. The study looked at data from eight sectors: education, health, construction, trade, accommodation and restaurant, information technology, manufacturing, and transport. As per the survey, the manufacturing sector had lost 87000 jobs in the period April- June 2017 as compared to 12000 in 2016. It also added that only 67000 jobs were added to the economy since the last quarter, the slowest rate of increase in the three quarters.
Analysis of the agricultural and allied sectors
Despite a decline in the number of employment opportunities in the agriculture, hunting, and forestry and fishing sectors, these three areas continue to employ the most number of people. By 2007-08, employment in these sectors had grown to 244.3 million. Since 2013, employment in agriculture and allied sector has fallen from 217.6 million people in 2013-14 to 202.6 million in 2015-16, thereby declining at a rate of 6.8 percent. On account of poor productivity in the agriculture sector between 2014 and 2016, marginal farmers moved out and found other job opportunities. It is reported that 70 percent of such people found work in the construction sector but the productivity of this sector had also started to decline. They were mostly employed in building roads and other public works. The remaining 30 percent started looking for job opportunities elsewhere but a majority of them failed to find other sources of income.
Since 2013, the electrical and optical equipment sector has added 589,000 employees. Between 2014 and 2015, another 294,000 were employed. This is the only sector whose growth rate has been on the high side since 2011. This sector witnessed a growth of 9.1 percent between 2014 and 2015.
Timeline for the future
A lower growth rate, accompanied by the effects of demonetisation and implementation of the Goods and Services Tax which adversely affected the informal sector is likely to give worse figures of the employment levels for the fiscal years 2016-17 and 2017-18.