Self-employment is up again

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: The first half of the current decade saw India perform reasonably well on the growth front. Even more impressive was the fact that this growth had translated itself into jobs. The 61st round of the NSSO quinquennial survey, which covered the period 1999-00 to 2004-05, revealed that 60 million jobs had been created in these five years. India was among the top performers in growth rate of workforce and created the largest number of jobs in absolute terms.

The aggregate picture relating to the employment scenario as it emerges from the 61st round data reveals that:

* The annual growth rate of workforce increased from about 1% in 1993-94 to 1999-00 to 2.9% in 1999-00 to 2004-05, resulting in an incremental employment of 60 million.

* There was a substantial jump in elasticity of employment from 0.15 in the period 1993-94 to 1999-00 to 0.48 in the period from 1999-00 to 2004-05.

* Agriculture accounted for a large percentage of this increased employment.

* A significant increase in employment has also taken place in the informal sector where generally the level of wages is low and the working conditions poor. This has implications for the quality of employment.

The NSSO 61st round has rich cross sectional data that can be used to analyse the growth-employment linkage. We use it to study 14 major states (which cover 90% of the population).

The first half of the current decade (1999-00 to 2004-05) found most states in our analysis performed well in terms of SDP growth. Six states (AP, Gujarat, Haryana, Karnataka, Kerala and West Bengal) had a growth rate higher than the all-India average of 6.01%. Among other states, except for MP and Punjab, all had managed growth rates between 4 and 6%.