Jobless growth

Updated: Aug 31 2006, 05:30am hrs
Despite the rapid growth of the Indian economy since the 1990s reforms, the widespread impression is that of its limited employment potential. Reports of jobless growth surface often, with the analysis of statistics published by the Directorate-General of Employment and Training (DGE&T) that show declining trends in organised sector employmentthe segment accounting for 7-8% of Indias workforce and where conditions of work are protected by trade unionism and worker legislationespecially while comparing the 90s to the 80s.

Professors K Sundaram and Suresh Tendulkar of the Delhi School of Economics, however, question this perception of jobless growth in a recent paper presented at a conference on labour and employment issues organised by the Institute of Human Development in New Delhi. For starters, they note that DGE&T data suffer from under-reporting, an apprehension vindicated by comparison with the National Sample Survey Organisation (NSSO) data that shows a much higher level of organised sector employment than the DGE&T as on 31st March 2000.

Unfortunately, trends over time cant be established as the NSSO collected this sort of information for the first time in 1999-2000. However, with the same data set, Sundaram in an earlier paper in 2004 observed that close to 88% of organised non-agricultural workers reported their status as regular wage and salary earners. Accordingly, the authors argue that such workers possibly provide a better proxy for organised sector employment and possibly a better alternative to the sole reliance on DGE&T data.

The NSSO data for 1983, 1993-94 and 1999-2000 shows acceleration in the growth of regular wage and salary earners especially during the 90s. Restricting the focus to urban India, for instance, the average annual increments of such workers exceeded a million between 1993-94 and 1999-2000 when compared to the 80s. Urban self-employed workers too registered higher numbers while the average annual increments for casual workers declined.

The share of regular wage and salary earners in the incremental urban workforce thus rose to 44.8% during the 90s as against 38.62% in the 80s, while the corresponding shares of casual wage earners and the self employed declined. As regular wage and salary earners are typically associated with relatively higher productivity activities arising from either higher skills or education, their rapidly rising importance in the Indian economy contradicts the dominant impression of jobless growth and clearly points to an improvement in the employment situation in the 90s over the 80s.