More jobs in formal economy: Workforce leaving farms to join services; CEA Subramanian shares data

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Published: December 13, 2019 5:17:48 PM

Nearly 2.3 crore jobs have been generated in the organised sector by FY18, compared to FY12.

nirmala sitharaman, finance minister, FM, narendra modi government, govt economic decisions, partial credit guarantee scheme, jobs, employment, unemployment, formal jobs, informal jobs, organised sector, unorganised sector, Among the 5% labour force that left the agriculture sector, 4% joined the services sector, while the remaining 1% was absorbed by the industries.

The informal economy is gradually being absorbed into its formal counterpart as the number of salaried workers is on the rise. “There have been several measures taken over in the last five years to formalise the economy due to which the number of casual workers fell by 5 per cent, while in the exact same proportion, the number of regular workers has surged,” Krishnamurthy Subramanian, Chief Economic Adviser, Govt of India, said in a press conference. He added that in this process, nearly 2.3 crore jobs have been generated in the organised sector in FY18, compared to FY12. 

The CEA underlined that the number of people previously engaged in the agriculture sector are now moving towards services and industrial sectors. Among the 5 per cent labour force that left the agriculture sector, 4 per cent joined the services sector, while the remaining 1 per cent was absorbed by the industries. 

Workers from the unorganised sectors have also moved towards the organised sectors. 2 per cent such workers in the unorganised sector are now salaried, showed the government data. The improvement in the nature of jobs has been significantly visible in the rural areas where a larger section of workers are now engaged in a more remunerative job.   

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Meanwhile, the workforce in the informal sector accounts to 83.8 per cent of the total workforce in 2018 from 86.5 per cent in 2015, a shift of 2.7 per cent from informal to formal workforce, shows a Kantar report on ‘Impact Of Key Reforms On Job Formalization and Indian Flexi Staffing Industry 2019’. It also highlighted that the formal workforce experienced a CAGR of 10.8 per cent, with an increase of around two crore workforce in the formal sector in three years (2015-18). The report also mentioned that out of these increased formal jobs, permanent and fixed-term contracts cumulatively account for 1.3 crore jobs. 

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