For the urban sector the data do not throw up any surprises, since the earlier and now predictable pattern of increase in the share of tertiary employment is evident for both men and women workers.
 
However, the data that do come as a surprise, given the earlier results, relates to the information on unemployment. It would have been expected, given the fairly sharp decline in usual status employment, to find that unemployment rates had gone up commensurately. In fact, however, as Chart 6a shows, usual status unemployment has increased only marginally for rural men and women, and has actually decreased for urban men and women workers. This points to a substantial decline in labour participation rates overall.
Chart 6a >>
 
The reason for this is hard to comprehend, since it is usually typical of poor countries with low to non-existent social security benefits, that the working population cannot afford the luxury of open unemployment. Rather, they have no option but to take up some gainful activity, however low paying, simply in order to survive, and thus this usually expresses itself as underemployment. Instead of this, we find that according to the latest NSS Round, there is actually a withdrawal from the labour force, a feature which is more commonly associated with developed post-industrial economies.
 
Chart 6b, which shows unemployment rates according to the daily status definition, finds a different tendency. According to this, unemployment rates have gone up for all workers except female urban workers. While this may be closer to expectation, it does reflect a different indicator, a flow measure rather than a stock measure of the labour market conditions.
Chart 6b >>
 
What does all this add up to ? First of all, it suggests that there is a major difficulty with an economic growth process that not only does not increase the rate of employment generation, but actually brings it to a historic low. Clearly, the production restructuring that has occurred in the Indian economy has not been of a type which has created more labour-intensive productive activities, nor has there been sufficient dynamism to make the overall employment grow faster because of sheer volume increases in output.
 
This is quite contrary to the expectations that were generated at the start of the neoliberal reform process, as mentioned at the outset. But they are also at variance with the apparent increases in output growth rates. This is possible because of declining employment elasticities in production, which would in fact suggest quite the opposite type of production restructuring from that which was anticipated.
 
These data also have to viewed in conjunction with the evidence on household consumption which was also collected during the 5th Round. As is now well known, this round found substantial increases in per capita household consumption (and presumably, therefore, there would be associated declines in the incidence of absolute poverty) on the basis of using together two recall reference periods of one week and one month.
 
The implications of this have already been discussed at length in an earlier edition of Macroscan and elsewhere (see Macroscan, Businessline September 19,2000 and Abhijit Sen, "Consumer spending and its distribution : Statistical priorities after NSS 55th Round", Economic and Political Weekly December 16-22, 2000) and we do not propose to go into this matter again.
 
Suffice it to say that the evidence on employment generation - or rather, the lack of it - that emerges from these results, suggests that the basic economic problems of unemployment and low productivity unemployment not only remain unresolved, but have actually grown more acute, after a decade of marketist reforms.