Rural Employment in the 1990s

When the first results of the 55^th Round of the National Sample Survey were released, it was already apparent that there had been some major shifts in patterns of employment, especially in the rural areas. The 55^th Round indicated a substantial decline in the share of agriculture and a rise in the share of non-agriculture in employment. In itself this could be a positive sign of progress and diversification, but it was associated with a fairly large drop in work participation rates of both men and women, which indicated a deceleration in aggregate employment growth.
 
Such a deceleration has now been confirmed by the 2001 Census. When the estimated population is used to estimate the total number of those in some form of employment in 1999-2000, it yields results which show an even sharper drop in the rate of growth of rural employment generation than was previously supposed, although the fall in urban employment growth is less severe. This is shown in Chart 1, which show the annual rates of employment growth based on NSS and Census data combined, from 1983 onwards.
 
Chart 1 describes an average annual rate of growth of aggregate rural employment growth of only 0.58 per cent over the period between 1993-94 and 1999-2000. This makes it not only as low as around one-fourth of the previous period’s rate, but also the lowest such rate of increase observed since the NSS first began recording employment data in the 1950s.
Chart 1 >>
 
However, despite what appears to be a very disturbing picture in terms of rural employment growth, there are those who have argued that the 55^th Round data actually reflects many positive features and that the slowdown in employment growth is not really cause for concern. This argument is based on two points : the rise in the number of those in education, and the increase in non-agricultural employment.
 
Thus, it is argued that the fall in work participation for both males and females actually reflects a large increase in the number of those who would earlier have been in the work force and are now in full time education, especially in the age group 15 to 19 years. The increase in education is in any case a very welcome sign, and if it explained all of the decline in work force participation, then it would clearly be even more cause for celebration.
 
Similarly, non-agricultural work has increased not only relative to those in employment, but also as a proportion of population compared to the last large sample of the NSS in 1993-94. There has been an argument that such an increase generally reflects a process of diversification of employment which is a necessary and desirable feature of development, rather than a distress sign of inadequate employment generation within agriculture. There are others who have seen it as the result of public expenditure patterns which generate non-agricultural employment in particular periods. But of course interpreting this movement requires more analysis of the context in which it is occurring.
 
To understand how these features can be best be understood in the context of the 55^th Round evidence, it is probably necessary to take a slightly longer term view as well as to examine the actual patterns in employment more closely.  Chart 2 provides evidence on the type of employment (regular, casual or self employed) of rural males according to the various NSS Rounds since the 38^th Round of 1983-84, while Chart 3 gives the same information for rural females.
Chart 2 >>
 
For males, it is evident that the long term tendency for the gradual decline in self-employment and the increase in casual employment grew especially marked over the most recent period, that is the late 1990s. But self employment still dominates in the aggregate, accounting for around 55 per cent of total employment. Regular employment appears to have stabilised at a rather low proportion of the rural male workforce of around 7-8 per cent, after falling from around 9-10 per cent in the mid 1980s.
 
For rural females, the type of employment seems to fluctuate much more substantially, with no clear trend over the period as a whole. In the 1990s, there appears to have been an increase in self-employment. Of course, this may reflect factors such as greater recognition of women’s work within the household and the effect of probing questions and enhanced sensitivity among the enumerators. But it may also reflect the decline in casual work, as indicated by the chart.