Vidyasagar University Journal of Economics, Vol.

XVI, 2011-12 ISSN – 0975-8003

Trends of Rural Employment in India:

Reflections from Recent NSS Data

Pinaki Das#9
Assistant Professor of Economics, Vidyasagar University, Midnapur, West Bengal

Abstract

The employment scenario of India during recent years has not been encouraging. There
has been a decline in employment in the rural areas, led by a sharp fall in the employment
of rural females. After economic slowdown of 2008 the female work participation in India
declined in 2009-10 and reached all time low. There has been a reduction of rural female
workforce in India to the extent of 19.5 million during 2004-05 to 2009-10. The entire fall
of female employment has been due to the loss of female self-employment. In contrast, for
rural male, employment increased by 13 million due to the increase of casual employment.
Non-farm sector is the only avenue for rural workers where employment has increased
gradually. The growth rate of non-farm employment improved for both rural male and
female during 1993-94 to 2004-05 as compared with pre-reform period. But that growth
has decelerated after economic slow down; for rural female it has negative in all sectors
except construction. For rural male most of the incremental workers were also absorbed in
construction. The manufacturing sector, the most important absorber of rural workers, has
experienced substantial loss of jobs.

Key Words: Economic reforms, growth of employment, structural change, non-farm

employment, economic slowdown, job loss

JEL Classification: J21

I. Introduction
The perception is that a rise in the rate of growth of output unless accompanied by a still greater
rise in the rate of growth of labour productivity will necessarily raise the rate of growth of
employment (Kaldor, 1966). When this perception is put together with another, quite plausible,
perception, namely that in a situation where the unemployment rate exceeds a certain threshold
rate, real wages remain tied to a certain subsistence level, so that all gains in labour productivity
accrue to the capitalists. This leads to raise the share of surplus in output, and with it the savings
ratio in the economy. The rise in the savings ratio, since the capital-output ratio can be taken to be
a constant, raises the growth rate. This, in turn, raises the rate of growth of employment. Since the
rate of growth of the workforce is given, this continuous increase in the share of surplus and hence
in the growth rate of output and employment must eventually lower the unemployment rate and
keep doing so until tightness develops in the labour market and wages start rising above the

#
E-mail: [email protected]
 Trends of Rural Employment in India: Das

subsistence level. But the entire reasoning has been shown to be untenable in practice. In India
despite high growth being maintained for years there is no sign of any tightness in the labour
market and the labour market has continued to remain slack (Patnaik, 2011).
During the liberalized era the dualism in the labour market is getting further sharpened in
India. A market for educated, trained and skilled job aspirants, typically characterized by new and
upcoming production/marketing/management standards, significantly higher levels of
productivity, wage rates and earnings, etc., is steadily expanding simultaneously with sluggishness
or a steady decline in the job market for their less educated, semi- or un-skilled and untrained
brethren. Employment prospects are thus getting brightened up for the more qualified while a
squeezing scenario sets in for the untrained between self-employment and wage-paid jobs, and still
more significantly between rural and urban areas (Chadha, 2001). Rural job aspirants, especially
females among them, suffer far more severe setbacks, primarily because of their own educational
and skill deficiencies. Further it has also been argued that the changes associated with reforms –
technological changes, industrial relocation and the shift from subsistence production to market
orientation have unleashed forces that have pushed women to a marginalised and discriminated
position in the labour market (Neetha, 2009). In this context, the effect on rural female
employment- be it feminisation, marginalisation, exclusion or segregation- has acquired central
importance in all major discourses around economic reforms all over the world.
Against this brief background the present paper seeks to examine the magnitude, pattern and
structure of rural employment in India during last three decades which would help understand the
trends of rural employment.
In the present study, NSS data are used for seven points of time- 38th round (1983), 43rd round
(1987-88), 50th round (1993-94), 55th round (1999-2000), 61st round (2004-05) and the latest being
the 66th round survey conducted in 2009-10. All are the quinquennial round of NSSO. Our
analysis uses the usual status employment and unemployment data of NSSO. In the case of usually
employed, the information was collected for both principal status (ps) and subsidiary status (ss)
workers. It is to be mentioned here that in NSS 38th and 43rd rounds the industry classification
followed (National Industrial Classification) NIC 1970 while NSS 50th round used NIC 1987. In
the 55th and 61st round survey, the industry classification followed NIC 1998. In latest round i.e.,
in 66th round it followed NIC 2004. The inter-rounds 38th to 66th data are comparable by making
adjustment into eight industry division-i) agriculture, ii) mining and quarrying, iii) manufacturing,
iv) electricity, gas and water, v) construction, vi) trade and commerce, vii) transport, storage and
communications and viii) 'other services'. It is noted that the categories (ii) to (viii) are treated as
non-farm sector and the corresponding employment are non-farm employment. The employment
of rural workers in non-farm sector is treated as the rural non-farm employment.1 The labour force
indicators derived from the different NSS employment and unemployment surveys are generally
presented as ratios. Absolute number of workers was estimated by using Census segment-wise
population (male, female, rural and urban) projections and NSS segment-wise workers population
ratio. Accordingly, we computed afresh the absolute number of workers for 1983, 1987-88, 1993-
94 and 1999-2000. In 66th round NSSO itself estimated the absolute number of workers for the
year 2004-05 and 2009-10 by using the same methodology.2 To see through pre- and post-reform
contrasts in employment growth and structure, we use the NSS data for the years 1983, 1993-94,
2004-05 and 2009-10. The period 1983 to 1993-94 stand in pre-reform years while the period
1993-94 to 2004-05 captures the impact of economic reforms. The global slowdown 2008 has its
adverse implications on the domestic economy especially on the employment sphere. Therefore,
the period 2004-05 to 2009-10 is expected to captures the changes brought about by economic

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slowdown and treated as the period of economic slow down. That is, the entire post-reform period
is divided into two sub-periods, 1993-94 to 2004-05 for first and 2004-05 to 2009-10 for second. 3
The rest of the paper is divided into seven sections. Section II analyses the trend of rural
employment through an assessment of work participation rate, magnitude and nature of
employment as well as unemployment. Section III discusses the trend of farm via-a-vis non-farm
employment. The dynamics of growth of employment for rural male as well as female across
activities are dealt with in Section IV. Sections V deals with the trend of the share of employment
by sector and makes a comparison between pre- and post- reform years. Section VI looks into the
contrasting sectoral deployment of the incremental non-farm workforce during the period of
economic slowdown with the earlier periods. The factors that explained the recent trends of rural
employment are discussed in Section VII. Finally, section VIII gives some concluding
observations.

II. Emerging Trends of Employment in Rural India

We examine here of the trends of work participation rate (WPR), magnitude of employment, status
of the employment, and unemployment in rural India in comparison with urban India. Main
highlights in this section are as follows.

A. Disturbing Female Work Participation Rate

The trend of male and female WPR4 in rural and urban India separately has shown in Figure 1. It
is seen that more than half of all rural males reported themselves as workers. The male WPR in
rural India was 54.7 per cent in 2009-10. It has fluctuated in a narrow range (53.1 per cent and
55.3 per cent) during 1983 and 2009-10. There has been no sign of decline of male WPR during
the recent years. While the workforce participation rates for females are significantly lower than
those of males. Rural female WPR declined from 34.0 per cent in 1983 to 29.9 per cent in 1999-
2000 and thereafter the participation rate increased to 31.7 per cent in 2004-05. It may be recalled
that a sharp slump in female work participation rates and a decline in the share of women in total
employment had appeared as a major feature of the first decade of ‘economic reforms’ in India.
The evidence of the 1999-2000 survey had pointed to displacement of women from employment
across the 1990s, denying the then widely accepted argument that liberalization and globalization
leads to feminization of labour (Mazumdar and Neetha, 2011). And it is argued that the infirmities
are far more pronounced in the case of rural female workers, because they have not only compete
with their male counterparts in the rural areas but also with their more qualified sisters in the urban
areas (Chadha, 2002).

In 2004-05, the 61st round survey appeared to alleviate the gloomy picture by showing a
seeming ‘revival’ in women’s work participation in rural as well as in urban India. The female
WPR declined again in 2009-10. But this decline is significant and reaches all time low. For
example, the WPR has fallen to 26.1 per cent for rural female and to 13.8 per cent for urban
female. However, the male counterpart have not experienced such fall of WPR. Therefore, it is to
note that the female WPR has shown disturbing signals in general during the recent years.

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 Trends of Rural Employment in India: Das

Figure 1 Trend of WPR in India by Sex and Region, 1983 to 2009-10

60
50
PercentageShare

40
30
20
10
0
1983 198788 199394 199900 200405 200910
RuralMale 54.7 53.9 55.3 53.1 54.6 54.7
RuralFemale 34 32.3 32.8 29.9 32.7 26.1
UrbanMale 51.2 50.6 52.1 51.8 54.9 54.3
UrbanFemale 15.1 15.2 15.5 13.9 16.6 13.8

RuralMale RuralFemale UrbanMale UrbanFemale

Note: Both principal status and subsidiary status workers taken together.
Sources: NSSO, Employment and Unemployment (Situation) in India; NSS 38th Round (1983), NSS 43rd
Round (1987-88), NSS 50th Round (1993-94), NSS 55th Round (1999-2000), NSS 61st Round (2004-
05), NSS 66th Round (2009-10).

B. Differential Trend of Male and Female Employment

Number of workers gradually increased during 1983 to 2004-05 for all segments in India, across
region as well as across sex, although the growth of employment is decelerating for both male and
female (Figure 2 and Table 1). But between 2004-05 and 2009-10, there has been hardly any
change in the size of the workforce in the country. There has been a decline in employment in the
rural areas led by a sharp fall in the employment of rural females. It has also been noticed that
there has been marginal increase in urban employment mainly due to an increase in male
employment, while female employment has come down. On one hand there has been an increase
in the male employment by 22.4 million between 2004-05 and2009-10 and on the other there has
been a reduction in the female employment by 21.3 million. In total there has been an increase in
employment of 1.1 million in the country. In rural India an increase of 13 million male
employments along with a fall of 19.5 million female employments caused for over all decline of
6.5 million rural employments. This is the first time the Indian economy has perceived the decline
of the number of female workers in contrast with the increase in their male counterpart. The
decline of female workers was sharper in rural areas with compound annual growth rate -3.4 per
cent in comparison to -1.5 per cent in urban areas.

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Figure 2 Trend of Estimated Employment (in Million) in India by Sex and Region,
1983 to 2009-10
RuralMale RuralFemale UrbanMale UrbanFemale
250.0
Number (in Million)

200.0
150.0
100.0

50.0
0.0
1983 198788 199394 199900 200405 200910
RuralMale 155.1 164.0 187.8 199.3 218.9 231.9
RuralFemale 88.3 92.4 105.5 107.1 124.0 104.5
UrbanMale 46.6 52.9 64.6 76.4 90.4 99.8
UrbanFemale 12.2 14.1 17.2 18.8 24.6 22.8

Note: 1. Workforce figures have been calculated using Census segment wise population projections and NSS
segment wise Worker Population Ratios.
2. Both principal status and subsidiary status workers taken together.
Sources: As in Figure 1.

Table 1 Compound Annual Growth Rate of Workers in India by Sex and by Region

Rural Urban All

Period
Male Female Male Female Male Female
1983 to 1993-94 1.9 1.8 3.3 3.5 2.3 2.0
1993-94 to 2004-05 1.4 1.5 3.1 3.3 1.9 1.8
2004-05 to 2009-10 1.2 -3.4 2.0 -1.5 1.4 -3.0
Source: Calculation is based on number of workers given in Figure 2.

C. Casualisation of Rural Workers

The 61st round National Sample Survey 2004-05 shows a revival in women’s work participation,
albeit primarily driven by an increase in self employment. Further analysis had highlighted a sharp
rise in unpaid labour by women as a sub-category of the self-employed. Further, where the 2004-
05 aggregate data on work participation rates appeared to be giving the impression of more
women finding jobs or employment, the disaggregated data on employment status suggested a
process of large scale substitution of paid work by unpaid labour of women (Mazumdar & Neetha,
2011). The general increases in work participation rates of 2004-05 were also countered by the
argument that a real difficulty in finding paid work or wage work was the real reason for the
significant increase in self- employment among both male and female workers (Ghosh, 2009).

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Whatever may be the reason during 1999-2000 to 2004-05, what was important was that the
proportion of self-employment grew significantly with a fall in casual employment and a marginal
rise in regular-salaried employment. Number of self-employment has also increased in female as
well as male workers though the increase in 2004-05 has been significantly higher for female than
that of male. During 2004-05 to 2009-10 the trend was different from

Table 2 Distribution of Workers by Status of Employment in India, 1983 to 2009-2010

Number of Workers(in Million) Percentage Share
Employment
Rural Urban Rural Urban
Status &
Year Male Female Male Female Male Female Male Female
Self-employed
1983 93.8 54.7 19.1 5.6 60.5 61.9 40.9 45.8
1987-88 96.1 56.2 22.1 6.6 58.6 60.8 41.7 47.1
1993-94 108.7 61.7 26.9 7.8 57.9 58.5 41.7 45.4
1999-00 109.6 61.4 31.7 8.5 55 57.3 41.5 45.3
2004-05 127.2 79.0 40.5 11.7 58.1 63.7 44.8 47.7
2009-10 124.1 58.2 41.0 9.4 53.5 55.7 41.1 41.1
Regular employees
1983 16.0 2.5 20.4 3.1 10.3 2.8 43.7 25.8
1987-88 16.4 3.4 23.1 3.9 10 3.7 43.7 27.5
1993-94 15.6 3.0 27.2 4.9 8.3 2.8 42.1 28.6
1999-00 17.5 3.3 31.9 6.3 8.8 3.1 41.7 33.3
2004-05 19.7 4.6 36.7 8.8 9 3.7 40.6 35.6
2009-10 19.7 4.6 41.8 9.0 8.5 4.4 41.9 39.3
Casual labour
1983 45.3 31.2 7.2 3.5 29.2 35.3 15.4 28.4
1987-88 51.5 32.8 7.7 3.6 31.4 35.5 14.6 25.4
1993-94 63.5 40.8 10.5 4.5 33.8 38.7 16.2 26.2
1999-00 72.1 42.4 12.8 4.0 36.2 39.6 16.8 21.4
2004-05 72.0 40.4 13.2 4.1 32.9 32.6 14.6 16.7
2009-10 88.1 41.7 17.0 4.5 38 39.9 17 19.6

Notes and Sources: As in Figure 2.

that during the earlier period. The proportion of self-employment has decreased, and it is lowest
proportion for all workers since 1993-94. The decline of self-employment is the highest for
females as compared with males. During 2004-05 to 2009-10 entire fall of female employment has
been due to the fall of self-employment. For example, rural female self-employment has declined
at the extent of 20.8 million that leads to total fall of 19.5 million female workers. For regular
salaried workers, there has been a marginal increase for both female and male. On the other, the

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increase of casual workers has been witnessed in all segments; the increase has been significant
for rural male. The entire increase of employment for rural male has been due to the increase of
casual employment and it increased by 16.1 million during 2004-05 to 2009-10. The proportion of
causal labour has also been increased for both rural male and female and reaches all time high in
2009-10 (Table 2). Therefore, in respect of the status of the rural workers, a sharp casualisation
has been noticed during the recent years.

D. Marginalization and of Rural Workers

Now we look at the trend of marginal (subsidiary)5 employment for rural male and female. The
process of marginalization is analysed by the trend of the percentage of marginal (subsidiary)
employment to total employment. Table 3 provides data in respect of principle status and
subsidiary states employment. The share of marginal employment to total (ps+ss) employment for
rural male has relatively low and it has shown a downward trend. That share declined from 4.42
per cent in 1983 to 1.80 per cent in 2009-10. Thus the increased participation of rural male is
largely accounted by the increase in male workers in principle category. But for females the share
of marginal employment has substantially high as compared with males. And it has fluctuated
between 41.24 per cent and 28.69 per cent during 1983 and 2009-10. The increased participation
of women (as explained before) in rural areas is largely accounted by the increase in women
workers in subsidiary category. During the recent years, i.e., during 2004-05 and 2009-10 the
principal status as well as subsidiary status work having lost ground, it appears that relatively
more durable work as well as shorter bursts of temporary employment has become less available
to women. Thus it is apparent for rural male workers that there has no evidence of maginalisation.
For rural female a significant employment has marginal in nature.

Table 3 Number of PS and SS Workers and Percentage Share of SS Workers by Sex, 1983 to
2009-10
Number of Workers (in Million)
Percentage Share of SS workers
Year Male Female to Total Workers (PS+SS)
PS SS PS SS Male Female

1983 148.5 6.6 66.1 22.2 4.42 33.62

1987-88 158.1 5.9 70.6 21.8 3.73 30.90

1993-94 182.7 5.1 74.7 30.8 2.77 41.24

1999-00 195.2 4.1 81.7 25.4 2.10 31.12

2004-05 214.3 4.6 91.6 32.4 2.15 35.37

2009-10 227.8 4.1 81.2 23.3 1.80 28.69

Note: PS = principal status and SS = subsidiary status workers.
Sources: As in Figure 1.

E. Trend of Rural Unemployment

As far as unemployment rate6 is concerned, during the post-reform period, the trend is clearly
rising unemployment rate (up to the year 2004-05) both by usual (ps+ss) and daily status for both

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rural male and rural female, although faster by daily status and for female. The unemployment rate
decreased in 2009-10 compared to 2004-05 in all sphere, though the decline has marginal for rural
workers. During 2004-05 to 2009-10 the number of unemployment for rural female also declined–
0.7 million in usual status and 2.0 million in daily status (Table 4). This trend seems to be
paradoxical, because number of rural female employment declined at the tune of 21.3 million
during the same period. The decrease in unemployment, however, was not an increase in
employment, rather it is a result of a decrease in the number of women offering themselves for
work. The issue is discussed in little latter. Now we move to analyse the trends of rural
employment by sectors.

Table 4 Unemployment Rate and Number of Unemployment in Rural India by Sex, 1983 to
2009-10
Unemployment Rate Number of Unemployment (in Million)
Male Female Male Female
Year PS+SS CDS PS+SS CDS PS+SS CDS PS+SS CDS
1983 1.4 7.5 0.7 9.0 2.3 11.0 0.5 5.3
1987-88 1.8 4.6 2.4 6.7 3.1 7.3 2.3 4.3
1993-94 1.4 5.6 0.9 5.6 2.7 10.2 1.0 4.2
1999-00 1.7 7.2 1.0 7.0 3.4 13.8 1.1 5.3
2004-05 1.6 8.0 1.8 8.7 3.6 16.8 2.3 8.0
2009-10 1.6 6.4 1.6 8.0 3.8 14.9 1.6 6.0

Note: PS = Principal Status and SS = Subsidiary Status, CDS = Current Daily Status.
Sources: As in Figure 1.

III. Trend of Farm vis-à-vis Non-Farm Employment

Total workers are segregated into farm workers and non-farm workers and the estimated workers
of these two categories for male and female in rural, urban and all India are given in Table 5. At
all India level during the last three decades starting with 1983, the absolute number of male
workers gradually increased in both farm and non-farm sectors. Non-farm employment gradually
and substantially increased and during the recent years it has out numbered as compared with the
farm employment for male. While in case of females the farm employment has declined in the
recent NSSO round 2009-10 and it reaches all time low during the post-reform years. Whereas
female non-farm employment gradually increased though the rate of expansion is relatively low.
For female, farm employment has out numbered as compared with non-farm employment but it
has not increased gradually, rather there have been ups and down turns across the year. The
reduction in the overall female workforce by 21.3 million between 2004-05 and 2009-10 has came
from a fall of 21.6 million from the farm with a marginal rise of 0.3 million from non-farm sector.
As we note before, the female self-employment has also declined 23.1 million during the same
period. Now there is no doubt that the entire fall of farm employment has been due to the loss of
female self-employment.7 In their male counterpart the numbers of employment in farm as well as
non-farm sector have been increasing over time during entire period.

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Vidyasagar University Journal of Economics Vol. XVI, 2011-12

Table 5 Number (in Million) of Farm and Non-Farm Workers in India by Sex and Region,
1983 to 2009-10
Sector and
1983 1987-88 1993-94 1999-2000 2004-05 2009-10
Sex
Male Rural India
Farm 120.8 122.2 139.2 142.3 145.6 145.6
Non-Farm 34.3 41.8 48.6 57.0 73.3 86.3
Female
Farm 76.6 78.3 90.9 91.5 103.2 82.9
Non-Farm 11.7 14.1 14.6 15.6 20.8 21.6
Male Urban India
Farm 4.8 4.8 5.8 5.0 5.5 6.0
Non-Farm 41.8 48.1 58.8 71.4 84.9 93.8
Female
Farm 3.8 4.1 4.2 3.3 4.5 3.2
Non-Farm 8.4 10.0 13.0 15.5 20.1 19.6
Male All India
Farm 125.6 127.0 145.0 147.3 151.1 151.6
Non-Farm 76.1 89.9 107.4 128.4 158.2 180.1
Female
Farm 80.4 82.4 95.2 94.8 107.6 86.0
Non-Farm 20.1 24.1 27.5 31.1 41.0 41.3

Notes: 1. Workforce figures have been calculated using Census segment-wise population projections and
NSS Segment-wise Worker Population Ratios.
2. Both principal status and subsidiary status workers taken together.
3. Compound Annual Growth Rate is calculated.
Sources: As in Figure 1.

In both rural and urban India the trend of farm and non-farm employment for male is quite
same as it has witnessed at the all India level. The contrasting feature is that in rural India farm
employment has out numbered than non-farm employment. In the latest year (i.e., in 2009-10) the
number of male employment was 145.6 million in farm sector and 86.3 million in non-farm sector.
For female the number of employment in non-farm sector gradually increased from 11.7 million in
1983 to 21.6 million in 2009-10. They have also greater participated in farm sector and their
numbers had been increasing from 76.6 million in1983 to 103.2 million in 2004-05 and thereafter
there was a sharp decline. During 2004-05 to 2009-10 the female workers declined to the tune of
20.3 million in farm sector of rural India. During the same time the urban female employment
declined marginally (1.3 million in farm and 0.5 million in non-farm). What was important was
that the fall of 21.3 million female employments has been mainly the fall of employment in rural
farm sector.

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IV. Growth of Employment in Rural Areas by Sectors

The proponents of economic reforms would make us believe that employment was expected to
pick up primarily because the output growth was likely to pick up after economic reforms took
roots. These reforms may lead to increase in installing a more capital intensive technology in
many branches of production, which make many believe that employment would not grow in the
same proportion in which output would grow. Since technological changes are likely to come
about only in selected production sectors, and labour-intensive technologies are likely to dominate
in many others, a mixed overall picture on employment growth was likely to emerge for some
years after the arrival of the reforms.
Highly disparate trends that are discernible for employment growth of male and female during
1983 to 1993-94, 1993-94 to 2004-05, and 2004-05 to 2009-10 in various sectors of the rural (and
urban) economy (as shown in Table 6a and 6b) are explained as follows: Firstly, the growth rate of
rural female employment in non-farm sector was higher during the post-reform period than that
during the pre-reform period. It was 2.2 per cent per annum during 1983 to 1993-94 and 3.3 per
cent during 1993-94 to 2004-05. Growth rate of rural male non-farm employment has also
improved during the latter period. The growth rate of female RNFE was also higher than that of
male during the post-reform period. During the period of economic slow down, i.e., during 2004-
05 to 2009-10, the growth rates of employment declined in all segments, irrespective of region and
sex.

Table 6a Growth Rate of Employment by Sex in Rural India, 1983 to 2009-10

Male Female
1983/ 1993-94/ 2004-05/ 1983/ 1993-94/ 2004-05/
Sector
1993-94 2004-05 2009-10 1993-94 2004-05 2009-10
1. Farm (Primary) 1.4 0.4 0.0 1.7 1.2 -4.3
2. Mining & Quarrying 1.9 0.0 7.2 4.8 -1.1 -3.4
3. Manufacturing 1.6 2.5 -1.3 1.9 3.2 -5.5
4. Electricity-Gas-Water 6.1 -2.3 1.2 N N N
5. Construction 4.1 8.6 12.0 1.8 6.3 23.9
Secondary (2-5) 2.4 4.4 5.7 2.0 3.3 1.4
6.Trade-Commerce 4.2 5.3 0.9 2.3 3.1 -1.1
7.Transport-Storage
4.0 6.6 2.7 1.8 8.1 -3.4
Communication
8.Other Services 2.6 0.4 0.1 2.8 3.0 0.3
Tertiary (6-8) 4.6 3.3 1.0 2.6 3.2 -0.3
Non-Farm (2-8) 3.6 3.8 3.3 2.2 3.3 0.8
Total (1-8) 1.9 1.4 1.2 1.8 1.5 -3.4

Notes & Sources: As in Table 5 (Compound annual growth rate is calculated)

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Vidyasagar University Journal of Economics Vol. XVI, 2011-12

Table 6b Growth Rate of Employment by Sex in Urban India, 1983 to 2009-10

Male Female
1983/ 1993-94/ 2004-05/ 1983/ 1993-94/ 2004-05/
Sector
1993-94 2004-05 2009-10 1993-94 2004-05 2009-10
1. Farm (Primary) 1.9 -0.5 1.7 1.0 0.5 -6.6
2. Mining& Quarrying 4.2 -0.3 -3.0 3.5 -6.5 6.8
3. Manufacturing 2.0 3.1 0.5 2.4 4.8 -1.7
4. Electricity-Gas-Water 4.2 -0.6 -0.7 7.8 -0.4 13.1
5. Construction 6.1 5.8 6.5 6.4 2.6 2.8
Secondary (2-5) 2.9 3.5 2.1 3.0 4.3 -1.0
6. Trade-Commerce 4.0 5.4 1.3 4.0 5.2 -1.7
7. Transport-Storage
3.2 3.9 1.4 2.0 4.0 -1.5
Communication
8. Other Services 4.0 0.9 3.1 6.2 3.5 0.3
Tertiary (6-8) 3.8 3.3 2.0 5.6 3.9 -0.2
Non-Farm (2-8) 3.5 3.4 2.0 4.5 4.1 -0.5
Total (1-8) 3.3 3.1 2.0 3.5 3.3 -1.5
Notes & Sources: As in Table 3

Secondly, for both rural male and rural female workers construction, manufacturing, transport-
storage-communication and trade-commerce were clearly cheering spots, while agriculture,
mining, utilities (electricity-gas-water) and other services showed negative growth or slow-down
in employment during 1993-94 to 2004-05 over 1983 to 1993-94. But during the period of
economic slow down the growth of male employment was deteriorated in most of sectors. For
female the growth rate was negative in all sectors except construction.
Thirdly, growth rate of employment in the construction sector for rural female increased from 1.8
per cent per annum during pre-reform period to 6.3 per cent during the post-reform period, it again
substantially increased to 23.9 per cent per annum during 2004-05 and 2009-10. The growth of
construction sector has been highest among all other sectors for both male and female. But it has
been relatively low for urban female during two post-reform periods. The benefits of improved
employment growth rate in the construction sector are duly shared, albeit unevenly, by female and
male workers, primarily because of the convenient locale of the construction activities.8
Fourthly, the benefit of improved employment growth rate during the first sub-period of post-
reform years (i.e., 1993-94 to 2004-05) has also been witnessed in manufacturing sector for both
rural male and female. For male (female) that growth steeply declined to -1.8 (-5.5) per cent
during 2004-05 to 2009-10 from 2.5 (3.2) per cent during 1993-94 to 2004-05. Trend was similar
for urban males and females. Among other two activities of the secondary sector, namely
electricity-gas-water and mining & quarrying, for rural female, the first one has negligible (N)
employment and the second one has witnessed a decline of employment. For rural male, in
contrast, the growth rate has improved in both the sectors. As a whole the rural secondary sector

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has positive growth rates during two post-reform periods, though the growth has expanded for
male and decelerated for female. During the period of economic slow down the expansion of rural
female employment in construction has outnumbered the fall of employment in minning &
quarrying and manufacturing. The resultant outcome is the positive growth rate of the secondary
sector. But the trend reversed for urban female and growth of secondary sector as a whole was
negative during 2004-05 and 2009-10.
Fifthly, while employment for both rural male and female workers in the transport-storage-
communication sector increased sizably during 1993-94 to 2004-05, after that it witnessed a steep
decline for male and became negative for female. The fast pace of expansion that this sector has
witnessed has generally been more conducive to male job seekers, partly because of the physical
labour involved and partly because of the shifting locale of the underlying activities. The growth
of rural male as well as female employment in trade-commerce and other services increased
during 1993-94 to 2004-05 and deteriorated thereafter. On the whole, the growth of employment
in tertiary sector for rural female became negative during 2004-05 and 2009-10. The same story
unfolds itself for urban female. The growth of tertiary sector has deteriorated for male though it
was still positive in rural as well as urban areas.

V. Trends of Sectoral Distribution of Rural Employment

The percentage share of employment in different sectors to total rural employment helps us
identify the relative importance of different activities. Table 7a and Table 7b, based on usual status
NSS estimates give a 30-year long history of sectoral distribution of rural male and female
workers. Analysis of the data by sector in terms of the percentage share reveals the following
trends: First, in rural India, the proportion of male workers engaged in primary sector has been
steadily declining from 77.9 per cent in 1983 to 62.8 per cent in 2009-10. On the other hand, the
proportion of employment in the secondary, tertiary and total non-farm sectors has witnessed a
steady increase. This uninterrupted trend of development has also been witnessed in their female
counterparts as well as in both sexes of urban India. The share of rural female employment in the
non-farm sector gradually increased from 13.3 per cent in 1983 to 16.8 per cent in 2004-05 and
further to 20.7 per cent in 2009-10. Though agriculture is the main stay of employment for rural
female and about 80 per cent of rural female are engaged in farm sector, the share of non-farm
employment was relatively high for their male counterpart and substantially high for both male
and female in urban India.
Second, the share of rural secondary employment to total rural employment for males increased
from 10.7 per cent in 1983 to 19.3 per cent in 2009-10. For females the share was relatively low,
and it also expanded from 8.2 per cent to 13.0 per cent during the same period. The expansion of
the secondary employment was relatively high during the two sub-periods of post-reform years for
both male and female. The share of employment of the tertiary sector to total rural male
employment was 11.4 in 1983, which also increased to 19.3 in 2009-10. For rural females, on the
other, the share of tertiary employment was low and increased marginally from 5.1 per cent in
1983 to 7.7 per cent in 2009-10. It is evident that the share of both secondary and tertiary
employment for rural male was higher than that of rural female. Within non-farm economy higher
proportion of female workers has engaged in the secondary sector than that in the tertiary sector.
Third, the share of employment in manufacturing was highest not only within the secondary
activities but also within the overall non-farm activities for both rural male and female workers.

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That share for female was 6.9 per cent in 1983 which increased to 8.4 per cent in 2004-05 and fell
thereafter to 7.5 per cent in 2009-10. For rural male the share has also
Table 7a Distribution of Male and Female Employment by Sector in Rural India,
1983 to 2009-10
Male Female
Sector
1983 1993-94 2004-5 2009-10 1983 1993-94 2004-5 2009-10
1. Farm (Primary) 77.9 74.1 66.5 62.8 86.7 86.2 83.2 79.3
2. Mining & Quarrying 0.7 0.7 0.6 0.8 0.3 0.4 0.3 0.3
3. Manufacturing 7.2 7 7.9 7 6.9 7.0 8.4 7.5
4. Electricity-Gas-Water 0.2 0.3 0.2 0.2 0 0.1 0 0
5. Construction 2.6 3.2 6.8 11.3 0.9 0.9 1.5 5.2
Secondary (2-5) 10.7 11.2 15.5 19.3 8.2 8.4 10.2 13
6.Trade-Commerce 4.4 5.5 8.3 8.2 2 2.1 2.5 2.8
7.Transport-Storage
1.8 2.2 3.8 4.1 0.1 0.1 0.2 0.2
Communication
8.Other Services 6.2 6.6 5.9 5.6 3 3.3 3.9 4.7
Tertiary (6-8) 11.4 14.7 18 17.9 5.1 5.5 6.6 7.7
Non-Farm (2-8) 22.1 25.9 33.5 37.2 13.3 13.8 16.8 20.7
Total (1-8) 100 100 100 100 100 100 100 100
Note: Both principal status and subsidiary status worker were taken together.
Sources: As in Figure 1.

Table 7b Distribution of Male and Female Employment by Sector in Urban India,

1983 to 2009-10
Sector Male Female
1983 1993-94 2004-05 2009-10 1983 1993-94 2004-05 2009-10
1. Farm (Primary) 10.3 9 6.1 6 31.4 24.6 18.1 13.9
2. Mining & Quarrying 1.2 1.3 0.9 0.7 0.6 0.6 0.2 0.3
3. Manufacturing 26.8 23.5 23.5 21.8 26.7 24.1 28.2 27.9
4. Electricity-Gas-Water 1.1 1.2 0.8 0.7 0.2 0.3 0.2 0.4
5. Construction 5.3 6.9 9.2 11.4 3.1 4.1 3.8 4.7
Secondary (2-5) 34.4 32.9 34.4 34.6 30.6 29.1 32.4 33.3
6.Trade-Commerce 20.6 21.9 28 27 9.5 10 12.2 12.1
7.Transport-Storage
9.9 9.8 10.7 10.4 1.5 1.3 1.4 1.4
Communication
8.Other Services 24.8 26.4 20.8 22 27 35 35.9 39.3
Tertiary (6-8) 55.3 58.1 59.5 59.4 38 46.3 49.5 52.8
Non-Farm (2-8) 89.7 91 93.9 94 68.6 75.4 81.9 86.1
Total (1-8) 100 100 100 100 100 100 100 100
Note and Sources: As in Table 5a

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declined for male in 2009-10. It may be recalled that the manufacturing sector has been seriously
affected by the process of economic slow down of 2008 and as a result the employment has
declined for both rural male and female.
Fourth, construction, trade-commerce and transport-storage-communication were dynamic sectors
for rural male workers as the share of employment of these sectors to total rural male employment
expanded significantly. For rural female workers, construction was only the dynamic sector where
employment share increased from 0.9 per cent in 1993-94 to 5.2 per cent in 2009-10. The
expansion of the construction employment has substantially high during the recent years,
specifically during 2004-05 and 2009-10.

The following points need to be underlined to mark the pre-reform and post-reform contrast.
Firstly, the inter-sector shifts were sharper during the post-reform period than during the pre-
reform period. Whereas in nineties, there was a substantial slowdown of the process of weaning
away of rural male workers from agriculture, it was a complete halt, not a reversal, in the case of
rural female workers. This seems to be happening primarily because of the halting pace of inter-
sector shift, both into the secondary and tertiary sectors, and for both male and female workers
(Chadha 2002). Secondly, one general critic of the above argument is that it is a very short period
phenomenon. During 1993-94 to 2004-05, there was a substantial decline of the share of
employment of agriculture and consequently the share of non-farm employment increased by 7.6
percentage points for rural male workers and by 3 percentage points for rural female workers.
During the later period, i.e., during 2004-05 and 2009-10, the share of non-farm employment also
expanded about 4 percentage points for both rural male and female. Lastly, after some years of
introduction of economic reforms opportunity of construction, business and transport &
communication work is opening. These opening opportunities mainly go to male rural workers
and partly to the female counterpart. The relative incapability of rural female workers constrained
themselves for gaining access to these jobs.

VI. Incremental Rural Non-Farm Workers by Sectors

The percentage distribution of incremental rural non-farm workers (RNFW) among non-farm
sectors helps us analyze temporal change in relative importance of different non-farm activities.
The percentage distribution of incremental RNFW among different non-farm activities during the
pre-reform period (i.e. 1983 to 1993-94) and the two post-reform periods (i.e. 1993-94 to 2004-05
and 2004-05 to 2009-10) is shown in Table 8. The important points that emerged are as follows:
First, as regards incremental RNFW during the pre-reform period, i.e., 1983 to 1993-94 the
importance of secondary sector was higher than that of the tertiary sector for rural female workers.
That is, female incremental RNFW were much more absorbed in the secondary sector than in the
tertiary sector. In their male counterpart, the incremental RNFW was mainly absorbed in the
tertiary sector.
Second, during the post-reform period the incremental RNFW was more absorbed in the secondary
sector as compared to the tertiary sector for both male and female. About 60 per cent for female
and 52 per cent for male incremental workers have been absorbed in the secondary sector during
1993-94 to 2004-05. The absorption of incremental RNFW in the secondary sector significantly
increased during the later sub-period. For rural female the share was 117.2 per cent in secondary
sector and negative (-17.2 per cent) in tertiary sector. That is the new jobs have been created only
in the secondary sector along with a loss of job in the tertiary sector.

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Table 8 Distribution of Incremental Rural NFW by Sector for Male vis-à-vis Female in
India, 1983 to 2009-10
Male Female
1983/ 1993-94/ 2004-05/ 1983/ 1993-94/ 2004-05/
Sector
1993-94 2004-05 2009-10 1993-94 2004-05 2009-10
1.Mining& Quarrying 1.6 0.0 4.2 5.6 -0.8 -7.3
2.Manufacturing 13.8 16.8 -8.2 45.9 48.3 -322.5
3.Electricity-Gas-Water 1.8 -0.5 0.2 3.7 -1.7 0.0
4.Construction 13.8 35.9 87.5 5.5 14.5 447.0
Secondary (1-4) 30.9 52.2 83.7 57.6 60.4 117.2
5.Trade-Commerce 24.4 31.8 6.5 16.0 14.1 -21.8
6.Transport-Storage
9.3 17.0 9.2 0.6 2.3 -4.9
Communication
7.Other Services 19.3 2.1 0.6 29.6 21.6 9.4
Tertiary (5-7) 69.1 47.8 16.3 46.2 38.0 -17.2
Non-Farm (1-7) 100.0 100.0 100.0 100.0 100.0 100.0

Note and Sources: As in Table 5

Third, the incremental RNFW was unevenly distributed among the sectors of non-farm
activities. During pre-reform period share of incremental rural males workers was highest in
trade-commerce workers (24.4 per cent), followed by' other services' (19.3 per cent),
manufacturing and construction (13.8 per cent each). For females the share of incremental RNFW
was highest in manufacturing (45.9 per cent), followed by 'other services' (29.6 per cent) and
trade-commerce (16.0 per cent).
Fourth, during 1993-94 and 2004-05 construction and trade-commerce were impornat
absorber for rural male in contrast with manufacturing and other services for rural female. But
during 2004-05 to 2009-10 incremental male and female workers have been absorbed in
construction sector. The manufacturing sector, the most important absorber of female workers, has
experienced substantial loss of jobs for female. The same phenomena have been experienced by
rural male workers.

VII. Factors that Explain Recent Trends of Rural Employment

A number of factors explain the trend of rural employment which are now discussed.

A. Economic Slowdown

The global slowdown of 2008 has its adverse implications in most of the sectors of Indian
economy. During the last three years (prior to 2008) Indian Economy grew at an average annual
rate of 8.6 per cent. The economy has shown signs of deceleration and grew at 7.8 per cent in the
first two quarters (April-September) and 7.0 per cent in the last quarter (January-March) of 2008-
09. The service sector, is reported to be slowing down, mainly in the transport, communication,
trade, and hotels & restaurants sub-sectors. The industrial growth has decelerated sharply during
encompassing all the constituent sectors. In manufacturing sector, the growth came down to 4.0
per cent in 2008-09 as compared to 9.8 percent in the last year. It is seen that the employment
declined every month during this period Decline was prominent in exporting units as well as in
non-exporting units. The most affected sectors were Gems & Jewellery, Metals, Textiles (where
women have been working in large numbers), Transport (manufacturing), and Automobiles (Das,

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2010). The rural women who have lost their jobs perhaps could not be re-absorbed in the labour
market. Manufacturing sector has accounted a loss of employment for both rural male and rural
female; nearly three million females and one million males have loss their jobs during 2004-05
and 2009-10.

B. Decline of LFPR

It is seen that the labour force participation rate (LFPR) for rural males increased marginally in
2009-10, compared to 2004-05, while for urban males it actually declined. The most interesting
observation, however, is that there has been a drastic decline in LFPR for women workers both in
the rural and urban areas. The 66th round survey of NSSO reported that, for rural female, LFPR
declined from 33.3 per cent in 2004-05 to 26.5 per cent in 2009-10. In fact, the LFPR is the lowest
since 1993-94 for both rural and urban women. The fall in the LFPR leads to declined to the size
of the labour force. In case of rural female fall of LFPR was much higher than the fall of WPR.
The fall of female WPR indicates fall of female employment and the excessive fall of LFPR
compared with WPR indicates the fall in the female unemployment rate in 2009-10 compared with
2004-05.

C. Falling Employment Opportunity

It is seen that the LFPR for rural females has also decreased for all ages above the age of 24 (but
not in the case of the males). The decline in the LFPR for women, irrespective of age, might be
because of a decline in overall employment opportunities. In 2004-05, there had been an increase
in female LFPR, compared to earlier rounds of the NSSO survey. But subsequently, with a fall in
employment opportunities overall, these women could not find employment and withdrew from
the labour market. In this regard, social orthodoxy may have played a role in pushing out women
rather than men from the labour force.
D. Income Effect

The LFPR may also turn up/down due to purely economic reasons. The most important among
them is described as the income effect. That is, households have a certain reservation on level of
living and if income of the household falls below this, they tend to push their reserve labour force,
mainly women, children (including adolescents) and elderly into the labour force to supplement
household income. This, Tendulkar and Sundaram argue, is the main explanation for female
labour supply behaviour both in rural and urban areas. This is commonly observed in the case of a
severe calamity such as a drought and in agrarian distress. Female workforce participation rates
tend to increase in times of distress, either natural ones such as droughts or manmade such the
deceleration in the growth rates of agricultural output and wages during 1999-2000 and 2004-05.
Consequently, rural female employment phenomenally increased in 2004-05 as compared with
1999-2000. The general features of such distress employment are that along with the increase in
WPR, it is also accompanied by an increase in unemployment rate and consequently the LFPR.
This is primarily because all the women who enter the labour market may not get jobs and a small
percentage of them will also add to the pool of unemployment leading to increase in LFPR.
However, these changes are purely temporary and a recovery in economic conditions also leads to
withdrawal to the reserve household’s labour force, leading to a decline in workforce participation
rates (Himangshu, 2011). During 2004-05 to 2009-10 earnings of the rural workers have
improved. Average daily real wage rate for causal workers increased from Rs. 55.03 in 2004-05 to
Rs. 67.29 in 2009-10 for rural male and from Rs. 34.94 to Rs. 45.69 for rural female. It has also

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increased for regularized salaried person – for rural male from Rs. 144.93 to Rs. 165.13 and for
rural female from Rs. 85.53 to Rs. 103.31(Chowdhury, 2011). That is, there has been the evidence
of positive income effect that tends to pull back the distress labour force back into to non-work.
Consequently, female LFPR reduced in 2009-10 as compared with 2004-05.
E. Expansion of Education

It is, indeed, the case that more persons belonging to the age groups of 15-19 and 20-24 have
reported attending educational institutions as their usual activity in 2009-10, compared to 2004-05.
The percentage of people attending educational institutes in the age group 15-24 increased from
52.7 to 73.9 for rural male and from 35.4 to 54.6 for rural female. As more rural females were
pursuing higher education, there was a decline in LFPR for female. But rural males have not
experienced the decline in LFPR because the males from other (specifically higher) age groups
have entered in to the labor market.

F. Decline in Land-man Ratio and Tractorisation in Agriculture

During the course of economic growth more and more land has been transferred for the use of
industry or infrastructure. In India per capita net sown area as well as per capita gross cropped area
has also declined gradually. Side by side there has been the process of tractorisation (more and
more of use of machine) in Indian agriculture. All these aspects go against to the rural females
entering into the labour force. And hence 21.6 million females have loss jobs in the farm sector
during 2004-05 to 2009-10.

VIII. Conclusions
In the first five years of the present decade, the rural employment increased by 36.5 million,
whereas in the second half it decreased by 6.5 million. This decline has due to the sharp fall in the
employment of rural females. During 2004-05 to 2009-10 the over all reduction of female
workforce by 21.3 million has been mainly the fall of female self-employment. In contrast, for
rural male employment increased by 13 million and the entire increase of employment has been
due to the increased of casual employment. As unemployment rate is concerned, it has declined in
2009-10 compared to 2004-05 for both rural male and female. For rural female the decrease in
unemployment, however, as per NSS data, in not because of an increase in employment, rather it
is a result of a decrease in the number of women offering themselves for work.
For rural workers non-farm sector is the only space where employment, for both male and female,
has expanded. The growth rate of employment in non-farm sector has improved for both rural
male and female during 1993-94 to 2004-05 as compared with pre-reform period and the growth
rate for female is higher than that of male. For both rural male and rural female workers
construction, manufacturing, transport-storage-communication and trade-commerce were clearly
cheering spots, while agriculture, mining, utilities (electricity-gas-water) and other services
showed negative growth or slow-down in employment during 1993-94 to 2004-05 over 1983 to
1993-94. But during the period of economic slow down (2004-05 to 2009-10) the growth of rural
male employment was deteriorated in most of the sectors. For rural female the growth rate was
negative in all sectors except construction.
Agriculture is the main stay of employment for rural female and about 80 per cent of rural female
still engaged in the farm sector. Within rural non-farm economy relatively higher proportion of
female workers has been engaged in the secondary sector than in the tertiary sector. Construction,
trade-commerce and transport-storage-communication were dynamic sectors for rural male

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workers as the share of employment of these sectors to total rural male employment expanded
significantly. For rural female workers, construction was only the dynamic sector. Manufacturing
sector, an important absorber of rural workers, was seriously affected by the process of economic
slow down of 2008 and as a result the employment has declined for both male and female. The
inter-sector shifts were relatively sharper during the pos-reform period than during the pre-reform
period. After some years of introduction of economic reforms opportunity of expansion of
construction, business and transport & communication work is opening. These opening
opportunities mainly go to rural male workers and partly to the female counterpart. The relative
incapability of rural female workers constrained themselves for gaining access to these jobs and
increased the dependency on manufacturing and construction work.
As regards incremental rural non-farm workers during the pre-reform period the importance
of secondary sector was higher than that of the tertiary sector for rural female workers. In their
male counter part, the incremental rural non-farm workers were mainly absorbed in the tertiary
sector. During the post-reform period the incremental rural non-farm workers were more absorbed
in the secondary sector than in the tertiary sector for both male and female. For female the new
jobs have been created only in the secondary sector (particularly in construction) along with a loss
of job in the tertiary sector during 2004-05 and 2009-10. Most of the incremental male workers
were also absorbed in construction. The manufacturing sector, the most important absorber of
female workers, has experienced substantial loss of jobs for female. The same phenomena have
been experienced by rural male workers.
The expansion of education among rural youth along with economic slow down, fall of
employment opportunity, and declining labour absorption in agriculture are accounted for
reduction of labour force participation rate during recent years. And the resultant outcome is the
reduction (though it is marginal) of rural unemployment rate. But this is not encouraging. There
has been millions and millions young people putting themselves through more education in the
hope of being able to access better jobs. If this sluggish pace of job creation continues, there will
be even larger gaps between aspiration and reality in India's labour markets. The point of worry is
that when these youth offer themselves in the job market, open unemployment in the country
might increase, if the employment-generating potential of the economy remains low. That such a
combination is a recipe for enhanced social tensions and political unrest is well known and has
been reinforced by recent experience across the world. A course correction is needed.

Notes
1. All references to rural employment imply such employment for rural workers/households, not
necessarily located in the rural areas themselves (Chadah, 2001).
2. The similar methodology has also been used by a number of authors (Vasari 1995, Sundaram 2001,
Chadha, 2001).
3. The intermediate data set for 1987-88 and 1999-2000 is not used. Weather-wise, the years were not
a normal one and was likely to throw up avoidable distortions in rural employment scenario many
times more than in urban areas (Chadha, 2001), and, the pre- and post- reform periods need not be
shortened (to 1987-88/1993-94 and 1993-94/1999-2000) when data of 1983 and 2004-05 are
available.
4. Workforce participation rate (WPR) is defined as the ratio of the employed persons to total
population.
5. According to the NSSO the activity status on which a person spent relatively longer time during the
365 days preceding the date of survey is considered as the usual principal activity status (ps) of the
person. A person whose usual principal status is determined on the basis of the major time criterion

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could have pursued some economic activity for a shorter time throughout the reference year of 365
days preceding the date of survey. The status in which such economic activity is pursued was the
subsidiary economic activity status (ss). Here the subsidiary employment is treated as marginal
employment.
6. Unemployment rate is the ratio of the number of unemployed persons to total labour force
(employment and unemployed).
7. The phenomenon has been explained by the withdrawal of unpaid family helpers from the
workforce comparison with paid women workers. For detailed see Majumder & Neetha, 2011.
8. The increase of the construction employment during the post-reform periods may be explained in
terms of real estate development in urban areas and in terms of implementation of National Rural
Employment Guarantee Programme in rural areas.

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