Economics: Class 11 (Part 1) — Chapter 6: Employment: Growth, Informalisation and Other Issues

• Gross Domestic Product (GDP): The total money value of all final goods and services produced within a country in a given year.
• Gross National Product (GNP): The GDP adjusted for net earnings from foreign transactions (exports minus imports).
• Economic Activities: All activities that contribute to the Gross National Product.
• Worker: An individual engaged in an economic activity, including self-employed persons, helpers, and those temporarily absent due to illness, injury, or social functions.

During 2022-23, India had a workforce of approximately 545 million. The majority of this workforce resides in rural areas, with men constituting about 77% of the total workforce.

The Worker-Population Ratio is a key indicator used to analyze the employment situation and assess the proportion of the population actively contributing to production.

• Rural-Urban Differences: Rural areas show a higher participation ratio because limited resources force people to enter the workforce early, often discontinuing education.
• Gender Disparities: Urban female participation is significantly lower (20.7%) due to social discouragement when male household incomes are high, and the non-recognition of household work as productive economic activity.

1. Self-Employed: Workers who own and operate an enterprise to earn their livelihood (e.g., shop owners, independent farmers). This is the largest employment category in India (~58%).
2. Casual Wage Labourers: Workers casually engaged in others' enterprises or farms in return for daily or periodic wages (e.g., construction workers). They constitute ~20% of the workforce.
3. Regular Salaried Employees: Workers engaged by an employer on a regular basis and paid regular wages or salaries (e.g., teachers, engineers). They account for ~22% of the workforce.

• Gender Distribution: Self-employment is the primary source of livelihood for both men (54%) and women (67%). Casual wage work is the second major source for women.
• Regional Distribution: Self-employment is dominant in rural areas (65%) due to agriculture, whereas urban areas show a higher share of regular salaried jobs (48%) due to concentrated industrial and service enterprises.

• Primary Sector: Agriculture, Forestry, Fishing, Mining, and Quarrying.
• Secondary Sector: Manufacturing, Construction, Electricity, Gas, and Water Supply.
• Tertiary / Service Sector: Trade, Transport, Storage, and Services.

The primary sector remains the largest employer in India, particularly for rural populations and female workers (64.4%). The service sector dominates urban employment (60.9%).

During 1950-2010, India's GDP grew positively and consistently outpaced employment growth, which stagnated at under 2%. This widening gap where economic output expands without generating proportional employment is termed Jobless Growth.

• Sectoral Shift: The share of the workforce in the primary sector declined from 74.3% (1972-73) to 46.1% (2023-24), while secondary and service sectors expanded.
• Casualisation of Workforce: The process where workers shift from self-employment and regular salaried jobs to highly vulnerable casual wage labour.

Out of 535 million workers in India (2019-20), only about 59 million (11%) were in the formal sector, leaving 89% of the workforce in the informal sector. This high concentration of informal employment highlights the vulnerability of the Indian workforce.

Unemployment is a situation where individuals who are willing and able to work at prevailing wage rates cannot find employment. Key data sources include:

• Reports of the Census of India
• National Statistical Office (NSO) Reports
• Annual Reports of the Periodic Labour Force Survey (PLFS)
• Directorate General of Employment and Training (DGET)

• Open Unemployment: A situation where workers are willing to work but are completely without jobs.
• Disguised Unemployment: A state where more workers are employed than necessary, meaning their marginal productivity is zero (common in agriculture).
• Seasonal Unemployment: Unemployment that occurs during specific periods of the year when agricultural or industrial activities cease.

• Direct Employment: The government employs people directly in administrative departments, public enterprises, and services.
• Indirect Employment: Government policies and investments stimulate private sector output, leading to secondary job creation.

The government implements various poverty alleviation and employment generation programmes, notably the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005, which guarantees 100 days of unskilled manual work to rural households.