We examine the Indian economy during a peak period of high growth between 2005 – 2012 to analyze nature and patterns of household-level transitions across the different sectors of the economy and to relate these transitions to the broader process of structural change. We use a pan-India household-level panel data to categorize households according to their primary income sources into seven sectors characterized by varying degrees of formality/​informality and various production structures and labour processes. We find that even this this relatively brief period, there has been a very large volume of transitions of households across these sectors. However, despite such volumes of transitions, the overall economic structure, and its segmentations, has continued to be reproduced, along with a regeneration of ​‘traditional’ informal spaces that were often expected to dissolve over time with high economic growth. To ascertain the nature of these transitions – ​‘favorable’ or ​‘unfavorable’ – in terms of economic well-being of households, we employ a counterfactual analysis. We find that a majority of the transitions in the economy during the period of analysis have been ​‘unfavourable’ in nature, with large proportion of households transitioning to sectors that are not ​‘optimal’ locations for them, given their socioeconomic characteristics. Further, using a multinomial logit regression framework, we find that
the likelihood and nature of these transitions significantly vary with household characteristics, some of which, like social caste, are structurally given and cannot be optimally chosen by households. This dynamic process of reproducing a rather stagnant structure, along with substantial ​‘unfavourable’ transitions towards ​‘traditional’ informal economic spaces that are continuously reshuffled and reconstituted, provide insights into the complexity of India’s development trajectory that is often glossed over in the literature.

Author:

• Surbhi Kesar

This paper is based on fieldwork I had undertaken regarding tribal migrant workers in the construction sector, in Ahmedabad in May-July 2018, coordinated by Aajevika Bureau(AB). I had undertaken this fieldwork to assess the work of AB and advise them about strategies to collectivize migrant labour groups. While interacting with a particular social group (Bhil tribals from South West Rajasthan) who work in the construction sector, I struggled to capture the specificity of their experience through the concept of informal labour. This paper is an attempt to characterize the specificity of their social experience, while also, reframing the concept of informal labour. I use the concept of labour process (Michael Burawoy: Manufacturing Consent) to argue that there is not a binary or one-dimensional power relationship between informal labour and owner/​state/​capital, but instead, the process of surplus appropriation occurs at multiple nodes through different agents. In this paper, I have identified multiple modes of surplus extraction which are embedded as institutions or social norms in the labour process. Further, I argue that there is a close link between the status of tribal workers as marginalized within society, and their status as displaced and marginalized in their living areas and workplace. This difference translates into identity based discrimination faced in the city, as well as, structural exclusion from the governance apparatus faced as migrants. Therefore, tribal migrant workers do not earn enough to subsist and are highly dependent on early child birth, non-remunerated services of their family and the social security net provided by their village community.

Author:

• Rahul De

The recently released data from the 2017 – 2018 Periodic Labour Force Survey have created a controversy regarding the quantity of employment generated in the past few years in India. Estimates ranging from an absolute increase of 23 million to an absolute decline of 15.5 million have been published. In this paper we show that some of the variation in estimates can be explained by the way in which populations are projected based on Census 2011 data. We estimate the change in employment using the cohort-component method of population projection. We show that for men total employment rose but the increase fell far short of the increase in working age population. For women, employment fell. The decline is concentrated among women engaged in part-time or occasional work in agriculture and construction. 

Authors:

• Paaritosh Nath
• Amit Basole

Does there exist a trade-off between labour’s income share and output growth rate? Or does a reduction in wage share in itself reduce the output growth rate? These questions have returned to the centre stage in the midst of India’s present crisis as the government sought the dilution and suspension of labour laws as a counter-cyclical policy instrument. In the absence of any other stimulus or countervailing factors, the impact of such a policy would hinge on the relationship between income distribution and effective demand. This paper attempts to lay bare this relationship for the Indian economy through an empirical analysis of India’s macro data and a theoretical model on the basis of regression results.

Author:

• Zico Dasgupta

Social protection and social security have very limited coverage in India. This reality has not changed since independence, one of greatest failures of the development strategy India adopted in the early fifties. The labour force is predominantly unorganized. As much as 91 per cent of the labour force are in informal employment, i.e. without any social insurance we estimated from the NSO’s Periodic Labour Force Survey (2017−18) (Mehrotra and Parida, 2019). This is barely down 2 percentage points from 93% in 2011-12 (NSO’s 68^th Round). In fact, regardless of the growth rate of GDP, this high share of informality in the workforce had not changed until 2012, and when it fell recently, it did so by merely 2 points. The rest 9 per cent of the workforce has varying levels of social security in the form of provident fund, paid leave, medical insurance and other benefits.

Author:

• Santosh Mehrotra

We analyze findings from a large-scale survey of around 5000 respondents across 12 states of India to study the impact of COVID-19 pandemic containment measures (lockdown) on employment, livelihoods, food security and access to relief measures. We find a massive increase in unemployment, an equally dramatic fall in earnings among informal workers, large increases in food insecurity, depletion of savings and patchy coverage of relief measures. Two-thirds of our respondents lost work. The few informal workers who were still employed during the lockdown experienced more than a fifty percent drop in their earnings. Even among regular wage workers, half received either no salary or reduced salary during the lockdown. Almost eighty percent of surveyed households experienced a reduction in their food intake and a similar percentage of urban households did not have enough money to pay next month’s rent. We also use a set of logistic regressions to identify how employment loss and food intake varies with individual and household level characteristics. We find that migrants and urban Muslims are significantly worse off with respect to employment and food security. Among employment categories, self-employed workers were more food secure. The Public Distribution System (PDS) system was seen to have the widest reach among social security measures. However, even under PDS, 16 percent of vulnerable urban households did not have access to government rations. Further, half of the respondents reported not receiving any cash transfers (state or central). We conclude that much more is needed in the way of direct fiscal support that has been announced thus far by state and central governments in India.

Authors:

• Surbhi Kesar
• Rosa Abraham
• Rahul Lahoti
• Paaritosh Nath
• Amit Basole

Controlling for monetary policy, government transfers are potentially inflationary. This, however, may not be true when the economy is demandconstrained. Using a panel data of 17 Indian states over 30 years, we show that government transfers via welfare programs do not lead to inflation. For identification, we use a narrative shock series of transfer spending that is based on the introduction of new welfare programs. We then look at a specific program, NREGA, which has been shown to increase rural wages, and show that its implementation did not increase inflation.

Authors:

• Girish Bahal
• Anand Shrivastava

Most international development economics and industrial organization literature emphasises the importance of SMEs (small and medium enterprises) as important to output, but especially to employment generation. Countries have different definitions for SMEs. In India the MSMEs (micro, small and medium enterprises) are defined in terms of investment in plant and machinery or equipment. The MSME Ministry (Annual Report, Government of India 2017 – 18) stated that the sector accounts for 45% of the manufacturing output and 40% of the total exports of the country; also that MSMEs accounted for 30.74% of GDP in 2014– 15. Not surprising, MSMEs are considered a driving force of the economy.

Authors:

• Santosh Mehrotra
• Tuhinsubhra Giri

This article analyses relationships between the implementation of state-level industrial policies in India and manufacturing sector economic performance (employment and gross value added), utilising data from the Annual Survey of Industries conducted by the Government of India. I employ panel data fixed-effects regression models to evaluate the associations between the industrial policy and state-industry specific performance over the 2007-08 to 2014 – 15 period, incorporating potential effects of the state government’s political alignment, infrastructure provision and educational expenditure in the state. The results provide evidence of a positive correlation between industrial policy implementation and firm output and employment, by around 12.6 — 14 per cent. However, subsequent introductions of an industrial policy are negatively associated with employment and are uncorrelated with industrial GVA. This analysis has implications for economic policy in light of the Central Government’s plans to implement a revised industrial policy at the national scale.

Author:

• Raavi Aggarwal

Falling total employment is an unprecedented trend seen from 2011-12 to 2017 – 18. Due to a decline of employment in agriculture and manufacturing and slow growth of construction jobs, the process of structural transformation, which had gained momentum post-2004 – 5, has stalled since 2012. Mounting educated youth unemployment, and lack of quality non-farm jobs have resulted in an increase of the disheartened labour force. Though the share of regular and formal employment increased marginally due to growth of formal jobs in the private sectors, the share of informal jobs within government/​public sector increased. A dominant share of jobs is still generated by micro and small units of the unorganized sectors without any formal or written job contract. In both government and private sectors the number of contract jobs (with less than a year’s contract) is on the rise post 2011-12. Not surprisingly, real wages have not increased in either rural or urban areas.

Authors:

• Santosh Mehrotra
• Jajati K. Parida

Globally, research has shown that, there is a high correlation between the level of per capita income and the rate of female labour force participation. At the same time the agency and autonomy of women in a country improve with the level of female labour force participation.

Authors:

• Santosh Mehrotra

With the lack of official government data on unemployment and other labour market indicators, the most viable and recent source have been the regular household surveys conducted by the Centre for Monitoring the Indian Economy (CMIE). Given the differences in methods in data collection, it becomes exceedingly important to establish some comparability between the government and the CMIE datasets. This paper attempts to do that using two methods. First we fit a model of employment status on the CMIE data and see how well it predicts outcomes in the older Labour Bureau 2015 – 16 and NSS 2011-12 data. Then we compare state-level estimates of broad labour market indicators from CMIE 2016 and Labour Bureau 2015 – 16 datasets. The broad results are that despite differences in methodologies, the estimates for men are quite comparable between the surveys, while measures of women’s participation in the labour force seem particularly sensitive to the way questions are asked in surveys.

Authors:

• Rosa Abraham
• Anand Shrivastava

A continuous and sharp decline in the already depressed female labour force participation rate in India post 2005, particularly in the face of its rapid economic growth raises questions about the inclusiveness of the growth process. The paper recommends a set of policies based on the analysis of the nature and trends of female work participation and a brief analysis of the underlying reasons behind such trends. Women are moving out of the low productivity agricultural sector, which necessitates an increase in employment opportunities in the nonagricultural sector, particularly in rural and in semi-urban locations. Improving skills for employability, especially in manufacturing clusters (which is where the jobs are) located close to young girls’ rural homes, would help the females to join the labour force if non-agricultural jobs are growing. To release women from unpaid work in the household to join the paid labour force, it is essential to improve child care facilities and other basic service facilities, which again calls for raising the share of public expenditure in some sectors and specific facilities. For instance, increasing single working women’s housing, making public transport safer, and modifying public programmes to cater to women’s needs can pave the way for more women to engage and remain in the labour force, become active participants in the growth process, and thus achieve greater economic empowerment.

Authors:

• Santosh Mehrotra
• Sharmistha Sinha

Indians are optimistic. According to the Pew Research Center’s 2017 Global Attitudes Survey, three out of four Indians believe that, ​“when children today in India grow up, they will be better off financially than their parents” (Pew Global Attitudes Survey, 2017). Families hinge their hopes on the ability of the next generation to work hard, earn a living, and be a source of financial support. For years now, the nation has done the same, pinning its economic ambitions to a demographic advantage, or youth bulge, that is set to continue only for the next two decades. Unless there are pathways to productive and high-quality employment, the nation’s youth will not be able to deliver on these expectations.

Authors:

• Sabina Dewan
• Divya Prakash

A striking feature of the Indian economy has been the relatively small contribution made by the manufacturing sector to the country’s Gross Domestic Product (GDP) and, more importantly, to employment. In 2013, manufacturing accounted for only 16.5 per cent of India’s GDP, compared to 29.7 per cent of China’s.3 According to the National Sample Survey (NSS) on Employment and Unemployment, India’s manufacturing sector provided employment to 61.3 million in 2011-12, which was only 13 per cent of the country’s total workforce of 472.5 million in that year.

Authors:

• Jayan Jose Thomas
• Chinju Johny

Author:

• Anumeha Yadav

This study is the outcome of the experience of the Shramajivi Mahila Samity, an independent, non-party mass organisation of mainly rural working women in West Bengal. Shramajivi Mahila Samity works on gender discrimination and rights of women. It does not run any direct income generating programmes. However, in the 28 years of our work in rural Bengal, we have seen women contributing in myriad ways to the economies of their families. They are an irreplaceable element in the survival of their families, often making the difference between starvation and subsistence. We have always been surprised by the official statistics which show West Bengal as having one of the lowest female labour participation rates in the country. It has led us to believe that there is a gross misunderstanding about women’s work and the importance of unpaid work in the economy of a poor household. In the past few decades, we have seen more and more women in rural Bengal joining paid work. We have seen that men are migrating and the agricultural labour force in many areas consists now almost entirely of women. We were therefore surprised to read about a debate on falling female labour particpation rate at the national level. It did not match our own work experiences. It has led us to the present study, which we hope will be able to shed some light on what is actually happening to women from the rural working class in West Bengal.

Author:

• Anuradha Talwar

In India, the relative importance of the handloom sector, one of the largest employers following agriculture, has been declining for last few decades. The All India Handloom Census data for the year 2009-10 however showed a rather modest decline in the number of weavers in West Bengal, in contrast to a 33% decline at the national level in the same year. But share of handloom income in total household income for the weaver households in the state has decreased significantly pointing to considerable occupational diversification among them. Based on a qualitative field study in three districts of West Bengal — namely, Hooghly, Nadia and Purba Bardhaman — this essay presents findings related to the condition of handloom weavers in West Bengal and in the light of the findings, examines two issues— intra-sector and inter-sector mobility of labour as well as weavers’ response to changing market conditions. The paper argues for a more labour-focused approach in place of currently dominant tradition-focused understanding of the sector.

Authors:

• Rajesh Bhattacharya
• Sarmishtha Sen

This study focuses on the Gurgaon-Manesar-Dharuhera-Bawal-Tapukara-Neemrana industrial belt in Haryana and Rajasthan, which is an important ​‘node’ or part of Delhi-Mumbai Industrial Corridor (DMIC) and a major destination of capital in the last few decades. The study is based on primary survey work of qualitative nature of over 6 months from September 2017 to March 2018. Primary respondents are workers of different segments, plant-level Trade Union leaders and Trade Union activists of the belt, with some inputs from secondary literature, workers magazine and data published by the companies and the government.

Authors:

• Amit
• Nayanjyoti

After independence in 1947, India embarked on an ambitious path of industrialisation, following the standard modern developmental prescription drawn from the experience of the so-called developed countries. Since the inauguration of the reform era in 1991, this model of development, duly globalised, has been reinforced by the decisions made by metropolitan policy elites both within and beyond India.

Author:

• Aseem Shrivastava

Domestic workers (henceforth, DW), are a part of the large ​‘informal’ sector of urban economy and society in India.ii According to the NSSO data, over the last two decades, the DW populationiii has emerged as the second largest urban informal workforce (Chen and Raveendran 2011), next only to ​‘home based workers’ (artisans and petty commodity producers). According to the NSS 68^th round (July 2011- June 2012), it is estimated that 41.3 lakhs workers work in the households of others, and an overwhelming 27.9 lakhs of this total are women.iv An increasing number of studies are emerging about DWs around the world including the phenomenon of international migration of DWs for work. This paper is a critical commentary on the collectivization of DWs, based upon an ongoing empirical study that combines ethnographic and quantitative inquiry among DWs in different parts of Bengaluru, India. Our aim here is to provide readers with general insights into some of the key struggles of and prospects for domestic workers in a particular context – DWs who work in a mega-city and in multiple homes (rather than as live-ins).

Authors:

• Balmurli Natrajan
• Rajesh Joseph

The policy framework in India has provided support to the micro and small enterprises. In 2006, the Micro, Small and Medium Enterprises (MSME) Act 2006 came into existence (msme​.gov​.in). This Act aimed at promoting and developing micro, small and medium enterprises. In India, the MSME sector’s contribution to GDP was 17 percent of GDP during 2004-05 to 2009-10. More recently, a comprehensive policy called the National Policy for Skill Development and Entrepreneurship 2015 came into existence. This policy supersedes the National Skill Development Policy of 2009. The vision statement of the policy is ​“To create an ecosystem of empowerment by Skilling on a large Scale at Speed with high Standards and to promote a culture of innovation based entrepreneurship which can generate wealth and employment so as to ensure Sustainable livelihoods for all citizens in the country.” Recent policies such as demonetization and implementation of the Goods and Services Tax (GST) have created a setback for the micro enterprises that operated in the informal economy based mainly on cash transactions.

Authors:

• Jeemol Unni
• Ravikiran Naik

Despite its weak performance in terms of job creation in recent years, the organised manufacture sector remains vital to employment policy. This paper investigates the aggregate trends in this sector, in employment, output, labour-capital ratio, as well as wage share and wage rates at the three-digit NIC level over a long period from 1983 to 2016 using the Annual Survey of Industries data. We show that three distinct sub-periods can be identified within the overall period. Further, using shift-share decomposition we show that most of the decline in the L/K ratio can be explained by within industry changes. Finally, we analyze industries with respect to their capacity to deliver job growth as well as wage growth.

Authors:

• Amit Basole
• Amay Narayan

Preponderance of small (that is, less than 10 workers) sized manufacturing establishments in India is said to reject their inability to growth in size on account of prohibitive cost of regulatory compliance (and the associated corruption). Similarly, the ​“U” shaped (or bi-modal) distribution of manufacturing employment by size of establishment or enterprise – popularly termed the ​“missing middle” – is argued to be the outcome of the rigid labour laws, adversely a acting productivity growth. Do the foregoing propositions represent hard facts, or artefacts of mis-measurement and misinterpretation of the evidence? The paper contends that it is the latter: the observed employment distribution by size is more likely to reject the widespread and growing evasion of o3cial registration, and under-reporting or mis-representation in the administrative data. Further, the wide schism observed between the organised (formal) and unorganised (informal) labour markets represents persistence of surplus labour, and organisational dualism – a la Hella Myint — on account of technology and organisation of production in the modern sector; and perhaps not on account of policy induced rigidities in the labour market, as many contend.

Author:

• R.Nagaraj

This paper attempts to explore the avenues for future jobs given the impact of technology in the form of internet of things, robots, cloud computing, nano technology, automization of manufacturing etc. and the measures in place to address these challenges. The paper explores the labour market from the supply side, the demographic advantage that India has along with the constraints involved in converting the advantage into a dividend. The demographic spread of the labour force is geographically different in that the South we have an ageing workforce with longer life expectancy while in the North and Central India the new entrants to the labour market is the youth. The demographic advantage is concentrated in the North. This is then addressed against the backdrop of the impact of the Fourth Industrial Revolution on jobs and the skill gaps that exist in addressing them. The skill gap therefore needs to be addressed differently. While the policy focus is on skilling/up-skilling and re-skilling the emphasis of each of these components differ according to the geographical spread of the demographic advantage. There should be continuous upgrading of the training curriculum to incorporate the technological advancements. More number of youth should be motivated to opt for vocational courses that enhance their skill set and employability to enable India convert its demographic advantage into dividend.

Author:

• A. Srija

Analyses of the Indian labour market have been been characterized by the lack of recognition of one major fallacy or myth, two looming crises, and a silent tragedy resulting from unrealized expectations. The fallacy is that 12 mn join the Indian labour force every year, looking for work. The first of the two looming crisis is that millions need and wish to agriculture behind in search of non-agricultural work, but at least since 2011-12 they are not finding enough work to pull them away from agriculture. The second looming crisis is that youth are joining the age group of 14+ in growing numbers, each year with higher and higher levels of education, and are not finding nonagricultural work – despite their aspiration being only for such work. The final concern, which is simmering rather than reached the ​‘ready-to-boil-over’ stage, is the sub-group of the second looming crisis of youth who are getting better educated, is for girls who have reached gender parity in secondary education, and hence aspire for nonagricultural work. All three categories of workers have plenty among them who are disheartened workers, for whom there are too few non-agricultural opportunities.

Author:

• Santosh Mehrotra

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) provides 100 days of work in a year for every rural household at a minimum wage. Because of MGNREGA, for the first time in the country, a transaction-based management information system (MIS) has been made available in the public domain, a feather in the cap of transparency. An essential safeguard in MGNREGA is delay compensation to be paid when workers do not receive wages within 15 days of completion of work. Despite several attempted measures, payment delays are rampant and the method of calculating delay compensation is flawed leading to massive under-calculation of the true payable compensation. By analysing over 90 lakh transactions for the financial year 2016 – 2017 across 10 states, we observe that only 21% of the payments were made on time and the central government alone was taking an average of over 50 days to electronically transfer wages. On aggregate, in our sample, while the true total delay compensation payable is about Rs. 36 crores, only about Rs. 15.6 crores is being calculated in the MIS. The Ministry of Rural Development (MoRD) has acknowledged the correctness of the findings and the Supreme Court of India has also issued Orders to the MoRD based on these findings.

Authors:

• Rajendran Narayanan
• Sakina Dhorajiwala
• Rajesh Golani

The policymakers, particularly on the right side of the aisle, have traditionally stigmatized any form of environmental regulations, as being a detrimental practice, which raises the cost of production, disproportionately affects the small businesses, and imposes expenses on the economy that tend to stifle economic growth and cut levels of employment (Murphy et al. [2015]). So, what this argument does is to essentially juxtapose environmental regulations against the growth and job opportunities in any economy. In the specific context of developing countries, this raises serious concerns about any environmental regulations as these economies are already reeling under problems of severe unemployment and poverty. Therefore, any discussion on clean energy in the context of a developing economy is usually taken with a grain of salt since it somehow tends to generate a feeling among the politicians as well as the policymakers that it will inflict hardships on the economy.

Authors:

• Rohit Azad
• Shouvik Chakraborty