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Employment and Unemployment Scenario in India
The result of the 61st round of survey by NSSO – National Sample Survey Organisation conducted in 2004-05 provides the latest information on the employment and unemployment scenario in India. National Sample Survey Organisation (NSSO) surveys and generates data and information once in five years.

Labour force scenario in India
The Indian labor market can be categorized into three sectors:
• Rural workers, who constitute about 60% of the workforce
• Organized of the formal sector, that constitutes about 8% of the workforce
• Urban unorganized or informal structure which represents the 32% of the workforce.
During the year 1999-2000, the labour force was estimated to be 407 million. In 2004-05 the labor market consisted of 469.06 million workers and has grown up to 509.3 million in the year 2006. The labour force growth rate accelerated from 1.03 per cent to 2.93 per cent (more than the population growth rate).

 

In million

CAGR

 

1993-94

1999-00

2004-05

1993-94 to 1999-00

1999-00 to 2004-05

 

 

 

 

 

 

Labour Force*

381.94

406.05

469.05

1.03

2.93

 

 

 

 

 

 



Employment and unemployment rates

The annual rate of employment growth has increased from 0.98 per cent for the period 1993-94 to 1999-00 to 2.89 per cent in the period 1999-00 to 2004-05. The main reason of the increasing unemployment rate is the growth rate of the labour force which is more than the growth rate of employment.

 

1983

1988

1994

1999-00

2004-05

 

 

 

 

 

 

Employed

302.75

324.29

374.45

397

457.82

 

 

 

 

 

 

Unemployed

5.89

9.2

7.49

9.05

11.24

 

 

 

 

 

 

Unemployment rate(as % of labour force)

1.91

2.76

1.96

2.23

2.39

 

 

 

 

 

 



The employment scenario in India is dominated by the unorganized sector. As per the data for the year 2004-05, only about 9 percent of the total workforce is in the organized sector (all public sector establishments and all non-agricultural establishments in private sector with 10 or more workers); the remaining 91 percent are in the unorganized sector, self-employed, or employed as casual wage laborers. The organized sector is not growing in terms of the employment opportunities.

Employment in Indian industry sectors

The employment growth rate for the period 2004-05 has been recorded at 2.89 per cent i.e. a growth of 1.91 from the previous 0.98 per cent for the period1999-00. The employment scenario in different Indian industry sectors is as follows

EMPLOYMENT PROJECTION *

Sector

Employment in 2004-05 (million)

Projected Elasticity

GDP Growth rate (%)

Employment growth rate (%)

Projected employment 2009

 

 

 

 

 

 

Agriculture, forestry & fishing

267.57

0.7

3.73

2.61

296.62

Mining & quarrying

2.74

0.82

4.73

3.88

3.19

Manufacturing

53.51

0.34

10.9

3.71

61.9

Elect. Gas & water supply

1.37

0.33

6.9

2..28

1.5

Construction

25.61

0.88

12.07

10.62

38.35

Trade, hotels & restaurant Transport, storage and communication

64.49

0.45

11.97

5.39

79.56

Financing, insurance, real estate & business services

6.86

0.94

10.33

9.71

9.94

Community, social & personal services

35.67

0.28

7.6

2.13

38.81

 

 

 

 

 

 

Total

457.82

0.36

9.13

3.29

529.87



  • The share of the agriculture and allied activities has fallen from 59.8 per cent in 1999-00 to 58.4 per cent in 2004-05. But, the sector has also absorbed almost half of the increment in the workforce. Also, the employment elasticity of the agriculture and the allied sector stands high at 1.52.

  • The share of the manufacturing sector in employment has seen a marginal decline from 12.1 per cent to 11.7 per cent, absorbing 5.5 million share of the incremental workforce.

  • The services also increased its share in the employment from 22.7 per cent to 23.4 per cent, absorbing 16.8 million from the workforce during 1999-00 to 2004-05.

    The share of the self–employed workers in the Indian workforce has increased tremendously to 260 million.

    Elasticity of employment
    The Indian economy witnessed a decrease in the employment elasticity from 0.41 to 0.15 from 1993-94 to 1999-00. But the latest survey has seen this trend being reversed. For the period 2004-05, the aggregate employment elasticity has tripled from a low of 0.15 to 0.48.

    With the trends being witnessed, it has been projected that if the economy and the labour force maintain the constant growth rate of 9 and 2.93 per cent respectively, the workforce and the labour force will converge within a short period.

    (*Source of data: NSSO survey, The Hindu-23rd Oct)
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