Employment Situation Index: Due to poor female labour participation, Gujarat ranks No 12th in a group of 21 major states

femaleA fresh report on labour and employment situation in India, prepared by a high-profile organisation, believes that low labour force participation rate in India is largely because the female labour force’s participation rate is dismally low. A counterview.org analysis suggests this is true of Gujarat as well: 

“India Labour and Employment Report 2014”, published by Academic Foundation, New Delhi, which created a ripple recently for coming up with a report in association with several other institutes of learning which said Gujarat is No 1 state in economic freedom index, has ranked the state as No 12th out of a total of 21 states it has chosen for analysis for working out an Employment Situation Index. The report finds that Himachal Pradesh is the best state in employment state, ranking it No 1, followed by Delhi, Haryana, Karnataka, Punjab, Tamil Nadu, Maharashtra, Andhra Pradesh, Jammu & Kashmir, Kerala, and Rajasthan.

Despite relatively low ranking of Gujarat in Employment Situation Index (ESI), the report says, “Generally workers in the southern and western states of India have much better access to good quality employment than do workers in states in the central and eastern regions. Himachal Pradesh ranks number one, in particular because of a good performance with respect to women’s employment, while Bihar ranks last.” It adds, “There is considerable segmentation in the labour market in terms of forms of employment, sector, location, region, gender, caste, religion, tribe, etc. In spite of increased mobility over the years, acute dualism and sometimes fragmentation persists in the labour market.”

The study, which has been carried out by scholars from the Institute of Human Development, commends India for witnessing “an impressive GDP growth rate of over 6 per cent since the 1980s”, but adds, “Overall, labour-force to population ratio (in the age group 15 years and above) at 56 per cent is low in India compared to nearly 64 per cent for the rest of the world.” It adds, “The low participation in India is largely because the female labour force participation rate (LFPR) is dismally low at 31 per cent, which is amongst the lowest in the world and the second lowest in South Asia after Pakistan.”

Gujarat’s LFPR, according to the National Sample Survey Organisation (NSSO) “Key Indicators of Employment and Unemployment in India, 2011-12”, released last year, is 61.1 per cent, which is above the national average but lower than several states, including Andhra Pradesh (66.4 per cent), Chhattisgarh (71.4 per cent), Himachal Pradesh (72.3 per cent), Maharashtra (62.1 per cent), Rajasthan (61.9 per cent), Tamil Nadu (63.0 per cent), and West Bengal (61.8 per cent). One of the main reasons behind relatively poor LFPR in Gujarat is one of the poorest female LFPR of Gujarat – just 32.1 per cent, as against the all-India average of 33.1 per cent.

Female labour rate participation rate 2011-12 (per 1000)
Female labour rate participation rate 2011-12

The states which perform much better in female LFPR than Gujarat are Andhra Pradesh 50.1 per cent, Chhattisgarh (58.8 per cent), Himachal Pradesh (65.9 per cent), Jammu & Kashmir (34.6 per cent), Karnataka (34.9 per cent), Kerala (35.4 per cent), Madhya Pradesh (32.5 per cent), Maharashtra (41.5 per cent),  Odisha (34.7 per cent), Rajasthan (45.3 per cent), Tamil Nadu (42.4 per cent), and Uttarakhand (40.1 per cent). As one can see, the overall LFPR of Gujarat has been pulled down by low female labour force participation rate.

“India Labour and Employment Report 2014” says that even today “the large proportion of workers engaged in agriculture (about 49 per cent) contribute a mere 14 per cent to the GDP.” In contrast, it says, “the service sector which contributes 58 per cent of the GDP barely generates 27 per cent of the employment, and the share of manufacturing in both employment (13 per cent) and GDP (16 per cent) is much lower than in East Asian and South-East Asian countries. This unbalanced pattern of growth is at variance with not just the experience of the fast growing economies of East and South-East Asia but also the economic historical experience of the present day developed countries of the West.”

The NSSO report confirms that this true for Gujarat as well. In 2011-12, agriculture in Gujarat accounts for just 11.3 per cent of the total gross state domestic product (GSDP), while it employed 48.78 per cent of the workforce, which is almost equal to the national average. The states with lesser per cent of workforce in agriculture include Haryana (43.34 per cent), Jammu & Kashmir (42.48 per cent), Kerala (25.53 per cent), Punjab (36.46 per cent), Tamil Nadu (35.16 per cent), and West Bengal (39.23 per cent).

The Academic Foundation report further says that an “overwhelmingly large percentage of workers (about 92 per cent) are engaged in informal employment and a large majority of them have low earnings with limited or no social protection.” It adds, “This is true for a substantial proportion of workers in the organized sector as well. Over half the workers are self-employed, largely with a poor asset-base, and around 30 per cent are casual labourers seeking employment on a daily basis. About 18 per cent of those employed are regular workers, and amongst them less than 8 per cent have regular, full-time employment with social protection.”

Employment Situation RankingIf the NSSO survey is to be believed, this true of rural areas of Gujarat, where 57 per cent of the workforce is self-employed and another 32.7 per cent are casual workers. In urban areas the situation is better – here, 41.7 per cent of the workforce is self-employed, and another 8.9 per cent are casual workers. While this may suggest a better situation than other states, the fact is, salaries and wages in Gujarat are one of the worse in India, both in rural and urban areas. In Gujarat, the rural casual worker received on an average Rs 113 per day, as against the national average of Rs 139. The corresponding figure for urban areas is Rs 145 per day in Gujarat, as against the all-India average of Rs 170.  As for regular wages/ salaries, it was Rs 254 in rural Gujarat (all-India Rs 299), and Rs 320 in urban Gujarat (as against Rs 450 at the national level.

The Academic Foundation study says, “Levels of education and professional and vocational skills are extremely low. Less than 30 per cent of the workforce has completed secondary education or higher, and less than one-tenth have had vocational training, either formal or informal. Although these figures, based on National sample Survey Organisation (NSSO) surveys, do not capture many types of skills that are informally acquired, it still suggests that skill-acquisition is generally very low. Since good quality ‘formal’ employment is rare, access to it is extremely unequal.”

It points out, “Disadvantaged social groups such as Scheduled Castes (SCs), Scheduled Tribes (STs), and large sections of the Other Backward Classes (OBCs) are mostly concentrated in low-productivity sectors such as agriculture and construction and in lowpaying jobs as casual labourers and Muslims are concentrated in petty so-called low productive self-employment. On the other hand, uppercaste Hindus and ‘others’ (comprising minorities such as Jains, Sikhs and Christians), have a disproportionate share of good jobs and higher educational attainments. There is an overlap between poverty and poor quality of employment as well.”

— Rajiv Shah

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