• As per a recent study, there are fewer people employed in agriculture today, but the transformation has been weak.
  • Those moving out of farms are working more in construction sites and the informal economy than in factories.
  • In 1993-94, agriculture accounted for close to 62% of the country’s employed labour force.
  • The labour percentage in agriculture (based on data from the National Statistical Office’s Periodic Labour Force Surveys), dropped almost 6% points by 2004-05 and 9% points over the next seven years.
  • The declining trend continued, albeit at a slower pace, in the subsequent seven as well.
  • Between 1993-94 and 2018-19, agriculture’s share in India’s workforce came down from 61.9% to 41.4%.
  • It is estimated that given its level of per capita GDP in 2018, India’s farm sector should be employing 33-34% of the total workforce.
  • 4% may not be a substantial deviation from the average.

Employment Trends

  • There’s been a reversal of the trend in the last two years, which has seen the share of those employed in farms rise to 44-45% in 2020-21.
  • This has primarily to do with the Covid-induced economic disruptions.
  • Even the movement of workforce from agriculture that India has witnessed over the past three decades or more does not qualify as what economists call “structural transformation”.
  • Structural transformation would involve the transfer of labour from farming to sectors – particularly manufacturing and modern services – where productivity, value-addition and average incomes are higher.
  • However, the share of manufacturing (and mining) in total employment has actually fallen along with that of agriculture.
  • The surplus labour pulled out from the farms is being largely absorbed in construction and services.
  • The structural transformation process in India has been weak and deficient.
  • There is movement of labour taking place away from farms – even if stalled, possibly temporarily.
  • But that surplus labour isn’t moving to higher value-added non-farm activities, specifically manufacturing and modern services.
  • The labour transfer is happening within the low-productivity informal economy.

Overcoming the unemployment rate :

  • Schemes for upskilling the workforce involved in the agriculture sector should be prioritized by the government.
  • It would provide the dual benefit of enhancing the knowledge for efficient farming and also, in case the labour wants to switch careers, they can look for other superior areas of employment.
  • Promoting Labour Intensive Industries:
  • There are a number of labour-intensive manufacturing sectors in India such as food processing leather and footwear, wood manufacturers and furniture, textiles and apparel and garments.
  • Special packages, individually designed for each industry are needed to create jobs.
  • Decentralisation of Industries:
  • Decentralisation of Industrial activities is necessary so that people of every region get employment.
  • Development of the rural areas will help mitigate the migration of the rural people to the urban areas thus decreasing the pressure on the urban area jobs.


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