rural non farming

Topics: Employment, Infrastructure, States and territories of India Pages: 67 (22199 words) Published: August 19, 2014
RURAL NON-FARM EMPLOYMENT IN
INDIA: MACRO-TRENDS, MICROEVIDENCES AND POLICY OPTIONS

Brajesh Jha

Agricultural Economics Unit
Institute of Economic Growth
University Enclave, Delhi-110007
Gram: Growth-110007 Phones: 91-11-27667101, 27667288, 27667365 Fax: 91-11-27667410 E-mail: brajesh@ieg.ernet.in Website: www.ieg.nic.in

RURAL NON-FARM EMPLOYMENT IN INDIA: MACROTRENDS, MICRO-EVIDENCES AND POLICY OPTIONS Brajesh Jha*
ABSTRACT
Towards the end of the 1990s, the incidence of unemployment on the basis of CDS (current daily status) has exceeded seven per cent. There are also evidences of deterioration in the quality of rural employment; casualization of rural workers for instance, has increased many-fold. Real wages of rural workers however, increased and the disparity in rural and urban wages also reduced during the 90s. In this context, the present study investigates the nature and pattern of rural diversification in India. The study uses the NSS quinquennial survey on employment to present macro-trends in rural employment; it also utilizes selected information collected by Agro-Economic Research Centres (AERCs) to arrive at certain inferences about the process of rural diversification. Disaggregate level figures shows that both push-and-pull factors have contributed to rural non-farm employment growth; the process of rural diversification in such situations is however, different. The study finally discusses broad strategies to increase rural non-farm employment in the country.

I. INTRODUCTION
The Indian economy grew at an impressive rate in the last decade and demographic pressure also slowed.1 Yet, the incidence of unemployment (CDS) towards the end of the 1990s was more than seven percent. The situation is especially disconcerting in the rural sector. Employment in rural sector, which is associated mostly with agriculture, has stagnated during the 90s (Jha 2006). Considering the increased pressure on land there exists limited scope for increasing employment in agriculture so that employment in the non-farm sector becomes an important option

* The author is grateful to Prof. B. N. Goldar and Prof. Arup Mitra for their comments on an earlier draft of the paper. Author is also grateful to Dr Sakthivel for parting with some data on employment. 1

Though the rate of growth of the economy varies depending on the choice of base year and other factors, most of the study finds growth in the economy during the decades of 1990s at around 6 per cent.

1

Studies also suggest that with the process of development, the share of non-farm income and employment in the total income and employment of the rural households increases in the developing countries.2 A combination of farm and non-farm income at the household level provides resilience against adverse situations in either of the sectors, though agriculture is known for more frequent adversity. There are also evidences to show that productivity and profitability in the non-farm sector is generally higher than in the farm sector; as are the average wages and working conditions that obtain in the non-farm sector (Fisher et al. 1998). A greater reliance on the non-farm sector would therefore provide a demand-pull to rural economy and also ensure welfare for rural workers. In India, economic opportunities in the non-farm sectorhave also increased.3 A comparative account of the non-farm sector in the rural vis-à-vis the urban sector however, shows significant disparity in terms of its size and growth.4 The lopsided nature of growth of the non-farm sector is causing a problem of rural - urban migration. The small base of the rural non-farm sector located within a large rural population is in fact indicative of the employment

potential

in

the

rural

non-farm

sector

(RNFS).

Achievement

of employment growth as per its potential may require a more favourable policy environment; and the present study attempts to search for these policy options....

References: Acharya, S. and A. Mitra (2000). “The Potential of Rural Industries and Trade to Provide Decent Work
Conditions: A Data Reconnaissance in India”, SAAT Working Papers, International Labour
Ahluwalia, M. S. (1978). “Rural Poverty and Agricultural Performances in India” Journal of Development
Studies, Vol
Basant, R., B. L. Kumar and R. Parthasarathy (1998). (edited). Non-Agricultural Employment in Rural India:
The Case of Gujarat, Rawat Publications, Jaipur, India.
Bhalla, G.S. and G. Singh (1997). “Recent Developments in Indian Agriculture-A State level Analysis”
Economic and Political Weekly, Vol
Bhattacharya, B. B., N.R. Bhanumurthy and S. Sakthivel (2004). “Economic Reforms and Structural Changes
in Employment: A Comparative Analysis of Gender- Specific Employment Behaviour in Organised
-------------- (2001). Economic Census 1998- All India Report, New Delhi.
Centre for Monitoring Indian Economy, CMIE (2002). Profiles of Districts, October
Monitoring Indian Economy (CMIE), Mumbai.
Chandrasekhar, CP and Jayati Ghosh (2004). “How Feasible is a Rural Employment Guarantee?” Social
Scientist, No.4 (July-August): 374-375.
Chinna, Rao B. (2004). “Rural Non-farm Employment in Andhra Pradesh”, Unpublished report submitted by
Agro-Economic Research Centre (AERC), Waltair to the Ministry of Agriculture, GoI, New Delhi.
Dreze, J. (2004). “Financial Implications of an Employment Guarantee Act: Preliminary Estimates”, A note
prepared on behalf of the National Advisory Council, Government of India, New Delhi.
Dutta, R.A. and S.L. Bhaiya (2004). “Rural Non-farm Employment in Gujarat”, Unpublished report submitted
by Agro-Economic Research Centre (AERC), Vallabh Vidyanagar, Gujarat, to the Ministry of
Ghosh, J.K., V. Datta and A. Sinha (2004). “Rural Non-farm Employment in West Bengal”. Unpublished
report submitted by Agro-Economic Research Centre (AERC), Shantiniketan, West Bengal to the
Gogoi Bharati (2004). “Rural Non-farm Employment in Assam”, Unpublished report submitted by AgroEconomic Research Centre (AERC), Jorhat to the Ministry of Agriculture, GoI, New Delhi.
Gopalappa, D. V. (2004). “Rural Non-farm Employment in Karnataka”, Unpublished report submitted by
Agriculture Development and Rural Transformation Unit of the Institute of Economic and Social
Government of India (1994). Report of the Technical Committee on DPAP and DDP, Ministry of Rural
Development, New Delhi.
-------------(2001). Report of the Task Force on Employment Opportunities, Planning Commission, July 2001.
--------------(2002). Special Group on Targeting Ten Million Employment Opportunities Per Year, Planning
Commission, May 2002.
--------------(2004). Economic Survey 2003-04, Economics Division, Ministry of Finance, GOI, New Delhi.
Grover, D.K. and Sanjay Kumar (2004). “Rural Non-farm Employment in Punjab”, Unpublished report
submitted by Agro-Economic Research Centre (AERC), Ludhiana, to the Ministry of Agriculture,
Harriss, B. and J. Harris (1984). “Generative or Parasitic Urbanism? Some Observations from the Recent
History of a South Indian Market Town”, in J
Hazell, P.B.R. and S. Haggblade (1991). “Rural-Urban Growth Linkages in India”, Indian Jl. of Agricultural
Economics, Vol
Hossain, M. (1988). “Nature and Impact of the Green Revolution in Bangladesh,” Research Report no. 67,
International Food Policy Research Institute, Washington, D.C
Islam Nurul (1997). The Non-farm Sector and Rural Development: Review of Issues and Evidences, FAED
paper no
Jha, B. (2005). Rural Non-farm Employment in India, A coordinated and consolidated unpublished report,
submitted to Ministry of Agriculture, GOI, New Delhi.
_____ (2006). “Employment, Wages and Productivity in Indian Agriculture”, IEG Working Paper Series No.
Kajale, Jayanti (2004). “Rural Non-farm Employment in Maharashtra”, Unpublished report submitted by
Agro-Economic Research Centre (AERC), Pune to the Ministry of Agriculture, GOI, New Delhi.
Kumar, Amalendu (2004). “Rural Non-farm Employment in Bihar”, Unpublished report submitted by AgroEconomic Research Centre (AERC), Bhagalpur to the Ministry of Agriculture, GoI, New Delhi.
Lanjouw, P. and A. Shariff (2002). “Rural Non-farm Employment in India: Access Impact and Poverty
Impact”, Working Paper Series N
Lipton, M. (1983) “Poverty, Undernutrition and Hunger”, World Bank Staff Working Paper No. 597,
Washington: World Bank.
Mahendra Dev, S (2000). “Economic Reforms, Poverty, Income Distribution and Employment”, Economic and
Political Weekly, Vol
Mellor, John W. (1978) The New Economics of Growth – A Strategy for India and the Developing World, A
Twentieth Century Fund Study, Ithaca : Cornell University Press.
Mishra, B. K. (2003). “Rural Non-farm Employment in Uttar Pradesh”, Unpublished reports submitted by
Agro-Economic Research Centre (AERC), Allahabad to the Ministry of Agriculture, GOI, New Delhi.
NABARD (1992). Refinance Assistance for Non-Farm Sector Activities, NABARD, Mumbai.
Nayyar, Rohini (1998). “An Assessment of Wage Employment Programmes”, in R. Radhakrishna and A. N.
National Sample Survey Organisation (NSSO, 1990). Results of the Fourth Quinquennial Survey on
Employment and Unemployment (All India), NSS Fortythird Round (July 1987- June 1988), NSS
-------------- (NSSO, 1997). Employment and Unemployment in India, 1993-94, NSS Fiftieth Round (July 1993June 1994), NSS Report no. 409, New Delhi.
--------------- (NSSO 2001). Employment and Unemployment Situation in India, 1999-2000, NSS Fifty-fifth
Round (July 1999-June 2000), NSS Report no
Papola, T.S. (1987). “Rural Industrialisation and Agricultural Growth: A Case Study in India”, in Islam
Rizwanul, (eds.) Rural Industrialisation and Employment in Asia, ILO / ARTEP, New Delhi.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay about Non Farm Rural Employment
  • The Rural Non-Farm Economy Essay
  • non farming activities in india Essay
  • Rural Non Farm Activities Essay
  • Essay about Farming
  • Rural Essay
  • Poulty Farming Essay
  • Farming Essay

Become a StudyMode Member

Sign Up - It's Free