Surge in Agricultural Employment

The number of Indians working in agriculture has risen significantly by 68 million between 2017-18 and 2023-24, reversing the earlier trend of workforce decline in the sector.

This shift, driven primarily by women workers and concentrated in economically weaker states, raises concerns about structural challenges in the labor market.

Factors Driving the Surge in Agricultural Employment

Economic Reversal:

Between 2004-05 and 2017-18, India saw a decline of 66 million agricultural workers.
This trend reversed between 2017-18 and 2023-24, with an increase of 68 million workers in agriculture.

Impact of the COVID-19 Pandemic:

Urban informal workers returned to family farms during lockdowns.
Despite economic recovery, agricultural employment continued to grow.

Employment Dynamics:

Agriculture acts as a fallback option due to insufficient non-agricultural job opportunities.

Gender Shift in Employment:

Women have significantly driven the rise in agricultural employment, with their numbers increasing by 66.6 million between 2017-18 and 2023-24.

Economic Conditions in Key States:

Economically weaker states like Uttar Pradesh, Bihar, and Madhya Pradesh have witnessed the highest surge in agricultural employment due to limited alternative job opportunities.

Concerns About the Increase in Agricultural Employment

Reversal of Economic Progress:

Normally, as economies grow, workers move from agriculture to manufacturing and services for better wages and productivity.
In India, this shift has reversed, showing challenges in economic growth and mobility.

Low Productivity in Agriculture:

In 2023-24, agricultural output was much lower compared to other sectors:
4.3 times lower than services.
3 times lower than manufacturing.

Stuck in Low-Wage Jobs:

Many workers remain in low-productivity agriculture jobs with limited chances for growth or better income.

Concerns About the Economic Impact of Rising Agricultural Employment

Economic Inefficiency:

The increase in agricultural jobs during GDP growth signals a failure to create enough jobs in more productive sectors like manufacturing and services.
This reflects structural issues in India’s economic policies.

Underemployment in Agriculture:

Many agricultural jobs are seasonal and low-paying, forcing people to work out of necessity.
Workers earn less and often work fewer hours than in other sectors, perpetuating rural poverty and inequality.
Overcrowding in agriculture reduces labor efficiency and slows innovation and mechanization.

Rise in Informal Employment:

The surge in agricultural jobs could lead to more informal employment, where workers lack legal protections, healthcare, and social security.
This makes them vulnerable to economic shocks and poor working conditions.

Gender Inequality and Wage Disparity:

Women are disproportionately affected, often earning less than men in low-paid, informal roles.
This widens the gender pay gap, weakens rural household income, and limits women’s opportunities in urban jobs.
Additionally, rural wages have failed to keep up with inflation, reducing agricultural workers’ purchasing power.

What Factors Contribute to India’s Insufficient Non-Agricultural Employment?

Stagnant Manufacturing Sector: Developed economies traditionally transitioned from agriculture to manufacturing and then to services (e.g., China, Korea).

India, however, deviated by highly relying on service sector growth, with manufacturing output and employment stuck at 20%, constraining job creation.

While the Production Linked Incentive (PLI) scheme aims to generate 60 lakh jobs over five years, it is production-focused rather than employment-focused.

Service Sector Growth Challenges: India’s service sector is polarized, with high-tech services (Artificial intelligence, and Data analytics) generating output growth but low-skilled services(customer service roles) creating most jobs.

Domestic demand for high-tech services is low due to sluggish industrial growth.

The Economic Survey 2023-24 notes that Generative AI (GenAI), is poised to disrupt sectors like Business process outsourcing (BPO), potentially reducing employment opportunities over the next decade.

Skill Deficit and Education Quality: India produces 2.2 million Science, Technology, Engineering, and Mathematics (STEM) graduates annually, yet many remain unemployed due to poor educational quality.

Approximately 8-10 million new workers enter the job market annually, with aspirations unmet by available job opportunities.

With a median age of 28, India faces mounting pressure to create high-value jobs to avoid turning its demographic dividend into a burden.

Informal Economy: The rise in informal sector workers post-pandemic reflects economic distress, where workers likely turned to informal work due to the absence of formal employment options.

Q. Disguised unemployment generally means (2013)

(a) large number of people remain unemployed

(b) alternative employment is not available

(d) productivity of workers is low