Livelihoods, Inequality and Ecologically Sustainability

The Problems of Livelihoods, Inequality and Ecologically Sustainability in India

The challenge is to imagine a path in which the fruits of technological progress are more widely enjoyed and in which the economy provides remunerative, stable and meaningful work that allows human capacities to flourish. The first five decades of India’s independent existence saw some concerted effort to push such an imaginative transformation…. These policies, however, ran aground and had limited success at best in generating large scale and meaningful growth and employment. Unfortunately, India’s move to a more market-oriented economy, while tremendously successful at generating more sustained growth has not done any better in terms of widespread employment generation.
State of Working India 2018, Centre for Sustainable Employment. Azim Premji University. Page 149.
“IN EARLY 2017, the West Bengal government held an examination for 6,000 jobs in the Class IV or Group D category, the lowest category of permanent employment in government service. 2.5 million appeared for the exam, many of the holders of graduate and postgraduate degrees. In 2015, 2.3 million applied for around 400 Class IV jobs in Uttar Pradesh, of them 150,000 (were) graduates.”
State of Working India 2018. Page 44.

I personally struggle with a definition of growth as ever-increasing wealth and luxury, growth that consumes our natural wealth and gives us rupees and consumer goods in return. Rabindranath Tagore puts this in his inimitable prose in his 1922 talk in Calcutta ‘Robbery of the Soil’  which sounds as valid today as it was then, which says something about his timelessness and the vapidity of our civilisation:

“Most of us who try to deal with the poverty problem think of nothing else but of a greater intensive effort of production, forgetting that this only means a greater exhaustion of materials as well as of humanity, and this means giving a still better opportunity for profit to the few at the cost of the many. But it is food which nourishes and not money. It is fullness of life which makes us happy and not fullness of purse. Multiplying materials intensifies the inequality between those who have and those who have not. This is the worst wound from which the social body can suffer.”
“Civilisation today caters for a whole population of gluttons. An intemperance, which could safely have been tolerated in a few, has spread its contagion to the multitude. ….The city represents energy and materials concentrated for the satisfaction of an exaggerated appetite, and this concentration is considered to be a symptom of civilisation”

Equally, the problem of livelihoods remains as urgent and existentialist for our hundreds of millions as it was then when we were ruled by an uncaring British. Jobs are the most difficult thing to find in independent India, while ecologically sustainable livelihoods are being lost at a frenetic pace in the modern, fossil-fuel, chemical world we are constructing.These dual issues – of nature weighed under by the greed of the human species, and the endemic deprivation of hundreds of millions – are enough to give pause to the bravest of us. This report from Premji University is a timely review of the many aspects of livelihoods, and worth our while to understand the changing face of the universe of jobs in India. Amit Basole teaches at the Azim Premji University in Bangalore, leading the Center of Sustainable Development which commenced publishing an annual 165 page report from this year ‘State of Working India 2018’ (henceforth SWI). An unusual double Ph.D. in Economics from University of Massachusetts and a Ph D in Neurobiology from Duke, Amit worked with the weaving communities of Banaras and understands the value of artisanal knowledge he calls lokavidya.

Like many of us, I face frequent requests for jobs भाई साहब, मेरे बेटे को नौकरी दिला दो in the villages I frequent in Uttar Pradesh and Haryana. The person could be brother, nephew, uncle or husband (rarely a request for helping a woman), and those who ask, believe in my ability to help them navigate the world of the city where the jobs are, though alas! My rehearsed response is मुश्किल है, पर कोशिश करूंगा. Where I can, and when the candidate is motivated, I’ve helped a few obtain apprenticeships that lead to jobs in peri-urban factory settings and in the software services industry. But it’s difficult, very difficult.

The Purpose of Development and Livelihoods

My first thoughts after perusing this report were on the boundary of the discourse economists, our political and bureaucratic leadership, and the media limit our thinking to: development’ as a utilitarian search for GDP growth and employment, and – shorn of its benign word meaning – a race to corner the greatest material benefits for those who already have so much more than they need. We have given up on the environment altogether, do not think about it as an issue, and generating wealth and consuming it in increasing ostentatious ways is all what matters. This lifestyle is within the grasp of a minuscule wealthy minority, and the rest are aspirational for that very lifestyle leading us collectively to the environmental disaster that is unfolding. Most of us don’t know that it is our lifestyles that are causing this destruction, or if we do then we don’t quite know where to turn to for solutions. First, however, we must know the size of the problem and its characteristics and that is where this report is very useful.

In our own times, there are many markers of development gone wild. To pick a singularly gross one randomly – this front-page feature article in the New York Times of 26 November 2018 starkly juxtaposes livelihoods against the environment “Palm Oil Was Supposed to Help Save the Planet, Instead it Unleashed a Catastrophe”.In 2007, USA President George Bush Jr. mandated the use of bio-fuels to reduce the dependence of the US on middle eastern oil and set off the largest ever destruction of the peatland rain forests of Indonesia and Malaysia for growing Palm for oil. Only today do some Americans acknowledge the destructive global impact of this decision that was applauded across political divides in the USA, but it is too late for those 80 million Indonesians who now depend on palm farming for livelihoods and for tens of thousands of hectares of tropical forest burnt down and its peat oxidised.  https://www.nytimes.com/2018/11/20/magazine/palm-oil-borneo-climate-catastrophe.html

“NASA researchers say the accelerated destruction of Borneo’s forests contributed to the largest single-year global increase in carbon emissions in two millenniums, an explosion that transformed Indonesia into the world’s fourth-largest source of such emissions. Instead of creating a clever technocratic fix to reduce American’s carbon footprint, lawmakers had lit the fuse on a powerful carbon bomb that, as the forests were cleared and burned, produced more carbon than the entire continent of Europe. The unprecedented palm-oil boom, meanwhile, has enriched and emboldened many of the region’s largest corporations, which have begun using their newfound power and wealth to suppress critics, abuse workers and acquire more land to produce oil.”

 

India’s Rapidly Urbanising Population: Is This Desirable?

1951*
2011*
2050**
Urban
   6,24,32,131
17.3%
37,70,96,270
31.2%
   92,60,13,686
56%
Rural
  9,86,55,959
82.7%
83,30,97,152
68.8%
   73,05,40,314
44%
Total
36,10,88,090
1,21,01,93,422
1,65,65,54,000
Sources: * Census of India. ** https://www.researchgate.net/publication/258165564_The_future_of_India’s_urbanization

When we lay out the state of livelihoods in India to find work for our species, we forget the other living beings with whom we share physical and spiritual space. We rarely envision the world we will leave behind even 50 years hence. What would be the state of our environment, natural and man-made urban, when over 50% of our population lives in cities in 2050? I was taken up by Aseem Shrivastava’s argument in the Economic & Political Weekly of 16 July 2016. (Also https://www.thehindu.com/opinion/op-ed/facing-the-future-of-development/article23505889.ece)

“To spell it out … not only would poverty have become a thing of the distant past by 2041, and prosperity and well-being the general norm, some 75%–80% of India’s population of 1.6 billion, which is to say some 1.2–1.28 billion people (the entire population of India at the moment) will find itself living in cities. Finance ministers in both Congress-led United Progressive Alliance as well as BJP-led National Democratic Alliance governments have shared this hope. What would this mean in concrete terms? In urban and metropolitan India, it would mean that a miraculous 200 million additional jobs will be created in the next quarter century, at the rate of 25 million new jobs every year. As pointed out earlier, we are already an order of magnitude behind the asking rate of job creation for the rapidly growing workforce since 1991. It would also mean that our cities are suddenly able to provide the enormous infrastructure— of clean air and water, sanitation and power, roads and communication, housing and security—for some 800 million more people!”

Society has no thinking that ties together economic development with the preservation of nature – consume less & responsibly to retain clean air, water, forests and soil. In fact, agriculture in India is in deep ecological distress, having moved as far as possible from a mimicry of natural forests – our soil devastated by chemicals and mono-crops grown repeatedly for cash instead of nurturing food. Instead of moving towards healing foods, we slide towards an even more poisoned, chemical future. India has clearly broken with its organic connections with nature that are, even today, a signal presence in every aspect of our various Hindu and Tribal traditions. A weak social conscience flickers in the fast onto death of sadhus in Haridwar against the damming of the Ganga, but society basks in its ecological destruction.

I thought that we made a grave mistake by a wholesale adoption of materialist Marxist thought and structures after Independence without evaluating their relevance to the agricultural Indian milieu, and now our wholesale capitulation to materialist Capitalist ideology that is also leading us to headlong urbanisation is equally disastrous in a world gone mad with consumerism. Indian society lurches in a drunken stupor from one ideological extreme to another, altogether forgetting Gandhi and the alternative paths he had showed us. My grandfather Charan Singh had developed on elements of Gandhian thinking – the village and crafts – to establish a middle-path economic development framework. It yet remains as valid today as it was in the Seventies and Eighties, but as few are willing to listen now as they were then. I will come back to this part of my argument in the last section on crafts.

The Changing Structure of Sectoral Employment in India

 
Labor Force ~
GDP (Rs Crores)
 
1950
2015
1950
2013-14
Agriculture *
64,847,877
20,39,92,500
5,199
8,00,548
 
69.7%
46.1%
52%
14%
Industry **
12,088,076
9,64,65,000
1,496
15,00,225
 
13%
21.8%
15%
26%
Services ***
16,049,245
14,16,00,000
3,337
34,41,017
 
17.3%
32%
33%
60%
Unemployed
15,00,000
3,30,00,000
 
Total Labor Force
91,500,000
44,25,00,000
10,036
57,41,791
Population
36,10,88,090
121,01,93,422 (2011)
*Agriculture, Forestry & Fishing ** Manufacturing, Construction, Mining and quarrying, Gas, Electricity, Water Supply *** Services: Unorganised Services are 55% of all service sector employment, 17% of total employment. Petty retail, Trade, Hotel, Transport, Domestic workers. Organised Services: Big retail, Trade, Transport, Hotels & restaurants, IT/BPO (2.77 million in 2012, too small to matter), Education, Health, Public Administration, Financial services, Post & Telecommunications, Security Services.
~ 1950 https://www.epw.in/system/files/pdf/1964_16/4/working_population_of_india.pdf. 2015-16 Government of India, 5th Annual Employment Survey

47% of India’s population is occupied solely in agricultural and lives off only 14% of the nation’s GDP, while 32% of the population in the newer occupations of Services garners 60% of the GDP. As SWI points out,[1] the mismatch between share of GDP and share of employment is a feature that has become starker every decade since 1950.

Today, the vast difference in the quality of life of a Scheduled Caste woman working as an itinerant agricultural labourer in a village in Bihar earning less than Rs. 2,000 a month and that of the lowest grade of government employee in the city of Delhi earning Rs. 18,000 a month (with benefits) is simply inexcusable. What is perhaps equally unfortunate is endemic poverty and deep inequality that exist in India are not a part of the awareness of our elite.

I believe this is because we did not invest in agriculture nor invest adequate efforts in land reform in the decades immediately after Independence, and we neglected universal primary education and universal primary health care. Collectively, these investments would have reduced the growth of our population, provided purchasing power to the villages that would in turn have generated the demand to develop the secondary (manufacturing) and tertiary (services) sectors. In addition, we missed the equality, employment and environmental bus because we did not invest in village level micro (‘cottage’) industries, including traditional hand-crafted occupations. The elite in India have leapfrogged into the fossil fuel driven economy of Europe and the USA, while the vast majority is forgotten behind. The ‘bullock cart economy’ as a euphemism for rural India is not a pejorative as far as I am concerned, the use of this low energy non-fossil fuel vehicle symbolises an approach that may very well have solved many of our long-term problems.

Increasing GDP growth does not equal a proportionate number of jobs created.

Growth rates in Employment and GDP: Fewer Jobs than Before [2]

Year
1972-77
1977-82
1982-86
1986-93
1993-99
1999-2004
2004-09
2009-11
2011-15
Employment %
2.6
2.1
1.7
2.4
1.0
2.8
0.1
1.4
0.6
GDP growth %
4.6
3.9
4
5.6
6.8
5.7
8.7
7.4
6.8

“The percent change in employment for every percent change in GDP captures the effectiveness of GDP growth in delivering employment growth. … Unfortunately, even as GDP growth rates have risen, the relationship between GDP growth and employment growth has become weaker over time.”[3] As the time series data above makes obvious, the last 15 years have been the worst period for growth in employment even as the national GDP grew the fastest it ever has in the history of British and Independent India. Employment in manufacturing, for example, has stagnated for over the last 25 years between 10-13% of the workforce. [4]

If robust GDP growth creates far fewer jobs than it did earlier, mustn’t we ask who is this GDP growth serving? If the industrial and service sectors of the economy are growing robustly at the gross level, but employment is not, then who is taking home the additional income from greater economic activity and enhanced labor productivity? In short, isn’t GDP growth India leading to increased inequality?
Is GDP growth then – by itself – a relevant measure of a people’s prosperity, in its fullest sense, rather than a measure of the prosperity of the organised private and public sector that constitutes less than 10% of the Indian population?

This is a stunning and simple analysis, and it should change the perspective of those who believe we can follow the China model of the 1980s to become the manufacturing base of this century with an ever-increasing portion of our workforce employed in manufacturing. What these data points say is even if we did get lots more manufacturing to move to India, it would enhance GDP growth and create some new jobs – but it would not increase the proportion contribution of this sector to overall employment, and it would certainly increase income inequality in the bargain.

Organised manufacturing grew its share of total manufacturing from 18% in 2011 to 27.5% in 2015. This, in effect, cannibalised the share of unorganised, smaller-firm manufacturing. Corporate profits have widened as in the 15-year period till 2015, output went up 15 times with [only] a doubling of employment. [5]

The Kuznets-Lewis transition in economics is understood, as SWI tells us, to be two-fold: from agriculture to more productive manufacturing and services, and from ‘disorganised’ (self-employed, micro enterprise) to the ‘organised’ (corporate, capitalist) sector.  This movement has taken place in a few economies in Asia – Japan, Korea, Taiwan, and China – but does not hold for most nations today including India whose movement is lateral or perhaps a few steps backward. In the transition from agriculture, construction has created more jobs than manufacturing and services: this now employs 50 million workers, equal to the entire manufacturing sector. Construction is today the largest rural employer after agriculture.[6] Ironically, this massive increase in this energy and raw material intensive sector is having the most visible and negative ecological impact as our nation pollutes its way to higher income status. Massive quantities of polluting fossil fuels and raw material is unsustainably mined to feed the brick kilns, plastic, cement, glass, aluminium and steel factories whose output goes into constructing the modern homes, offices, highways, airports and seaports that are the mainstays of our modern economy.

“The transition from an agrarian and subsistence-oriented informal economy of self-employed micro-entrepreneurs to a growth-oriented industrial and service economy consisting of large firms and regulated employment has been delayed.”[7] To my mind this transition will never take place fully in India, and we must adapt our strategies to a unique model relevant to Indian conditions rather than one based on others  experiences. There simply aren’t enough manufacturing and service jobs in the world to feed our vast army of underemployed and unemployed men and women, even if we could invite them into the country which we cannot.[8] We have witnessed the dramatic curtailing of employment in the IT and BPO sector in India (new employment in this once forever sunrise industry is down from 250,000 a year to 100,000), partly due to protectionist factors in the rich customer nations and partly due to equally dramatic changes in technology where human intervention in commerce and production is being reduced to the very barest minimum. Even though the 3 million IT/BPO employees form a minuscule 0.7 percent of the employment universe in India, the industry is a bellwether for export-oriented service industry and the hope of the Indian middle classes. Here too, as in manufacturing, there is a de-coupling of headcount and productivity due to the heavy application of 4IR technologies and the constant pressure of adequate return on capital to shareholders. In effect, our gifted software engineers are working very hard to automate and eliminate the jobs of their own brethren in the coming decades. This is not, by any means, to belittle the many contributions of the IT/BPO sector to India’s place in the world of technology – it is simply a reality.

SWI asks two critical questions at this stage where it recognises the fracture of this process: the first of social equity, that is, for whom are the Kuznets and Lewis jobs being created? This question has been asked often and disregarded by the elites since 1947 as the Kuznets-Lewis movement served their purpose and that of their children. And second of ecology: what would these jobs and economic activity do to the natural environment we inhabit? [9]

SWI goes on to state something exceptional, one that I find heartening “Rapid improvement in farm incomes will not only have immediate welfare implications for half the workforce, but it will improve working conditions in the rest of the economy as well.” [10] Making the village wealthy will create demand for the products of the manufacturing and services sectors, as I have argued elsewhere in this document.

We need to simultaneously reimagine the inevitability of urbanization, the fleeing of rural India, and the re-construction of our villages. In 1928, on the seventh anniversary of Sriniketan, Tagore stated his goal of creating a model for village uplift …

“If we could free even one village from the shackles of helplessness and ignorance, an ideal for the whole of India would be established…Let a few villages be rebuilt in this way, and I shall say they are my India. That is the way to discover the true India.”

Unemployment in increasing, especially in the educated and in the youth, particularly in the Northern states of India.

In India, employment means self-employment – over 90% of all working men and women above the age of 15 people work for themselves and by themselves. ‘Formal’ jobs with job and social security – that is, employment with a written long-term contract providing health care, potential for savings, health and pension benefits – are variously estimated to be between 7 to 9% of the total Indian workforce. Clearly, there is a vast differential between the organised and unorganised sectors, leading to a very skewed urban-rural inequality.[11] The formal jobs are overwhelmingly situated in the urban areas, roughly equally split between the government (the bureaucracy at the state and central, public sector corporations, and massive employers like the armed forces and the railways) and private sector corporations big and smaller. These few wage workers are the most privileged of the Indian people.

Population, Labour Force and Workforce in India [12]

Year
Population >15 years in millions
Labour Force Participation Rate (LFPR) %
Labour Force Millions
Unemployment rate %
Unemployed Millions
Workforce Millions
1951
226
41.8
94.5
NA
2.5 (estimate)
91.5
2015
926
50.3
465.8
5
23.3
442.5

The unemployment rate is up from 2.7% in 2011, the highest for the past 20 years.[13] 9 million of the 23.3 million unemployed (those who have not found a job after 6 months of seeking) have a graduate or higher level of education.[14] These graduates are 38% of the unemployed, but only 10% of the working age population.

Unemployment rate in Graduates is three times the national average of 5% [15]

Not Literate
Literate Below Primary
Primary
Middle
Secondary
Higher Secondary
Certificate Course at UG level
Diploma at UG level
Graduate
Post Graduate and above
2%
1.8%
2.4%
3%
4.2%
7.4%
11.3%
11.1%
16.3%
14.2%

India has 55 million people in the labour force with graduate or higher degrees, indicating 16% of this class is unemployed: three times the national unemployment rate of 5%.

Youth, Male & North Indian over-represented in the Unemployed

  • 60% of the 23.3 million unemployed are in the 15-25 years age bracket, though they form only 30% of the total working age population.
  • 60% of all the unemployed are men.
  • 5% of the 15-25 years old are unemployed

Unemployment rate in the 15-25 years old is three times the national average of 5% [16]

15-25 years
26-35 years
36-45 years
46-55 years
56-60 years
Above 60
16.5%
4.7%
1.4%
0.8%
0.9%
0.7%

What will happen when those who are currently enrolled in higher education join the labour force? The national education gross enrollment ratio (GER) moved from 12% in 2005 to 24.5% in 2015.[17] Uttar Pradesh, with a population of 220 million, has grown its GER at 7%, almost twice the national average of 3.7% which implies many more poorly educated Graduate youth without anything to do in the most densely populated and communally sensitive state in India. You don’t need much imagination to foretell the potential for social disruption.

 Quality and Purpose of Education

 The modern school and college system graduates youth singularly unprepared for jobs in the very manufacturing and service sectors of the economy they are ostensibly being educated for. SWI quotes authoritative studies which conclude that only 7% of all engineering and business school graduates are suitable for employment.[18] No one obtains an education and remains in agriculture. So, we educate our rural youth to move away from what they have in whatever small way and move towards a future that rejects them.

Should we really be educating all our youth for jobs in factory manufacturing and other urban services – jobs that are either in scarce supply, and will become even more so because of the ongoing 4th Industrial Revolution and the global trend of the substitution of labour by capital, or jobs which need new skills that the education system does not impart?
What livelihoods should we be preparing our youth for, and how? Are there pointers for us in the apprenticeship-internship model or on-the-job Guru-Shishya model?
On the other hand, should education be focused solely (or mainly) on skills and employability, however relevant and appropriate this may be, or should education have a higher purpose of social cohesion and building questioning boys and girls of character who, if not one with nature, are at least mindful of it in every sense?

SWI and Amit Basole point out the problem of the contemporary ‘unskilled and educated’ workforce in parallel with the older issue of the ‘skilled and uneducated’ workforce.  The conundrum in the first case is there are fewer jobs for the higher educated youth than there are educated, and the ones who are formally educated are not adequately skilled to fit the fewer jobs that are becoming available. Additionally, the educated (even the ones poorly educated) are aspirational and look down on traditional occupations that employed a labor-intensive skill and provided the worker a subsistence living. In the second case, instead of providing literacy to skilled artisans and peasants to be more productive and innovative artisans and peasants we are de-skilling these traditional occupations by providing a colonial education that tries to prepare them for jobs that don’t exist.

We need fewer – and more appropriately skilled – higher (college) educated. We also need the vast majority adequately literate, with numeracy and critical thinking, possessing appropriate craft skills needed for livelihoods using their hands and minds. Last, we need to merge this system of education with our myriad traditional systems of knowledge that included a deep respect for nature.

Agriculture, the Largest Employer, remains in Perpetual Crisis

At 47% of the workforce, agriculture remains the largest single employer in India as it has been for millennia. The proportion of people employed in agriculture drops every year, most of them moving to an equally precarious livelihood in construction, and 47% of the people live on 14% of GDP. Never in the history of our nation have so many lived on so little a share of the national pie.

“There has always been lack of equilibrium, rather a sort of antagonism between cities and the countryside. This is particularly so in our land where the gulf of inequality between the capitalist class and the working class pales into insignificance before that which exists between the peasant farmer in our village and the middle-class town dweller. India is really two worlds-rural and urban. The relationship between the countryside and the cities is, therefore, a vital problem to us.”
Charan Singh. India’s Economic Nightmare. 1984, pg. 212

The neglect of investment in agriculture since the Second Five Year plan in favour of large, Soviet-style industrialisation continues today: “public investment in agriculture was 3.8% in 1992, 2.2% in the late Nineties, to 1.7% in 2005. While the share in GDP has gone up from its 2005 low, it is still well below the level reached in the early 1990s.” [19] Investing in agriculture – seeds, cattle, manure, irrigation, storage, local markets, extension services – makes selfish sense for the rest of India’s economy and population: enhanced rural prosperity will increase the demand for city manufactured products and services. Enhanced rural income will reduce migration to the city that reflects rural distress and is a burden on our cities. Enhanced agricultural production will also create a deflationary effect on food prices for the city dweller. What is there not to like in this scenario?

None of this investment should take away from the need for spreading natural, agro-ecological farming practices that bring back crop bio-diversity and mimics nature’s rhythm as it did prior to the 1960s when traditional ‘non-scientific’ subsistence farming methods were in use. I do not recommend more chemical fertiliser factories, more pesticides, more high yielding seeds that are water intensive, more cash crop farming, more monoculture cropping. The problems of rice stubble burning in Punjab for example will go away if Punjabis dramatically reduce rice production, and grow diverse crops instead – millets, oilseeds, lentils, corn – as they did till the 1950s. That is a story by itself, one of reimagining agriculture as an uplifting human endeavour that enables us live in harmony with nature and its many living beings. Investment in agriculture must be made for generations to come, but it remains a short-term profitability exercise that extracts ‘production’ and destroys our forests and rivers and returns nothing to the soil.

Why are the Privileged Agricultural Classes Unhappy? Gujars, Jats, Marathas, Patels are relatively well-to-do, socially dominant middle castes in rural Western and Northern India, known for their farming prowess and peasant work ethic. Why have these privileged farming castes agitated violently so often in the past decade not for higher farm prices and lower inputs but instead for reservations in government jobs?

Agriculture entails a life with hard physical work, inter-generationally fragmented land (80% of all farm holdings in India are now less than 1 hectare in size, just 2.5 acres), unremunerative prices, increasing input costs, reducing income and the localised impacts of global warming. Every small to middle peasant farmer, 2.5 to 10 acres, wants out of farming and an entry to a regular wage job. Ideally, he would like both. A government job is security for life with a good wage, without being accountable, access to good education for the children, life-long health benefits, housing, opportunity for annual savings, and a pension. With fewer jobs (government jobs have remained static for decades) the competition is fierce – these farming castes lose out to the higher castes due to their lack of education, and to the lowest castes due to job reservations scheme in force since Independence. Caught in between, they fight for what they can strong arm from the political parties in power. Well-paying jobs in the formal manufacturing and emerging service sectors are even more competitive and need higher education and specific skills which these rural middle castes often do not possess.

Unremunerative agriculture, lack of alternate livelihoods, insufficient higher education (50% of all graduates and post-graduates are upper caste [20]) as well as fundamental changes in the very nature of work has led these middle castes to agitate for government jobs – to the extent of wanting to be classified as ‘lower’ castes (Other Backward Castes) for the purposes of employment. The poorer castes, not as assertive and with marginal land holdings, vote with their feet and migrate across the country in search for those very hard jobs in construction or petty manufacturing. There is no future in the village, they flee to the city.

Capital and Technology are Transforming Manufacturing. And Why Manufacturing is not the Panacea for Employment

Manufacturing labour is a relatively smaller part of India’s entire labour force (11%) and organised labour is even smaller at 3%. [21] The share of Manufacturing employment has remained static at between 10-13% due to technological and other reasons.[22]  It is important we keep this relative importance of Employment in Manufacturing in India when we look for solutions to enhance overall employment.

Workers per 1 Crore Invested Capital in Manufacturing: Substitution of Labour for Capital  [23]

 
Un-organised Sector
Organised Sector
 
Own Account Enterprise
Family based Enterprise
Establishments
(small firms)
Factory
1994
1,559
4,615
877
33
2015
656
702
248
8
Reduction
58%
85%
72%
76%

In a labour surplus nation – with 33 million unemployed – capital continues to rapidly substitute labour in in both capital and labour intensive sectors of the economy. Rupees 1 Crore of real (2015 rupees) fixed capital supported the creation of 90 jobs in the organized manufacturing (factory) sector in 1983, which fell to 33 in 1994, and to 8 in 2015 – a reduction of 91% in 32 years. This trend is visible across the entire spectrum of manufacturing – new automation technologies enable micro to large manufacturing establishments substitute labour with capital.

“The result is that a labour-abundant economy has diversified into skill-intensive and capital-intensive sectors.”[24] We have truly put Gandhi’s economy of small producers and small consumers in multiple small economies to rest and are on the path of capital-intensive growth that Nehru and his Soviet-inspired Socialist advisors chose for the nation after 1947. Instead of the large public sector firms of that era, it is the large private corporations of today that claim the ‘commanding heights’ of the economy and society.

Labour productivity in both the organised and un-organised sectors has diverged from wage increases. In the organised manufacturing sector, for example, labour productivity has grown 6 times since 1982, but labour wages have grown only 1.5 times. Managerial compensation has grown faster at more than two times, as has company profitability. [25] As labour productivity has increased over the decades, capital has retaining the largest chunk as profits. This is bad for income equality, and bad for growing employment in manufacturing.

The so-called Fourth Industrial Revolution – artificial intelligence, the internet of things, robotics, bio-technology, genetic engineering – is reducing employment in manufacturing and services across the world. India has the same multinational corporations that produce globally, and they are clearly increasing automation in their businesses and reducing employment. This technological osmosis will increasingly filter to domestic and smaller firms in India, further eliminating the human element in organised work in manufacturing, services and agriculture.

Another way for companies in the formal sector to increase profitability is lower-paid labour contracting, which also reduces administrative headaches that come with an increasing workforce. Today, 30% of all workers in organised manufacturing are Contract (or apprentice, trainee) labour, and contract labour constituted a huge 44% of all additional employment between 2000 and 2014. As of today, 37% of workers in Chemicals and 47% of workers in Automobiles are on contract. [26]

Besides the dramatic reduction of labour employment per unit of capital deployed, SWI brings to our attention the decline of wages as a share of manufacturing “Taken together, these trends, namely rising capital intensity and growing divergence between productivity and wages, [as well as contracting, lower paid female workers, and more hours of work per day] are expected to cause a fall in the share of value-added going to workers in the form of wages and emoluments, with the bulk going to owners of capital …. The share of wages in organised manufacturing fell steadily from a high of over 35% in 1983 to a low of just under 10%, a very large drop.” [27]

Poverty, Inequality and Gender discrimination hits India’s rural population particularly hard.

While India remains an overwhelmingly rural society with 69% of the population residing in the villages, the urban bias of resource allocation is visible in the imbalance of higher-paying occupations in the cities and the lesser-paying and harder manual work in the rural areas.

Indian Workforce (above the age of 15) 2016 ~

 
Population
Agriculture
Manufacturing & Construction
Services
Rural
69%
59%
20%
22%
Urban
31%
8%
29%
63%
All India
100%
46%
22%
32%
~ Some figures rounded. Fifth Annual Employment–Unemployment Survey 2015-16, Volume 1. Government of India, Ministry of Labour & Employment. http://labourbureaunew.gov.in/UserContent/EUS_5th_1.pdf. Rural Urban Distribution of Population, Census 2011. 15 July 2011. http://censusindia.gov.in/2011-prov-results/paper2/data_files/india/Rural_Urban_2011.pdf

Household Average Monthly Earnings: Urban and Male Bias #

 
< Rs. 5,000
5,001-7,500
7,501-10,000
10,001-20,000
20,001-50,000
50,001-1,00,000
 
>Rs. 1,00,001
 
All India
22%
25.4%
20%
20%
11%
1.8%
0.2%
Men
43%
24.5%
15.9%
11.4%
5.44%
0.46%
0.08%
Women
71.2%
13.75%
7.2%
4.68%
2.83%
0.28%
0.04%
 
Rural
27%
29.6%
20%
16%
6.3%
0.7%
0.1%
Urban
9.3%
15.3%
20.3%
28.3%
21.7%
4.4%
0.6%
# Some figures rounded. Fifth Annual Employment–Unemployment Survey 2015-16, Volume 1. Government of India, Ministry of Labour & Employment. Page 19. Gender extrapolation from SWI 2018 Page 128. http://labourbureaunew.gov.in/UserContent/EUS_5th_1.pdf. *Mean household size is 4.8 people, http://www.censusindia.gov.in/2011census/hh-series/hh01.html
  • 2% of all Indian households earn more than Rs 50,000 a month. 75% of these households live in the city.
  • 93% of all rural households earn less than Rs 20,000 a month. That is, less than Rs 4,000 monthly per individual on food, clothes, shelter, health, education, marriage and entertainment. These constitute 73% of all households in India.
  • 22% of all of India’s households earn less than Rs 5,000 a month, on or below the poverty line of Rs 30 a day. 86% of India’s population earning less than Rs 1,000 a month per head, or 223 million people, live in the villages.
  • 87% of India’s households are paid less than the minimum salary defined by the Seventh Pay Commission of Rupees 18,000 a month.

Caste Representation in Occupations

Representation Index (% in occupation / % in workforce)
Elementary Occupations
Skilled Agriculture
Craft & Trade
Plant & Machine
Personal Services, Sales & Security
Senior Officers & Managers
Technical & Associate Professionals
Clerks
Professionals
Average Monthly Income (Rupees)
4,014
5,646
6,854
8,234
8,803
13,633
142,67
15,952
20,056
Scheduled Castes
1.5
0.75
1
0.9
0.75
0.5
0.6
0.6
0.5
Upper Castes
0.6
1
1
1.1
1.25
1.5
1.5
1.5
1.75
A value of 0.5 indicates that the percentage of that group is half their representation in the population. SWI 2018, Page 133

The Scheduled Castes and Tribes are heavily represented in the lower paying elementary occupation, while the upper castes are heavily represented at the top end in occupations that pay 5 times as well.

Gender Discrimination

Literacy Rate

Male
Female
Rural
79%
59%
Urban
90%
80%
Rural Urban Distribution of Population, Census 2011. 15 July 2011. http://censusindia.gov.in/2011-prov-results/paper2/data_files/india/Rural_Urban_2011.pdf

Not surprisingly, women’s labour at home and in the fields is not counted as ‘work’ which is only measured in economic terms that require wage being exchanged for labour. “These activities and groups are ‘outside the labour force’: [28] Attended educational institutions, Attended only to domestic duties (NSS Code 92), Attended to domestic duties and was also engaged in free collection of goods (vegetables, roots, firewood, cattle feed etc.) (NSS Code 93), Sewing, tailoring, weaving etc. for household use, Rentiers, Pensioners, Remittance recipients, Others (prostitutes, beggars etc.), Did not work due to sickness, Children 0-4 years.”

On the other hand, those women who do participate in the paid labour economy are discriminated against:

  • Only a minority of women work for wages: women constitute 22% of manufacturing jobs (both organised and un-organised sector), and an ever smaller 16% of all service sector jobs.
  • Wage discrimination is rife: women earn ranging between 35% and 85% of men’s earnings; with 65% on average.

There is something very wrong with our ‘work’ measurement system where being paid is core and not looking after the children, the home and many aspects of rural life.  I, for example, am not unhappy that women are not uprooted from their rural homes and employed in distant factories, though there is no reason to have them less than 10% in high paying urban jobs in finance, insurance and real estate. Must we look for measures of a women’s self-worth that solely emulate advanced post-industrial societies or is there value in their work that must be acknowledged in the context of the society they live in, and this same work made easier and freed from patriarchy.

Patriarchy in the Western and North-Western states shines through: the participation rate (PR) of women (ratio of female to male participation in the labour force) in the labour force is lowest in the country in Uttar Pradesh, J&K, Punjab at 0.15 and 0.16, In fact, Punjab and UP have only 11% of their women in the labour force. PR in Bihar, Delhi and Haryana is 0.18 to 0.20; while the Southern and NE states range between 0.40 to 0.76.

If household work and unpaid subsistence work in the fields were considered for women, these ratios would come to par or indeed more than men’s contribution. On the other hand, women’s participation rate in the workforce would improve if (a) more time suitable (fitting in with their domestic unpaid responsibilities) and physically proximate paid work were available (b) social restrictions imposed by patriarchy on women were removed, especially in the Western and NW states or (b) they were able to find time from their ‘unpaid’ domestic duties by men helping. [29]

Another aspect of rural employment in general and women’s work in particular – an aspect few know about – are the multiple occupations a woman might work at to earn a livelihood. These range from daily labour wage work, MNREGA work, animal husbandry, agricultural work, stitching, handloom weaving, sand mining, brick kiln, mid-day meal cooking.[30] While work wages are low and precarious, even this comes after much struggle from multiple itinerant occupations. This is a unique feature of employment for both men and women across our rural areas, with the burden falling disproportionately on women.

Within this generally grim picture, there are some spots of optimism. The female-male ratio in primary teaching rose from 23.5% to 51.3% and from 13.6% to 33.3% in secondary teaching in between 1993 and 2011.[31] This was due mainly to government flagship schemes, but a ‘large number were on contract and not regular employees of the government’. There were large increases in health workers (doubling to 288,000 in 2011) (National Health Mission, ASHA workers) but with far below minimum wages, and all on contract.

 Endurance of Caste at Work

 Distribution of Indian Households by Social Groups

 
Rural
Urban
All India
Scheduled Castes
23
13.7
20.3
Scheduled Tribes
11.4
4.6
9.4
Other Backward Castes
40.4
40.2
40.4
Others (upper castes)
25.1
41.5
29.9
Fifth Annual Employment–Unemployment Survey 2015-16, Volume 1. Government of India, Ministry of Labour & Employment. Page 14.  http://labourbureaunew.gov.in/UserContent/EUS_5th_1.pdf.

 SC and ST groups are over-represented in low paying jobs, and severely under-represented in the high paying occupations. ”Upper caste groups are over-represented among professionals, managers and clerks …. Occupations requiring higher levels of formal education.” SCs earn slightly more than half (56%) of upper caste wages, OBCs earn 72%. [32] “In general, these gaps are larger in the self-employed category, for intermediate levels of education, and in the unorganised sector.” [33]

Upper caste groups are over represented (as compared to their share in the population) in occupations requiring higher education by 25% to 65%: professionals, clerks, technical and associate professionals, senior officials and managers, personal services, sales and security. Lower castes and OBCs are over-represented at the other end of the spectrum: elementary occupations and agriculture. In leather manufacturing, for example, SCs are 240% of their share of the population. SC & ST, as to be expected, are better represented in public administration due to long-standing affirmative action policies.

Hence, the rise in job quota agitations by the middle castes can be seen as an affirmation of the success of affirmative action (reservations) in government jobs and in higher education both of which are positively associated with higher earnings.

SWI does not have religious community-based information as there is none in the voluminous reports put out by government. This is unfortunate, as religion-based differences in employment, industry employed, wages, and status of gender can provide valuable pointers to intervention required by the state and by the community itself.

Crafts at Work

Must all our futures be urban, implying a wrenching migration of hundreds of millions of people from rural India to our less-than-liveable cities? Can our villages not be re-imagined with crafts as local industry for the modern world? Can crafts address some of the problems of rural unemployment, rural migration, sustainable development and gender equity? Ashoke Chatterjee [34] indicates the possibilities

“ Symbolic of its civilisation, the loom in India represents a heritage unbroken through thousands of years. The loom became Gandhi’s catalyst for freedom, and emerged through six decades of planned development as the nation’s largest source of livelihood after agriculture. Today, the Indian loom in several incarnations—handloom, power loom and mill production— represents a huge industry, within which handlooms provide the most jobs—more than four million by conservative estimates and up to 20 million by others. ……
……Former Microsoft India Chairman Ravi Venkatesan observes that India has prematurely given up on its artisans just as the demand for sustainably produced goods, unique designs, and contemporary handcrafted items is growing rapidly globally. “What this suggests is an urgent need to revive cooperatives and producer organisations, scale up entrepreneurship and innovative ecosystems in which multiple stakeholders can come out of their silos and collaborate toward sustainability and scale.”

These are extracts from Chatterjee’s Fifth Kamaladevi Chattopadhyay Memorial Lecture on October 29, 2014 as he eloquently paints an agenda for change despite the systemic odds. Seemingly insurmountable problems are often more about effective implementation than a lack of ideas.

…… “This crisis demands understanding not merely because millions of Indian lives are at stake. More critical is the crisis of values and of mindsets that is the root cause. How and when did pride and confidence in India’s artisans transform into apathy and contempt, their skills dismissed as obsolescent and their culture as defeated? A nation that lacks basic data for its second largest industry is clearly not committed to it. If even economic potential is ignored or regarded as a threat to modernity and power, what chance is there for those other craft values that are cultural, social, environmental and spiritual? Has an India emerged that no longer values the need for different knowledge systems to coexist and enrich one another? The only constant over these years has been showcasing of crafts and artisans on festive occasions, to the accompaniment of mantras extolling our ancient heritage and cultural superiority. Walking the craft talk has been another matter altogether. ……
……. Almost at the same moment that influential Indian planners were declaring craft a sunset activity, the European Union could be heard proclaiming that the ‘future is handmade’…. The call from Europe is a reminder that creativity and innovation are the only human capacities available to any economy if it is to survive and to flourish in today’s globalised economy……Perhaps a first need is for a respectful acceptance of the marketplace as a space familiar to Indian artisans throughout history, and the only space that can deliver meaningful livelihoods. Today’s challenge is to empower the artisan to negotiate effectively with market forces, rather than to fear them. Gandhi’s respect for the customer, the ultimate user of the handmade, was legendary. ……
……It was the changing market in India and overseas that forged partnerships between craftspersons and designers to develop an idiom of Indian craft that could respond to contemporary need. The challenge therefore is not one of market threat but rather fostering the capacity of artisans to negotiate effectively with the market, and effectively protect their own interests within a situation of constant change and unrelenting competition. ……
….. The need now is for building greater management capacities and services at the grassroots, for entrepreneurship capacities that can negotiate unlimited market opportunities at home and overseas, as well as the range of market threats. Self-reliant entrepreneurship rooted in inherited wisdom and combined with current knowledge is perhaps the most essential prerequisite for sustainable livelihoods from handcraft…
…. Perhaps as no other industry, craft is deeply involved with the most fundamental development agendas of our time: managing threats to the environment, promoting justice and equity and peace by bringing the deprived into the centre of concern, empowering women through recognition of their craft roles and contributions, offering identity and confidence in an era threatened by globalised uniformity, providing sustainable livelihoods to households and communities in their own locations through the use of local resources, protecting them from the miseries of migration, and leaving a light carbon footprint to address the threat of climate change. In other words, an industry that probably reflects as no other, both the issues as well as the opportunities for sustainable development. ……

That is indeed a future that Indian hands can help make — handmade in India for the world.

 

Footnotes:
[1] “State of Working India 2018”, Centre for Sustainable Employment. Azim Premji University. Page 58
[2] SWI, Page 40
[3] Page 40
[4] Page 65
[5] Page 69
[6] Page 62
[7] Page 28
[8] ‘Make in India’ is a waste of public resources, the government would be better served to ‘Make in and For Rural India’.
[9] SWI, Page 28
[10] See page 144 for what SWI feels are three important effects of raising incomes and productivity in agriculture.
[11] SWI, Page 143
[12] Page 37
[13] Page 41
[14] Page 42
[15] Figure 2.3, page 42
[16] Table 2.4 b page 43
[17] Page 51
[18] SWI, Page 51
[19] SWI, Page 62
[20] Page 138
[21] SWI, Page 66
[22] Page 65
[23] Table 3.1 Page 69, and Figure 3.6 Page 70
[24] Page 145
[25] Pages 113-114
[26] Page 73-74
[27] Page 113
[28] SWI, Page 50
[29] Page 61 and 119
[30] Page 120. “Women’s Work in West Bengal”
[31] Page 123
[32] SWI, Page 137
[33] Page 140
[34] Ashoke Chatterjee is a former Director of the National Institute of Design, Ahmedabad and former President of the Crafts Council of India. https://www.epw.in/journal/2015/32/perspectives/indias-handloom-challenge.html

About Harsh Singh Lohit

Farming at Aman Bagh is about everything that matters: it keeps me connected to the real, village India, and provides a haven of tranquility and permanence.
This entry was posted in A Day in The Life, Policy & Politics. Bookmark the permalink.

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