Government efforts to boost manufacturing through production-linked incentives or liquidity support to medium and small-scale enterprises have failed to stem the decline of manufacturing in India, according to the Centre for Monitoring Indian Economy (CMIE), as agriculture's share of total employment continues to rise.
Agriculture's percentage of total employment has risen from 35.3 percent in 2017-18 to 36.1 percent in 2018-19, and then to 38 percent in 2019-20, according to CMIE statistics from the consumer pyramid household survey.
Worse yet, according to CPHS data, reverse migration to agriculture will continue in 2020-21. "Agriculture's share of total employment increased to 39.4 percent in the year from 38 percent in 2019-20, while manufacturing's share fell drastically from 9.4 percent to 7.3 percent," it added, adding that construction employment has rebounded. Its proportion of total employment increased to 15.9% in 2020-21, up from 15.4% in 2018-19 and 13.5 percent in 2019-20.
While the trend based on CPHS is in line with the government's Periodic Labour Force Survey (PLFS), the movement toward agriculture in the previous three years is more in line with PLFS, according to CMIE.
Agriculture employment increased sharply from 42.5 percent of overall employment in 2018-19 to 45.6 percent in 2019-20, according to the latest PLFS report.
"While PLFS recorded a 3.1 percent rise in agricultural labour, CPHS estimates a far lesser increase of 1.9 percent," it stated.
"A big shift in labour favouring agriculture cannot be voluntary." It's an indication of labour market hardship when non-agricultural industries can't fill jobs and workers are compelled to migrate to agriculture," it stated in its weekly labour market review.
The shift to agriculture is occurring despite the fact that the sector has the lowest wage rates, according to CMIE. "Labour would not deliberately transfer to this lowest wage-rate sector unless it had no better option," he said, citing PLFS statistics that shows earnings for paid jobs are Rs 558 per day, for self-employed, it is Rs 349 per day, and for casual labour employed in agricultural, it is Rs 291 per day.
According to CMIE, agriculture absorbed a major portion of jobs from the comparatively unorganized construction and manufacturing sectors. Nearly 60% of manufacturing jobs are considered to be in the unorganized sector, and in times of hardship, workers from this sector have shifted to agriculture.
