Migration from factories to farms, a sign of distress

Source: Business Standard 

Synopsis:

The government’s Periodic Labour Force Survey (PLFS) report shows a sharp increase in employment in agriculture. It has increased to 45.6% in 2019-20, compared to 42.5% of the total employment in 2018-19. This is a sign of distress as migration to agriculture has been due to compulsion and not in wake of better opportunities.  

Background:

The government’s Periodic Labour Force Survey (PLFS) report shows a sharp increase in employment in agriculture from 2018-19 to 2019-20. The survey findings show a similar trend as shown by the Centre for Monitoring Indian Economy (CMIE’s) – Consumer Pyramids Household Survey (CPHS). The CPHS also showed a rise in agricultural employment and a decline in manufacturing jobs.

About Periodic Labour Force Survey:
  • The PLFS is an annual survey conducted by the National Statistical Office (NSO). 
  • It was started in 2017, and it essentially maps the state of employment. 
  • In doing so, it collects data on variables such as the level of unemployment, the types of employment and their respective shares, etc.
Key Findings of the Survey:
  • A sharp increase in employment in agriculture is witnessed, from 42.5% of the total employment in 2018-19 to 45.6% in 2019-20
  • The biggest increase in employment in 2019-20, within agriculture, was largely among women. Nearly 60% of all employed women were engaged in agriculture.
  • According to the PLFS, the share of manufacturing in total employment fell from 12.1% to 11.2%. 
    • Of all the specific sectors for which PLFS provides data, the manufacturing sector saw the biggest fall (0.9 percentage points). 
    • The next largest loser is construction (0.5 percentage points). 
    • And then it is transport, storage and communication (0.3 percentage points).
Analyzing the Key Findings:
  • The reverse migration from factories to farms has enhanced due to a reduced growth rate in the economy and the job losses due to the Pandemic.
  • Further, such a large shift of labour in favour of agriculture is involuntary. It is a sign of distress in the labour market, where non-agricultural sectors are unable to provide employment and labour is forced to shift to agriculture.
    • The forced or at least involuntary nature of this migration is evident from the wages data provided by the PLFS. 
    • Salaried jobs provide wages of the order of Rs.16,780 per month which translate into wage rates of Rs.558 per day.
    • In comparison, casual labour which is the type of employment provided by agriculture yields much lower wages – of the order of Rs.291 per day. 
  • The safety net provided by agriculture reduces the political pressure that widespread unemployment could have created.
  • Presence of a huge number of females in the agriculture sector shows the domination of poor quality of employment that women get in India.
  • It can also be deduced that large parts of employment from the relatively unorganised construction sector and the unorganised manufacturing sector moved into agriculture.
  • Government efforts to boost manufacturing through production linked incentives or liquidity support to medium and small scale enterprises have not been effective in stemming the decline of manufacturing in India.
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