Page 35 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 3: Eleventh Five Year Plan

Employment Perspective in the Eleventh Plan Notes
Eleventh Plan rightly states : “Generation of productive and gainful employment, with decent working
conditions, on a sufficient scale to absorb our growing labour force form a critical element in the
strategy for achieving inclusive growth.”
Weaknesses of Past Experience
“The basic weakness in our employment performance is the failure of the Indian economy to create a
sufficient volume of additional high quality employment to absorb new entrants into the labour force
while also facilitating the absorption of surplus labour that currently exists in the agricultural sector
into higher wage non-agricultural employment.”
The following major weaknesses were noticed in the Eleventh Plan :
• The rate of unemployment has increased from 6.1% in 1993-94 to 7.3% in 1999-00 and further to
8.3% in 2004-05.
• Unemployment among agricultural labour house-holds has risen from 9.5% in 1993-94 to 15.3%
in 2004-05.
• While non-agricultural employment expanded a robust rate of 4.7% during the period 1999-00
to 2004-05, this growth was largely in the unorganized sector.
• Despite fairly healthy GDP growth, employment in the organized sector actually declined,
leading to frustration among the educated youth.
• Although real wages of casual labour in agriculture continue to rise during 2000-2005, growth
has decelerated strongly as compared to 1994-2000 which reflects poor performance in agriculture.
• Growth of real wage rates in non-agricultural employment during 1999-00 to 2004-05 has been
negligible.
• Real wages stagnated or declined even for workers in the organized industry although
managerial and technical staff did secure large increase.
• Wage share in the organized sector has halved after 1980s and is now among the lowest in the world.
During the Tenth Plan, as against a target of 50 million employment opportunities, 47 million
employment opportunities were created which indicates that the employment target was more or
less achieved. More over, employment growth rate improved from 1.25% during 1993-94 to 1999-00
to 2.62% during 1999-00 to 2004-05. The annual increase in employment rose form 4 million per
annum to 9.3 million per annum during 1999-00 to 2004-05.

Table 2 : Employment scenario during 1993-94 to 2004-05
Current daily status
All India 1993-94 1999-00 2004-05 Growth rate during
1993-94 1999-00
(Million Persons) to 1999-00 to 2004-05

1. Population 893.4 1005.0 1092.8 1.98 1.69
2. Labour 334.2 364.9 419.6 1.47 2.84
3. Workforce 313.9 338.2 384.9 1.25 2.62
4. No. of employed (2-3) 20.3 26.7 34.7 4.69 5.40
5. Unemployment 6.1 7.3 8.3
rate (%) (4/2*100)

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