India's Struggle with Agricultural Labor Dependency

The recent report highlighting India's comparatively lower rate of transitioning its working-age population away from farm-related work compared to its neighboring countries has brought renewed attention to the longstanding issue of agricultural labor dependency in the country.

Key-highlights of the Report (the shift)

• Report by: World Bank’s April South Asia Development Update report.
• Time Period: 2000 to 2023
• Crux: India has managed to move a smaller share of its working-age population away from farm-related work than many of its neighbours.
• Bangladesh, Bhutan, Sri Lanka and Nepal managed to shift a bigger share of jobs to non-agricultural work than India.
• Only Pakistan and the Maldives show a lower shift among South Asian peers.
• The share of working-age Indians who are employed in agri-based jobs has come down over the years. This employment ratio for India was 63.9 per cent in 2000. It declined to 58.9 per cent by 2010; and further to 53.8 per cent in 2019. 
• Since 2000, South Asian countries witnessed rising productivity but only marginally rising, or even declining, employment ratios.
• Employment ratios fell in Bhutan, India, Maldives, and Nepal, while in Bangladesh, Pakistan, and Sri Lanka.
• Men’s employment ratio in India declined by 9.6 percentage points. Most South Asian countries recorded a decline.
• Women’s employment ratio in India increased by 1.4 percentage points. It was the highest for Bangladesh at 11.6 percentage points. The increased participation of women could be driven by rising self-employment among them driven by economic distress.

1: Dimension- Why the findings are concerning?

• Growth challenges: The slower transition of India's working-age population from agriculture poses challenges for sustainable economic growth and inclusive development.
• Distress: Both self-employment and agriculture constitute fallback options for workers who have lost work and cannot afford to remain unemployed.
• Reduced earnings: More women serving the same market translated into increased competition and lower earnings.
• Poor quality of jobs: Indian agricultural labourers mostly moved to other low-paying and informal jobs such as petty retailing, small eateries, domestic help, sanitation, security staffing, and transport.
• Low-paid employment: The labour transfer is happening within the low-productivity informal economy. The jobs that are getting generated outside agriculture are mostly in low-paid services and construction.

2: Dimension- Required measures

• Investment: India aims to reduce agriculture's 'self-exploitation' through non-farm jobs. This requires addressing problems with job laws, promoting direct benefit transfer, improving infrastructure and human capital, and reforming social security and labor codes.
• Creating opportunities in non-agricultural sectors to uplift rural populations from the cycle of self-exploitation in agriculture.
• Skill development of this workforce that is moving away from farms into other sectors is essential.
• Gender disparities in employment trends underscore the need for targeted interventions to empower women in the workforce and unlock their potential contribution to India's economy.