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Tapping agriculture’s potential to create more jobs
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Context
The number of workers in unincorporated sector enterprises in India has shown a decline, particularly in manufacturing, while marginal increases are noted in trade and other services sectors. This trend raises concerns about the role of the informal sector as an employment provider and its resilience amid economic challenges.
Decline in Unincorporated Sector Employment:
- Sector-wise Analysis: The workforce in manufacturing within unincorporated sector enterprises decreased significantly from 3.60 crore to 3.06 crore.
- Stagnation and Marginal Increases: Conversely, trade saw a slight increase from 3.87 crore to 3.90 crore workers, while "other services" also showed a minor rise from 3.65 crore to 4 crore.
- Impact of Economic Shocks: Factors such as demonetisation, GST implementation, and pandemic-induced lockdowns contributed to the contraction, affecting small-scale enterprises disproportionately.
Shift towards Formal Sector and Structural Transformation:
- Potential Formalisation: While data on formal sector expansion is lacking, any shift towards formal employment is seen as beneficial, offering higher productivity and better wages.
- Challenges of Informal Sector: Informal enterprises are often characterized by low productivity and wages, posing challenges to genuine structural transformation of the economy.
- Need for Skill Development: The informal sector's limitations highlight the necessity for skill development to match the demands of high-productivity sectors like manufacturing and services.
Redefining Agriculture's Role in Employment Generation:
- Enhancing Agricultural Productivity: There is a call for reimagining agriculture as a source of not just raw materials but also as a hub for value addition and employment generation.
- Potential Job Creation: Jobs in agriculture can expand beyond farming to include activities such as processing, packaging, and retailing, thereby boosting rural employment.
- Vision of Agriculture as Industry: Promoting agriculture as a source of processed goods can replicate the success of sectors like sugar mills and dairies in adding value and creating local employment opportunities.
Mains Question:
Q. What are the challenges and potential strategies for transforming India's employment landscape from predominantly informal and agricultural sectors towards formalisation and higher productivity, with a focus on recent trends and economic shocks impacting unincorporated sector enterprises?
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