Hindustan Times ST (Jaipur)

Constructi­on sector jobs have let down peasants

- Roshan Kishore roshan.kishore@htlive.com

NO CHANGE An examinatio­n of RBI data indicates that peasants turning to constructi­on are increasing­ly at the same income levels as farming, in probably more challengin­g conditions

Shifting agricultur­al workers to remunerati­ve nonfarm jobs, is India’s central challenge on the employment front. The constructi­on sector has been a mainstay of non-farm jobs over the last two decades. However, these jobs are increasing­ly losing their remunerati­ve potential.

The KLEM (Capital with a K, Labour, Energy, Material) database released by the Reserve Bank of India (RBI) provides sector-wise employment figures from 1980-81 to 2015-16. A compound annual growth rate (CAGR) analysis shows that agricultur­al employment has been declining since the 2000s.

The bulk of the non-farm jobs have been generated in constructi­on. Between 2000-01 and 2010-11, the CAGR in constructi­on sector employment was 9.1% against 2.7% in non-farm employment excluding constructi­on. This asymmetry seems to have gone up between 2010-11 and 2015-16

(See Chart 1).

There would be nothing wrong with this if jobs in constructi­on were also generating higher incomes. Unfortunat­ely,it does not seem to be the case. The KLEM database also gives statistics on value added in each sector.

This can be used to calculate trends in per worker value added – a proxy for income – in different sectors. Between 1980-01 and 2015-16 value added per worker (at 2011-12 prices) in agricultur­e has always been less than total value added per worker for the Indian economy.

The gap has been increasing overtime. Among the non-farm sectors, trends are drasticall­y different for constructi­on and other sectors excluding constructi­on.

Value added per worker started declining for the constructi­on sector from the middle of last decade. In fact, its value seems to be heading for a convergenc­e with per-worker value added in agricultur­e (See Chart 2). This is a result of an increase in constructi­on’s share in total non-farm employment with an almost stagnant share in value added in non-farm economy (See Chart 3). A glut of constructi­on workers seems to have facilitate­d a squeeze on wages.

This also means that peasants who fled their farm jobs in search of better incomes are being condemned to live with similar income levels (as farming), and probably worse living conditions. A labourer’s life in the city is likely to be more difficult than a cultivator’s in a village.

Unless earnings in non-farm jobs improve, India should brace itself for a proliferat­ion of unrest associated with rural distress in cities.

NEW DELHI:

1980-81 to 1990-91 Agricultur­e,hunting, forestry and fishing

350,000 300,000 250,000 200,000 150,000 100,000 50,000 0

1 2

Agricultur­e Total economy 1990-91 to 2000-01 2000-01 to 2010-11 Constructi­on 2010-11 to (Figures in %) 2015-16 Non-agricultur­e excluding constructi­on Non-agricultur­e excluding constructi­on

Value added per worker (2011-12 prices) 400,000 1980-81 Constructi­on

 ?? REUTERS FILE ?? A glut of constructi­on workers seems to have facilitate­d a squeeze on wages across the sector.
REUTERS FILE A glut of constructi­on workers seems to have facilitate­d a squeeze on wages across the sector.
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