How Inclusive Has Regular Employment Been in India? A Dynamic View

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1 Original Article How Inclusive Has Regular Employment Been in India? A Dynamic View Ashish Singh a, *, Upasak Das b and Tushar Agrawal b a Azim Premji University, Bangalore, India. b Indira Gandhi Institute of Development Research, Mumbai, India. singhmb.ashish@gmail.com Abstract Using data from nationally representative employment and unemployment surveys, this article examines the inclusiveness of Indian economic growth by looking at the changes in socio-economic inequalities in regular employment over the period to Our findings reveal that, at the all India level, socio-economic inequalities in regular employment increased minutely during to However, the changes at the regional level are mixed. Regions of the North, Central and East show a decrease against an increase in Western and North Eastern regions. In the Southern region, the socio-economic inequalities in regular employment have remained almost same. A partir de données issues d enquêtes représentatives à l échelle nationale sur l emploi et le chômage, cet article cherche à évaluer dans quelle mesure la croissance économique de l Inde est inclusive en examinant l évolution des inégalités socio-économiques dans l accès à l emploi régulier pendant la période à Nos résultats montrent que, au niveau national, les inégalités socio-économiques dans l accès à l emploi régulier ont très peu évolué au cours de la période en question. Cependant, la situation varie d une région à l autre. On constate en effet une réduction des inégalités dans les régions du nord, du centre et de l est alors qu elles ont augmenté dans les régions de l ouest et du nord-est. Dans la région du sud, les inégalités socio-économiques dans l accès à l emploi régulier n ont quasiment pas évolué. The European Journal of Development Research advance online publication, 25 April 2013; doi: /ejdr Keywords: economic reforms; inclusive growth; socio-economic inequalities in employment; India; South Asia Introduction India s unprecedented economic growth in the era of economic reforms has brought in its wake concerns regarding the inclusiveness of that growth (Dev, 2008; Vakulabharanam, 2010; Weisskopf, 2011). The notion of inclusiveness has not always been clearly defined, and empirical accounts of growth and inclusiveness in India have been sparse. 1 Recent work focusing on this area of enquiry would include Suryanarayana (2008), Bhalla (2011) and Jayaraj and Subramanian (2012)(JS, for short). 2 The impression generated by these studies is a mixed one, with Bhalla finding in favour of inclusiveness and Suryanarayana and JS finding against. These authors have mainly examined the growth in consumption expenditure, and mostly explored the interpersonal inclusiveness in growth. However, investigation of inter-group inclusiveness is relatively limited. The present article seeks to contribute to this literature and to enlarge its domain by examining the time profile of changes in regular employment and the accompanying time profile of changes in socio-economic inequalities in the access to such employment. The main finding of the article is of a mixed regional picture of both growth and inclusiveness, marked by an overall and essentially discouraging outcome of little growth in regular employment and no reduction in the group inequalities governing access to it.

2 Singh et al Data, Coverage and Measurement We have employed data on group-related access to the category of regular salaried/wage employment from two rounds and of the nationally representative Employment and Unemployment surveys conducted by the National Sample Survey Organization (NSSO) in India. The details of the numbers of households sampled, and other particulars of the surveys, are available in the respective survey reports (NSSO, 1997; NSSO, 2011). 3 For our purposes, we have confined attention to individuals in the age group of In addition, individuals in the age group of who were enrolled in school or educational institutions during the time of surveys have been removed from the analysis sample. They constitute 1.4 per cent and 2.5 per cent of the eligible sample (21 60 ) for the and , respectively. Group identities have been captured by a partitioning of the population according to the attributes of caste (Scheduled Caste and Scheduled Tribe or SCST, and Non-Scheduled categories or Non-SCST); religion (Hindu, Muslim, Other religions); gender (female, male); and sector of residence (rural, urban). 4 Individuals belonging to SCST community have suffered severe social exclusion and discrimination since historical times and lag behind the non- Scheduled groups in different indicators of welfare (Deshpande, 2011 and the references therein). Muslims (the largest minority religious group) in India lag their Hindu (the majority) counterparts to a large extent in access to various governmental and non-governmental services including education, income and employment (Government of India, 2006a). India also suffers from substantial gender-based disparities in different economic and demographic indicators including employment (Bhan, 2001 and the references therein). Similar is the case of the rural urban divide. Given two caste groups, three religious groups, two gender groups and two locational groups, we have a total of 24 (= ) socio-economic groups defined by alternative combinations of affiliation to caste, religion, gender and place of residence, such as (SCST, Hindu, Urban, Male), (Non-SCST, Muslim, Rural, Female) and so on. Given m socio-economic groups in the population, if p is the level of average regular employment (proportion of the population in regular employment), p j is the average regular employment in the jth group ðj = 1; ¼; mþ and α j is the population share of the jth group ðj = 1; ¼; mþ then consider the Index of Socio-economic Inequality in (Regular) Employment, SIE, given by: SIE = 1 X m 2p j = 1 α j p - p j : The SIE is a simple representational measure of group inequalities, which is expressed as a normalised, weighted sum of the absolute deviations of group-specific regular employment rates from the overall regular employment rate. The index is particularly well suited for dichotomous outcomes and is a form of dissimilarity index based on the measure of inequality of opportunities advanced by Barros et al (2008, 2009) (see also, for an application, Singh, 2012a). The measure varies from 0 (perfect inter-group equality in access to regular employment) to unity (which is the upper bound on the index, and to which its value tends when the entire regular employment is accounted for, in a polar extreme of concentration, by a single group of arbitrarily small size). The SIE Index can be interpreted as the quantity of regular employment opportunity that needs to be rearranged (as a proportion of the number of individuals who already have it) from the better-off groups (those whose average employment is greater than the population average) to the worse-off 2

3 Socio-Economic Inequalities in Employment in India groups (those whose average employment is less than the population average), in order to equalise employment across the various groups. 5 To see what has happened to inter-group inequality in access to regular employment over time, we compute the value of the SIE index for two points in time, and We perform these computations for four age cohorts 21 30,, and from the consideration that variations in employment structure across age groups could be of independent interest to the observer. Further, we obtain a geographically disaggregated picture of socio-economic inequalities by computing the SIE index for each of the six specified regions in the Indian Union: North, Central, East, North East, West and South. 6 If the SIE index value has decreased over time then we take it as an indicative of growth to be inclusive; if its value is stable over time then the economic growth is considered to be sustaining the existing socio-economic inequalities; and finally if the SIE index value has increased over time then the growth is taken as non-inclusive. Results Table 1 presents data on the distribution of individuals by socio-economic characteristics, whereas Table 2 by geographical region. Together, they present background features of the composition of groups over time. Clearly, the composition by caste, religion, gender and rural/ urban location shows that our sample is similar to the overall national picture. The age-wise distribution shows that the Indian population is relatively younger, with nearly 64 per cent of the population being younger than or 40 (in ). The regional proportions have remained more or less same during to Table 1: Percentage distribution of individuals by socio-economic characteristics Socioeconomic Characteristics All-India, All-India, Caste SC/ST Non-SC/ST Religion Hindu Muslim Others Gender Male Female Location Rural Urban

4 Singh et al Table 2: Percentage distribution of individuals by the geographical regions Regions North Central East West South North East Table 3: Percentage of individuals on regular wages (salaries) by socio-economic characteristics Socioeconomic Characteristics All-India, All-India, Caste SC/ST Non-SC/ST Religion Hindu Muslim Others Gender Male Female Sector Rural Urban Source: Authors computations based on NSS Employment and Unemployment surveys ( and ) Table 3 furnishes information on the distribution of individuals in regular employment by socio-economic characteristics, and Table 4 on this distribution by geographical region. They bring about the background features with reference to the population in regular employment. On aggregate, access to regular employment has increased only very marginally over the period to from 10.6 per cent to 11.3 per cent. This is a small rise in a small incidence of regular employment, accounting as it does for just a little more than a tenth of the population in regular employment. Indeed, in three of the six regions considered Central, East and North East regular employment has actually declined. The story on the front of growth, as such, is therefore disappointing. In addition, the results show that there are substantial caste-, religion-, gender- and location- (rural/urban) based disparities in regular employment. The 4

5 Socio-Economic Inequalities in Employment in India Table 4: Percentage of individuals on regular wages (salaries) by geographical regions Regions All-India North Central East West South North East percentage of non-scst and Hindu individuals on regular wages is substantially higher than the SCST and Muslim individuals, respectively. Gender- and location-based disparities are the most prominent. There are almost 19 per cent of males who are on regular wages compared with only about 4 per cent of females. In addition, there are nearly 26 per cent individuals on regular wages in urban areas compared with about 6 per cent in rural areas. Table 5 sets out, at the all-india level, the population shares and the group-specific regular employment rates for each of the 24 socio-economic groups considered in this article: this constitutes the information required to construct the (all-india) SIE Index. Table 6 carries summary estimates of the values of the SIE Index over two points in time and A consideration of the estimates presented in Tables 5 and 6, which reflect the socio-economic inequalities in the access to regular employment, confirms many of the suspicions one would be inclined to harbour and suggests the following: the two worst-off socio-economic groups in terms of level of regular employment (in as well as in ) are the ones constituted by non-scst, Muslim, rural females (0.67 per cent ( ) and 1.02 per cent ( )) and SCST, Hindu, rural females (1.29 per cent and 1.83 per cent). The SCST, Muslim, rural females (1.58 per cent and 2.24 per cent) and non-scst, Hindu, rural females (1.54 per cent and 2.02 per cent) are very close to the SCST, Hindu, rural females. On a broader note (and to make the discussion relatively simpler), the condition of Muslim, rural females was the worst in (0.69 per cent) and is the worst in (1.05 per cent). In both the, they are followed by Hindu, rural females (1.45 per cent ( ) and 1.96 per cent in ( )). 7 At the other end of the spectrum, the two most advantaged groups are the ones constituted by Non-SCST, Hindu, urban males and SCST, Other religions, urban males. In , the Non-SCST, Hindu, urban males had the highest level of regular employment (44.62 per cent), which was about 4 percentage points higher than that of the regular employment level of the SCST, Other religions, urban males ; however, in , the regular employment level of SCST, Other religions, urban males (45.4 per cent) is one percentage point higher than that of the Non-SCST, Hindu, urban males. A point that is extremely important to note here is that the group SCST, Other religions, urban males is a particularly small group or community with a population share of 0.1 per cent and 0.3 per cent in and , respectively, and caution should be observed in the sense that its regular employment status should not be taken as an indicator of a relatively better socio-economic situation of the overall 5

6 Singh et al Table 5: Population shares and the regular employment rates by socio-economic groups: All India, to Socio-economic groups Population share (in percentage) Regular employment rate (in percentage) Population share (in percentage) Regular employment rate (in percentage) SCST-H-M-R SCST-H-M-U SCST-H-F-R SCST-H-F-U SCST-MU-M-R SCST-MU-M-U SCST-MU-F-R SCST-MU-F-U SCST-OR-M-R SCST-OR-M-U SCST-OR-F-R SCST-OR-F-U NSCST-H-M-R NSCST-H-M-U NSCST-H-F-R NSCST-H-F-U NSCST-MU-M-R NSCST-MU-M-U NSCST-MU-F-R NSCST-MU-F-U NSCST-OR-M-R NSCST-OR-M-U NSCST-OR-F-R NSCST-OR-F-U Notes: SCST Scheduled Castes and Scheduled Tribes; NSCST Non-SCST; H Hindu; MU Muslim; OR Other Religion; M Male; F Female; U Urban; R Rural. Table 6: Socio-economic inequalities in regular employment: SIE Index (in percentage), All-India and specified geographical regions, to All-India North Central East West South North East

7 Socio-Economic Inequalities in Employment in India SCST Males in general and SCST urban males in particular. The difference in the level of regular employment between SCST and non-scst individuals (Table 3) can also be seen in this regard. Having said that, the difference between the most advantaged and the most disadvantaged group, which was 43.9 percentage point in , has increased to 44.5 percentage point in The difference between the extreme groups, in the presence of a low overall average, points to both absolute disadvantage and considerable inter-group disparity in the distribution of regular employment. Turning to the main focus of our article, the value of the SIE Index has not, on aggregate, declined from to ; if anything, it has increased, marginally, from a high level of 39.9 per cent to 40.1 per cent. 8 In , the measure has varied in value from around 36 per cent in the South to about 43 per cent in the West. From to , the SIE Index has registered a decline in value in the North, Central and East regions; remained roughly constant in the South; and increased in the West and North East regions. This suggests a general pattern in which regions (except North) that have experienced positive growth in regular employment have experienced a deterioration in (or a near stable in South) inter-group inequality, and vice versa. In both and , the highest level of socioeconomic inequality is observed in the case of Central region in the age cohort, with SIE Index values of 66 per cent and 57 per cent, respectively. Concluding Remarks The present article adds to the literature on the examination of inclusiveness of Indian economic growth of the past two decades and extends it by investigating the time profile of changes in regular employment and the accompanying time profile of changes in socio-economic inequalities (or inter-group inequalities) in the access to such employment. The findings, in essence, add up to a picture that looks dismal. One would expect growth with inclusiveness in income to translate to growth with inclusiveness in regular employment. However, the analysis in this article suggests low absolute levels of regular employment, high values of inter-group disparity in access to regular employment, a poor record of growth in regular employment and no alleviation of group-related inequality in the access to such employment. Overall, then, this article s findings are in conformity with that strand of the literature mentioned at the outset which has been pessimistic rather than otherwise about the record of inclusiveness of growth in the Indian economy. Acknowledgements We express our thanks to the two anonymous reviewers for comments and suggestions on an earlier draft. This article was written when Ashish Singh was a PhD Candidate at the Indira Gandhi Institute of Development Research, Mumbai, India. Notes 1. The 11th Indian 5-year plan ( ) lays down inclusive growth as a key objective (Planning Commission, 2011). The Approach Paper of the Eleventh Plan states that the Plan provides an opportunity to restructure policies to achieve a new vision based on faster, more broad-based and inclusive growth. It is designed to reduce poverty and focus on brining the various divides that continue to fragment our society (Government of India, 2006b, p. 1). 7

8 Singh et al 2. A few others have also defined inclusive growth. Please see Suryanarayana (2008) for a review. 3. The NSS surveys report the usual employment status of individuals (based on usual principal activity particulars) and group them into different categories, for example, own account worker; employer; worked as helper in household enterprise (unpaid family worker); worked as regular salaried/wage employee; worked as casual wage labour in public works; worked as casual wage labour in other types of work and so on. If an individual is a regular salaried/wage employee then s/he is considered to have regular employment. 4. As the round of Survey categorises caste into SC, ST and Others, we could not take a more elaborate scheme of caste categorisation, namely, SCST, Other Backward Classes and Other Castes. 5. See Barros et al (2008) for a formal proof and other properties especially the insensitivity of SIE to a balanced increase in regular employment. 6. The six specified geographical regions are: North, Central, East, North East, West and South. The Northern region comprises the states of Jammu and Kashmir, Himachal Pradesh, Delhi, Punjab, Haryana and Rajasthan (and the Union Territory of Chandigarh). The states of Uttar Pradesh, Uttaranchal, Madhya Pradesh and Chattisgarh come under the Central region. The Eastern region comprises the states of Bihar, Jharkhand, West Bengal, Orissa and Sikkim. The North-Eastern region includes the seven north-eastern sister states, namely, Assam, Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Tripura and Nagaland. The Western region includes the states of Maharashtra, Goa and Gujarat (and the two Union Territories of Daman and Diu and Dadra and Nagar Haveli). Finally, the Southern region comprises the states of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu (and the union territories of Pondicherry and Lakshadweep). Uttaranchal is a new state, which was carved out of the state of Uttar Pradesh and is considered in the Northern region. But since in it was part of Uttar Pradesh, which is counted in the Central region, we have included it in the Central region for analysis. The categorisation of states into regions is similar to Singh (2012b). 7. The estimates for Muslim, rural females and Hindu, rural females, though not reported in the Table 5, have been computed for a broader picture from the figures presented in the same table. 8. The rise in SIE index value assumes increased importance if seen in the light of Sundaram (2009), which notes that even among regular wage/salaried workers short-term contractual arrangement is emerging, and goes on to say that this raises questions regarding stability of employment for the regular wage/ salaried workers. References Barros, R.P., Molinas, J.R. and Saavedra, J. (2008) Measuring Inequality of Opportunities for Children. Washington DC: World Bank. Barros, R.P., Ferreira, F.H.G., Vega, J.R.M. and Chanduvi, J.S. (2009) Measuring Inequality of Opportunities in Latin America and the Caribbean. New York: Palgrave MacMillian and World Bank. Bhalla, S.S. (2011) Inclusion and Growth in India: Some Facts, Some Conclusions. London School of Economics. Asia Research Centre Working Paper 39. Bhan, G. (2001) India Gender Profile. Institute of Development Studies, University of Sussex, BRIDGE Report 62. Deshpande, A. (2011) The Grammar of Caste. New Delhi, India: Oxford University Press. Dev, M.S. (2008) Inclusive Growth in India: Agriculture, Poverty and Human Development. New Delhi, India: Oxford University Press. Government of India (2006a) Social, Economic and Educational Status of the Muslim Community of India. New Delhi, India: Cabinet Secretariat, Government of India. Government of India (2006b) Towards Faster and More Inclusive Growth: An Approach to the 11th Five Year Plan. New Delhi, India: Planning Commission. Jayaraj, D. and Subramanian, S. (2012) On the Inclusiveness if India s Consumption Expenditure of Growth. The United Nations University. UNU-WIDER Working Paper 2012/57. National Sample Survey Organization (NSSO) (1997) Employment and Unemployment in India, National Sample Survey Organisation, Ministry of Statistics and Programme Implementation Report 409, Government of India. National Sample Survey Organization (NSSO) (2011) Key Indicators of Employment and Unemployment in India, National Sample Survey Organisation, Ministry of Statistics and Programme Implementation Report KI (66/10), Government of India. 8

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