11/15/2012

AGRICULTURAL ECONOMICS

Sectoral changes in GDP contribution and changes in occupational structure in Indian Economy

BY : Shruti Parashar, Stuti Haldar

Semester- III

Sectoral changes in GDP contribution and changes in occupational structure in Indian Economy Introduction Growth, Structural Change and the Indian Economy: An Introductory Overview
The economic development in India followed socialist-inspired policies for most of its independent history, including state-ownership of many sectors; extensive regulation and red tapism known as "Licence Raj"; and isolation from the world economy. India's per capita income increased at only around 1% annualized rate in the three decades after Independence. Since the mid-1980s, India has slowly opened up its markets through economic liberalization. After more fundamental reforms since 1991 and their renewal in the 2000s, India has progressed towards a free market economy. With this Indian economy has shown structural changes. In the late 2000s, India's growth reached 7.5%, which will double the average income in a decade. This economic growth has been driven by the expansion of services that have been growing consistently faster than other sectors. It is argued that the pattern of Indian development has been a specific one and that the country may be able to skip the intermediate industrializationled phase in the transformation of its economic structure. Serious concerns have been raised about the jobless nature of the economic growth. A lot of debate is there regarding the desirability and long-term sustainability of service sector. But still the two-third of the Indian workforce depends directly or indirectly on agriculture. Indias major industries include textiles, chemicals, food processing steel, transportation equipment, cement, mining, petroleum, machinery and software. In this paper we are going to study the pattern of sectoral changes, especially in post independence period along with changes in occupational structure.

Changes in introduction

occupational

structure:

brief

The occupational structure refers to the aggregate distribution of occupations in society, classified according to skill level, economic function, or social status. The occupational structure is shaped by various factors: The structure of the economy (the relative weight of different industries); technology and bureaucracy (the distribution of technological skills and administrative responsibility); the labour-market (which determines the pay and conditions attached to occupations); and by status and prestige (influenced by occupational closure, life-style, and social values). It is difficult to attach causal primacy to any one of these factors; moreover, their role in shaping the occupational structure changes over time, as society changes. For example, during the early phase of European industrialization, the dominance of manufacturing made for a preponderance of manual occupations, while in recent times the shrinking of this sector, together with the growth in services, has made for an expansion of white-collar occupations. The distinction between manual and non-manual occupations has also become blurred with technological advancements.

Objective
This study will present an analytical description of the twin processes of growth of output and changes in its composition in the Indian economy (i.e. occupational structure) since independence, primarily with the objective of bringing out a clear picture of the variation in contribution of various sectors in G.D.P and to represent the changes in the occupational structure, in context of India.

Methodology
In this project structural changes will be examined mainly in terms of the broad tripartite division of the economy into: the agriculture, industry, and Services sectors. We then study the stories of change in the composition output within each of the three broad sectors in somewhat greater detail, which serve to highlight the important changes that took place within each sector over the long run as also the shifts in their patterns that occurred from time to time. We will deal with questions regarding desirability, sustainability and interdependence of these sectors in the growth process of Indian economy. We will also discuss about the employment related issues, the personal skills, education and other relevant traits required in these sectors. For this we are going to use secondary data. In the second part we would like to discuss occupational changes from the point of view of individuals, i.e. how an individual feels his occupational scenario has changed over a period of 5 to 10 yrs in terms of the competitiveness, job satisfaction, availability of career paths, feeling of achievement, job security, etc. in this dynamic open economy. For this we would use primary data based on questioners. Then we would try to merge / equate or find the gaps between macroeconomic facts, regarding what current economic situation is providing and what are the

aspirations of individuals as a large number of people are joining work force every year. The occupational structure is described and analyzed by means of various classificatory schemes, which group similar occupations together according to specific criteria such as skill, employment status, or function. Such classifications are used as a basis for the empirical analysis of economic and social class.

Analysis Theoretical review

Indian economy can be broadly divided into following three sectors, which can be further subdivided: Primary Sector agriculture, agribusiness, fishing, forestry, all mining and quarrying industries. Secondary Sector industry, manufacturing and construction. Tertiary Sector insurance, banking transport and other social & personal services.

Sector wise contribution in GDP: Components of gross domestic product (at factor cost)
year 1950-51 1951-52 1966-67 1967-68 1985-86 1986-87 1991-92 1992-93 2000-01 2008-09 2009-10 2010-11 2011-12 agriculture and allied activities 1450.52 1472.16 1879.62 2159.14 3336.16 3322.5 3902.01 4161.53 5227.55 6556.89 6625.09 7091.03 7286.67 industry 310.26 325.43 793.13 804.03 1943.5 2078.28 2764.9 2851.21 4846.65 8374.07 9122.19 9745.27 10000.42 mining and querying 51.38 57.72 122.31 125.19 291.67 327.39 484.84 489.31 694.72 980.55 1042.25 1094.21 1084.69 manufacturing 250.96 258.89 625.63 628.04 1474.96 1556 1984.19 2045.51 3631.63 6563.02 7197.26 7741.62 7934.68 services(including construction) 968.42 1000.24 2032.22 2122.94 4778.16 5105.22 6975.1 7350.75 13353.55 26655.8 29329.09 32023.24 34738.06
Social & Personal Services

284.74 293.29 539.5 564.38 1311.84 1410.43 1852.32 1963.32 3439.63 5444.97 6100.96 6376.75 6747.03

35000

30000

25000

year 1950-51 1951-52

20000

1966-67 1967-68

15000

1985-86 1986-87

10000

1991-92 1992-93 2000-01 2011-12 2010-11 2009-10 2008-09 2000-01 1992-93 1991-92 1986-87 1985-86 1967-68 1966-67 1951-52 1950-51 year

5000

2008-09 2009-10 2010-11 2011-12

On the basis of the observed patterns of growth and structural changes, economic growth in post Independence India can be divided into the following four phases, each with its distinguishing features. Phase 1. Independence to Mid1960s: This period saw a significant acceleration in the growth rate over the past decades marked by a high growth of industry, and a significant structural change with a large increase in the

share of nonagricultural sector, especially of the industry in the national output. Phase 2. Mid1960s to 1980: This period was marked by a slower growth of GDP, accompanied by a deceleration in the growth of industry, a slower pace of structural shift from agriculture to nonagriculture and a very small increase in the share of industry. Phase 3. 1980 to early 1990s: This period saw a sharp acceleration in growth rate, mainly contributed by services. Structural changes were also swift, with a large decline in the share of agriculture, but very little increase in the share of industryservices picking up the major share of the shift. Phase 4. Early 1990s Onwards: Growth continued at similar rate as 1980s, but declined during 20002004. Structural changes continued at an accelerated pace with share of agriculture sharply declining and services emerging as the major sector and with very small increase in the share of industry. Within this phase, period 200510 has seen a sharp acceleration in growth rate, despite a slowdown in 200809. Share of agriculture has declined from around 20 to 16 per cent, that of services has increased from 54 to 59 per cent and that of industry has stagnated. To make the picture clearer we have compared the data showing the contributions of various sectors to G.D.P on a year wise basis

1950-51
agriculture and allied activities

industry mining and querying manufacturing services(including construction)

Social & Personal Services

1966-67
agriculture and allied activities

industry mining and querying

manufacturing

services(including construction)

Social & Personal Services

1985-86
agriculture and allied activities

industry mining and querying manufacturing services(including construction)

Social & Personal Services

1991-92

agriculture and allied activities

industry mining and querying manufacturing services(including construction)

Social & Personal Services

2008-09

agriculture and allied activities

industry mining and querying

manufacturing

services(including construction)

2010-11

agriculture and allied activities

industry mining and querying

manufacturing

Primary sector
The Primary sector of the economy is the change of natural resources into primary products. Most products from this sector provide raw materials for other industries. The share of primary sector has decreased from the past four decades. In 1970 the share of the sector was 50% which has reduced to 29% in 1995 and is now further reduced to 25%. Major businesses in this sector are agriculture, agribusiness, fishing, and forestry, all mining and quarrying industries.

Agriculture
Agriculture in India is the major sector of its economy. Almost two-thirds of the total work-force earns their livelihood though farming and other allied sectors like forestry, logging and fishing which account 18% of the GDP. These sectors provide employment to 60% of the countrys total population. About 43% of the countrys total geographical area is used for agricultural purposes. After independence additional areas were brought under cultivation and new methods, practices and techniques of irrigation and farming were introduced by the government. The Green Revolution and Operation Flood in the country have made India self sufficient in producing food grains and milk. Among other things, the government also tried to decrease the dependence on monsoons. Better seeds, use of fertilizer, education of farmers and provision of agricultural

credit and subsidies are reasons for increase in agricultural productivity. Today, India is the major producer of milk, cashew nuts, coconuts, tea, ginger, turmeric and black pepper in the whole world. It is the second largest producer of wheat, sugar, groundnut and inland fish. It is the third largest producer of tobacco and rice. India accounts for 10 per cent of the world fruit production with first rank in the production of banana and sapota (Sapodilla). Agriculture in India is the responsibility of the states rather than the central government. The central government formulates policy and provides financial assistance to the states. States like Punjab, Haryana, Uttar Pradesh, Andhra Pradesh, Tamil Nadu, Karnataka and West Bengal are major producers of food grains in India. Himachal Pradesh and Jammu and Kashmir are famous for fruit production. Tea is produced in the high altitudes of Assam, Darjeeling in West Bengal, Tripura, Ooty in Tamil Nadu, Himachal Pradesh and Kerala. Kerala is also the largest producer of natural rubber and spices in India. Rajasthan is among the major producers of edible oils in India and second largest producer of oil seeds. Production of non-conventional items like moong (a type of lentil), soyabeans and peanuts are gradually gaining importance. Even though there has been a steady decline in its share in the GDP, agriculture still remains the largest economic sector and plays a crucial role in the socioeconomic development of the country.

Agriculture and other allied activities contribution to GDP in recent years

Year 1st quarter (in crores) 2004-2005 2005-2006 2006-2007 2007-2008 135745 139404 144790 151336 2nd quarter (in crores) 108879 113023 116947 122418 3rd quarter (in crores) 172401 185750 193209 211649 4th quarter (in crores) 148401 156309 164245 169677

2008-2009 2009-2010 2010-2011 2011-2012

154307 156740 161614 167548

123389 126524 132668 136806

204748 201853 224044 230359

171675 177390 190778 193955

250000

200000

150000 GDP 1st quarter (in crores) 100000 2nd quarter (in crores) 3rd quarter (in crores) 50000 4th quarter (in crores)

year

T h e a b o v e t a b l e a n d g r a p h s h o ws t h a t d u r i n g t h e s e r e c e n t ye a r s a g r i c u l t u r a l s e c t o r s c o n t r i b u t i o n t o G DP h a s i n c r e a s e d b u t t h e i n c r e a s e i s i n s i g n i f i c a n t a s p o p u la t i o n h a s a l s o i n c r e a s e d . A l t h o u g h , t h e a g r i c u l t u r a l yi e l d i n c r e a s e d i n I nd i a a f t e r i n d e p e n d e n c e b u t i n t h e l a s t f e w ye a r s i t h a s decreased. This in its turn has declined the Growth Rate of the Agricultural Sector in India GDP. The agricultural sector has had low production due to a number of factors such as Slow and uneven growth Use of old and obsolete methods of irrigation and cultivation Flaws in land reforms(small sizes of land holdings, exploitation of tenants etc)

Problems relating to finance (unavailability of formal credit institutions and subsidies) Problems relating to storage, marketing, warehousing, communication and transport

Fishing
Fish breeding has increased almost five times since India got independence and is a prime industry in coastal regions. The economic zone of India runs up to Indian ocean (370 Km) covering an area more than 2 million square kilometres. Approximately 4.5 million ton catches are expected from that area. India has about 14000 Km2 brackish water for aquaculture, out of which 600 Km2 were being farmed in early 1990s; about 16,000 Km2 of freshwater lakes, ponds and swamps; and nearly 64,000 kilometres of rivers and streams.

Mining and querying contribution to India GDP

Mining is the term used for the extraction of useful material from the treatment of ore, vein or coal seam. Materials obtained from extraction may be base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock salt and potash. Year 1st quarter (in crores) 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 20275 21110 22187 22391 22903 24616 26304 26251 2nd quarter (in crores) 20067 19649 20901 21837 22125 23676 25398 24016 3rd quarter (in crores) 21744 21745 23608 24620 25226 26582 28200 27403 4th quarter (in crores) 22943 23636 25882 27149 26989 29351 29520 30798

35000 30000 25000 20000 15000 10000 5000 0 1st quarter (in crores) 2nd quarter (in crores) 3rd quarter (in crores) 4th quarter (in crores)

India has initiated several progressive policy measures, putting itself in a good starting position to undertake the transformation of the mining sector. Unlocking the potential of the mining sector in India could add around USD 210 billion to USD 250 billion (` 945 to 1,125 thousand crore or 6 to 7 percent) to the GDP and create 13 to 15 million jobs through direct and indirect contribution by 2025. To achieve this, action is required on key priorities, including enhancing resource and reserve base through exploration and international acquisition; reducing permit delays; putting in place core enablers (infrastructure, human capital, technology); ensuring sustainable mining and sustainable development around mining; creating an information, education and communication strategy; and undertaking measures to ensure implementation. To keep pace with the growing demand, India must enhance domestic mineral production and exploration activity. It is also imperative to reform the Indian mining sector by creating a favourable policy environment and setting up core enablers such as infrastructure and human capital.
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Secondary Sector of Indian Economy

The secondary sector of the economy includes those economic sectors that create a finished usable product and hence depend on primary sector industries for the raw materials. This sector includes industry, manufacturing and construction. The secondary sector contributes 24% of the share in Indian economy.

Industry
Indias industrial sector accounts for 27.6% of the GDP and gives employment to 17% of the total workforce. Though agriculture is the foremost occupation of the majority of the people, the government had always laid stress on the industrial development of the country. Thus policies and strategies were framed to give a

boost to Indias industry. The government aims at achieving self-sufficiency in production and protection from foreign competition. Since independence, India is marching ahead to become a diverse industrial base. Today India holds some key industries in the sectors like steel, engineering and machine tools, electronics, petrochemicals, textiles and software. Importance has also been give to improve the infrastructure of the country. The government has liberalized its industrial policy thereby attracting huge foreign direct investment. If on one hand several multinational companies opened their offices in India, on the other hand many Indian companies started their operations in foreign countries. Industry Growth Rate in India GDP has been impressive in the last few years. The Growth Rate of the Industry in the India GDP has grown due to sustained manufacturing activity over the years. This has given a major boost to the Indian economy. The reasons for the increase of Industry Growth Rate in India GDP are that huge amounts of investments are being made in this sector and this has helped the industries to grow. Further the reasons for the rise of the Growth Rate of the Industrial Sector in India are that the consumption of the industrial goods has increased a great deal in the country, which in its turn has boosted the industrial sector. Also the reasons for the increase of Industry Growth Rate in India GDP are that the industrial goods are being exported in huge quantities from the country.

Industrial sector- PROBLEMS

Failure to achieve targets Under-utilization of capacity Absence of proper infrastructure Increasing capital-output ratio High cost industrial economy Inadequate employment generation Poor performance of public sector Sectoral imbalances Regional imbalances Industrial sickness (small scale and cottage industries)
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Construction and manufacturing

The process of building or assembling of infrastructure is known as a term commonly used in architecture and civil engineering- construction.

Manufacturing contribution to India GDP

Year 1st quarter (in crores) 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 104208 117187 131954 148701 159042 167571 182895 196170 2nd quarter (in crores) 116104 120670 137611 152128 162174 176550 187309 192790 3rd quarter (in crores) 115718 126161 143788 158009 162114 180421 194435 195509 4th quarter (in crores) 122684 134992 157084 170214 172445 195187 209523 208999

250000

200000

150000 1st quarter (in crores) 100000 2nd quarter (in crores) 3rd quarter (in crores) 50000 4th quarter (in crores)

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Tertiary Sector of Indian Economy

The Tertiary sector includes service industry and it holds the highest importance among all sectors. The tertiary sector of economy involves the provision of services to business as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to consumers as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment. The tertiary sectors account for 51% of the GDP. The tertiary sectors may include: Insurance, finance, real estate and business services Banking Trade, hotel, transport and communication Community, social and personal services

The higher the productivity in primary and secondary sector and lower the employment in these sectors, the better it is. People need more and more services for leading qualitatively better lifestyle. They need more means of transport, more communication and educational facilities, more training, more medical facilities, entertainment, technical facilities, banking facilities etc. Tertiary sector depends on scientific research and innovative developments to increases productivity and it provides engineering and construction consultancy support services for all projects in all sectors. Developed countries employ more

than 80% the services sector. India ranks fifteenth in the services output and it provides employment to around 23% of the total workforce in the country. The various sectors under the Services Sector in India are construction, trade, hotels, transport, restaurant, communication and storage, social and personal services, community, insurance, financing, business services, and real estate. The Services Sector contributes the most to the Indian GDP. The Sector of Services in India has the biggest share in the country's GDP for it accounts for around 53.8% in 2005. The contribution of the Services Sector in India GDP has increased a lot in the last few years. The Services Sector contributed only 15% to the Indian GDP in 1950. Further the Indian Services Sector's share in the country's GDP has increased from 43.695 in 1990- 1991 to around 51.16% in 1998- 1999. This shows that the Services Sector in India accounts for over half of the country's GDP. During 2009-10 and 2010-11, automobiles, rubber and plastics, fabricated metal products, machinery and equipment and radio, TV and communication equipment segments had witnessed double digit growth. The share of services sector in countrys gross domestic product (GDP) has risen from 50.4 percent in 2000-01 to 59% in 2011-12. The contribution of the Services Sector has increased very rapidly in the India GDP for many foreign consumers have shown interest in the country's service exports. This is due to the fact that India has a large pool of highly skilled, low cost, and educated workers in the country. This has made sure that the services that are available in the country are of the best quality. The foreign companies seeing this have started outsourcing their work to India especially in the area of business services which includes business process outsourcing and information technology services. This has given a major boost to the Services Sector in India, which in its turn has made the sector contribute more to the India GDP.

Finance ,insurance, real estate and business services

The concept of Insurance dates long back in 1818. Life Insurance premium accounts for 2.5% of the nations GDP while general insurance contributes 0.65% of Indias GDP. Government of India opened gate for private insurance companies to enter the arena and FDI of 26% in the Insurance sector in 1999 until then only LIC was there to provide insurance facilities. Private Insurance companies like ICICI, Max New York, Bajaj Allianz, Kotak Mahindra, and Met Life are providing life insurance, general insurance, medical insurance etc.
Year 1st quarter (in crores) 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
300000 250000 200000 150000 100000 50000 0 1st quarter (in crores) 2nd quarter (in crores) 3rd quarter (in crores) 4th quarter (in crores)

2nd quarter (in crores) 106130 119871 136440 153509 170953 189145 208815 229498

3rd quarter (in crores) 110428 123364 141377 158429 177881 192558 214205 233758

4th quarter (in crores) 114744 131482 149923 165897 189619 201074 221114 243294

105870 117760 133638 150540 168259 187106 205861 225165

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Trade, hotel ,transport and communication

Year 1st quarter (in crores) 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 166536 189062 208411 234697 257700 279250 314546 357883 2nd quarter (in crores) 173240 194038 217544 239445 261944 289020 319798 350263 3rd quarter (in crores) 186971 208192 233919 258240 272156 301003 330117 363101 4th quarter (in crores) 200973 225403 251680 279431 295776 327941 365994 391527

450000 400000 350000 300000 250000 200000 150000 100000 50000 0 1st quarter (in crores) 2nd quarter (in crores) 3rd quarter (in crores) 4th quarter (in crores)

Community ,social and personal services

Year 1st quarter (in crores) 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 92414 98447 104767 109294 118993 134423 140384 144849 2nd quarter (in crores) 100785 107946 111540 119536 131515 156838 163941 173869 3rd quarter (in crores) 100215 107861 109432 115429 142649 154070 152857 162710 4th quarter (in crores) 117947 125904 126981 139569 152027 164765 180493 193275

250000

200000

150000 1st quarter (in crores) 100000 2nd quarter (in crores) 3rd quarter (in crores) 50000 4th quarter (in crores)

The contribution of the Services Sector has increased very rapidly in the India GDP for many foreign consumers have shown interest in the country's service exports. This is due to the fact that India has a large pool of highly skilled, low

cost, and educated workers in the country. This has made sure that the services that are available in the country are of the best quality. The foreign companies seeing this have started outsourcing their work to India especially in the area of business services which includes business process outsourcing and information technology services. This has given a major boost to the Services Sector in India, which in its turn has made the sector contribute more to the India GDP.

Service sector PROBLEMS in general

Inadequate infrastructure facilities ( power shortage, improper skill development) High growth but low share in providing employment Inadequacy in finance Improper maintenance in airports, railways, highways, power plants etc Service sector cannot grow in isolation

Changes in occupational structure in India

Employment has always featured as an important subject of discussion both in academic and policy making circles. It has become a matter of intense debate in recent years due particularly to a rather disappointing employment performance of the postreform economic growth jobless growth of 1990s and zero employment growth with the highest ever GDP growth during 200405/200910. Increasing informalization, casualization and contractualization, have also raised the questions about the quality of most of whatever new jobs are being created. And a disconnect between unemployment and poverty and between employment generation and poverty reduction has added another rather intriguing dimension to the employment debate. Indian economy has registered a longterm employment growth of around two per cent per annum. This rate has been maintained, with some shortterm fluctuations, irrespective of the rate of GDP growth. If anything, a higher economic growth in the postreforms period has been accompanied by a slower growth in employment. Employment growth, in fact, has declined with the acceleration of the growth rate of GDP. Thus employment grew at around 2.4 per cent during 197273/83, 2.0 per cent during 1983/199394, and 1.84 per cent during 199394 200405 and only at 0.22 per cent during the shorter period of 200405/200910. For 19992000/200910, the rate works out to 1.5 per cent. GDP growth during the first four periods was 4.7, 5.0, 6.27 and 9.8 per cent per annum, during 1999/2000/200910 it average to 7.5. As a result, employment elasticity has steadily declined over the years. It was 0.52 during 197383, 0.41 during the next ten year period, 0.29 during 199394/200405 and 0.20 during 20002010.

Economic reforms have not delivered on employment front as they have on the GDP front. The reason primarily lies in the slower growth of employment intensive sectors. Among the broad sectors, for example, growth of manufacturing which has consistently shown high employment elasticity has registered a relatively slower growth than services which have low and sharply declining elasticity. Construction, no doubt, has registered high growth in GDP, as also of employment; but given low productivity of this sector, its high employment elasticity (often higher than one) needs to be read with caution a decline in employment elasticity will, in fact, be desirable here. In services, communication and business services have been the fastgrowing subsectors, both of which have low and declining employment intensity. As noted earlier, the rapid increase in exports has also not contributed much to employment growth due to a decline in the share of labour intensive products in Indias merchandise experts. Changes in the various dimensions of the structure of employment have been rather slow. Employment has grown much faster in urban than in rural areas throughout the period since 197273, yet the dominance of rural areas has continued in the employment structure: they account for 72 per cent of employment in 200910, though their share has seen some decline from 80 per cent in 1983. Within rural areas, there have been significant structural changes: nonfarm sector has grown in importance though not so much in employment as in output. The nonfarm sector contributed 28 per cent of rural NDP in 197273; the share has increased to almost twothirds now. Employment share of nonfarm activities has increased from about 15 per cent in early 1970s to 32 per cent in 200910. Questions have often been asked about the nature of employment diversification in rural areas whether it has been demandinduced or distressdriven. Situation may vary across regions as also in different years but dominant secular trend is found to be positive. More workers are attracted to nonfarm activities, as they offer more stable and better paying employment than agriculture. Larger share in output than in employment, of the nonfarm

sector and consistently higher wages in nonagricultural than agricultural activities strongly support this proposition. In aggregate, structural changes in employment have not been as large as in GDP. Services have increased their share in GDP from 36 per cent in 197273 to 45 per cent in 199394 and to 59 per cent in 200910, corresponding increase in employment share has been much slower: from 15 per cent to 21 per cent and to 27 per cent. A much larger decline in the share of agriculture in GDP than in employment is, however, a major cause of concern. With 41 per cent share in GDP and 74 per cent in employment, average output per worker in agriculture was already only about onethird of that in non-agricultural in 197273. In 200910 with its share in GDP reduced to 15 per cent with over 51 per cent of workers still in agriculture, the gap has widened to 1 to 6.

Continuation of this pattern of structural changes has serious implications not only for equity, but also for the sustainability of a high growth rate as well. Some other changes in the structure of employment are also disconcerting. Organized sector employment did not grow for most of the postreform period: in fact, there was a continuous decline in it during 19972004. So practically all the new employment was in the unorganized sector where productivity and earnings are low. And even within the formal sector, the proportion of informal workers has steadily risen, due to the most new employment being in the nature of casual or contract employment. The share of the selfemployed, as expected, has declined over the years from 61 per cent in 197273 to 55 per cent in 19394 and to 51 per cent in 200910, thus raising the share of the wage and salary earners in total employment. But in that group, the share of casual workers has increased from about 23 per cent in 197273 to 32 per cent in 199394 and to 33 per cent in 200910. The share of regular employees, considered to be qualitatively better in terms of earnings and job and social security, has remained constant at around 15 per cent.

These qualitative dimensions, in fact, pose a greater challenge, than just the quantitative expansion of employment. While in the earlier years, a two per cent employment growth was insufficient to take care of the growth of labour force at about 2.5 per cent, a decline in the rate of growth of labour force in recent years to almost 1.6 per cent has apparently reduced the magnitude of the quantitative challenge. But a high degree of under employment among several groups of workers and the fact that a large number among the employed is earning much less than the poverty line income, and therefore, needing alternative employment, suggest that the number of new jobs required to be generated will be much larger than what is indicated by the number of unemployed and additions to labour force. Employment opportunities will need to grow at over 3 per cent per annum during the 12th Plan to provide work to all by the end of the Plan period. This may be possible with a 9 per cent GDP growth and employment elasticity of 0.33. To improve productivity, especially in the informal sector, so as to meet the quality deficit, employment elasticity, could, however, decline further to about 0.25 or even 0.20. In that case, the required rate of GDP growth would be rather unrealistically high at 12 to 15 per cent. A restructuring of growth would be necessary to achieve the goal of employment for all and that too only in a medium term (1015 years) perspective. At the same time, it also needs to be noted that a faster expansion of employment opportunities with higher growth of sectors and sub sectors with higher employment intensity will contribute to enhancement of the income dimension of the quality of employment through raising demand for labour and tightening the labour market; but the other quality dimension of employment, namely, provision of social protection will need proactive initiatives on the part of the state.

Problems of equity and distribution in occupational structure

The issues relating to the pattern of income distribution are important not only from the viewpoint of equity and justice, but also of the sustainability of economic growth itself. Unequal distribution of rapidly rising income leads to high rate of savings and investment, but the high growth that it can lead to may get constrained by lack of effective demand. Nonavailability of data constrains direct estimates of the

trends in income distribution. But available evidence on consumption expenditure pattern, factor shares and other aspects of equity and distribution clearly suggests that there has been a significant increase in inequality in income distribution, especially in the postreforms period. Analysis of consumption expenditure data with respect to three broad consumption classes the poor, middle and rich during 199394 to 200607 suggests emergence of a certain degree of polarization in urban areas where percentage of people within the middle class has declined and that of the poor and the rich has increased. In rural areas, a levelling seems in operation in so far as there has been a downward shift of some of the rich and upward shift of some of the poor, resulting into a swelling of the middle. In other words, it implies an increase in disparity in the urban and decline in it in the rural areas. This also appears to be reflected in differential rise in consumption expenditure of different classes in rural and urban areas. In rural areas consumption expenditure increased by 94 per cent among the poor and 84 per cent among the rich, during 1993 94/200607. In urban areas, the rich had a higher (134%) increase than the poor (114%). Differential changes in the consumption basket present some interesting patterns. Contrary to the common expectation that inequalities in consumption at least of necessities across income classes decline with increasing levels of per capita income, does not seem to hold in the Indian case. In fact, the disparities between the rich and poor have increased, even in real consumption expenditure on basic needs, during the period of high growth resulting into over 6 per cent annual growth in per capita income. There has been no decline in the consumption disparity in respect of food items like cereals, pulses, and vegetables, but there is a clear trend of increase in disparity in consumption of meat and fish. Second, there is also an increase in disparity in expenditure on education, durable goods and health. Third, the poor in rural areas seem to be spending proportionally less on education and more on health, probably as a result of declining role of public and increasing role of private sector in health.

On the whole, the expected decline in consumption disparity across expenditure classes has not happened. In several important items of expenditure, disparity has increased. Trends in income share of factors, which represents the relative change in incomes of labour and other classes, are obviously clear indicators of changes in income distribution with implications for changes in the levels and composition of effective demand. Changes in factor shares as they have taken place over the longer period and particularly during the past three decades tend to clearly suggest that income disparity between the wage earners and those deriving income from capital and property has sharply increased. Implications of these trends for equity and sustainability of economic growth are quite obvious. They are likely to not only cause greater socioeconomic distress to a large mass of people, but also weaken the sustainability of a high rate of economic growth by posing demand constraint. To support the above point of view we have taken help of primary data, which depicts the clear picture of the changing scenario in occupational structure of the nation. Hereafter we would try to derive certain inferences based on the survey conducted.

Our questionnaire is based on following hypothesis:

Hypothesis 1: The jobs have enhanced standards of living. Hypothesis 2: People have more career options but specialized skills are required. Inference of the questionnaire: 1. When we asked people to compare the studies which they have done previously vis--vis their counterparts who are passing out today, 28 out of 30 people say that their counterparts have better options in terms of subjects of preferences so they have better carrier options but 2 people say they had better quality of higher studies so they are more skilled as compared to their counterparts. 2. Regarding the tenure in which they get job we get following results : 0to 3 months 16 3 to 6 months 6 6 to 12 months 5 More than a year 3

Here interesting thing that was observed was that 16 people who got job within 3 months were those who got selected through either campus or who completed their studies before 2004. Out of rest 14people, 7 people have started their own business. 3. Regarding life-style related questions we got following results : 1. Work culture of all has improved, though degree of improvement varies. 2. Socially, financially, entertainment wise life of all has improved considerably. 3. Family life is more or less same but in private jobs time spend with family is less as they have to work for long hours during a day and even on holidays they may have to work if required or may have to be in touch with office on phone/net. 4. Most of the people have shifted to private transport from public transport. 5. Work accountability as well as satisfaction levels have increased over the period of time.

6. Spiritually, people have developed. 7. But stress levels have increased considerably 8. Overall knowledge/global awareness is much more than earlier it was. 9. Saving has declined proportional to income as people want to try, use and enjoy new products. 10.Regarding satisfaction level we get mixed results. 11. When we asked people whether they are comfortable with any change that their organization or department implements for improving their or organizations performance 24 people were comfortable to make & implement the change as & when required as per the situation. But 6 people were not comfortable with changes in reporting system and systems &processes. 12.In answer to the question what they want to do after 5 to 10 years, 6 people replied that they want to start their own venture or become entrepreneurs (we already had 7 businessman in our sample), which is a good sign as an entrepreneur creates jobs not only for himself but also for others. 13.Others want to enhance their capabilities and want to grow in job. They are quite open to grab new job opportunities. People who want to start their own venture want support in the form of subsides, capital and quick processing from government. On the basis of questionnaire we accept both our hypothesis.

Conclusion
The Indian economy is estimated to grow by 6.9 per cent in 2011-12, after having grown at the rate of 8.4 per cent in each of the two preceding years. This indicates a slowdown compared not just to the previous two years but 2003 to 2011 (except 2008-9). With agriculture and services continuing to perform well, Indias slowdown can be attributed almost entirely to weakening industrial growth. Thus in the end we would conclude that we have noticed growth in all the sectors since independence. But the growing trend is that industrial sector is being neglected and services sector has shown rapid growth. The agriculture sector provides food for the growing population in our nation and raw materials for many agro-based industries. Hence, investments must be made in measures to improve the agricultural productivity. And the loop holes in government policies and in the market structure needs to

be eliminated. This would lead our economy to the path of balanced growth and development. However, there is little doubt that the exceptional growth of services makes the Indian case of structural change an odd one, an exception to the general rule. Two widely noted features have marked out this oddness. The first is the premature nature of the transition to a services dominated economy, at an exceptionally low level of per capita income and without achieving a full-fledged industrialization. The second is that the large share of services in output has not been matched by a corresponding one in employment. These have distinguished the Indian case from the experience of the developed countries, where both the attainment of high levels of industrialization and the shift of employment towards services preceded the decisive shift towards tertiarization of output. It has also however been shown that the prominence of services in Indian distinguishes it from many other Asian developing countries experiencing growth over the same period. One may add to this that the increasing importance of services in India is also not comparable with a similar trend in Latin America since the 1980s. One reason for this is because of the significantly higher levels of per capita income in Latin America. But more importantly, deindustrialization and the shift towards services in Latin America was associated with a significant slowing down of growth. This is certainly not true for India. This report shall in fact highlight that the Indian story is quite the oppositethe shift coincides with the transition around 1980 to a higher growth path.

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