In this paper, we analyze the deep and anomalous economic slowdown in 2019-20, when the Indian economy grew at a rate of 4 percent, the lowest in a decade. We argue that the slowdown was largely confined to one year, 2019-20. The growth rate in the prior years averaged at 7 percent a year, and in none of the other years was it significantly below this average rate of growth. In contrast to some of the prevailing narratives, the slowdown did not permeate widely across sectors and activities. It was concentrated primarily in the manufacturing sector. The agriculture sector grew faster than before, and the services sector experienced only a mild deceleration, that too in the last two quarters of the year. On the demand side, the slowdown was primarily reflected in a sharp contraction in exports. In comparison, consumption decelerated by a milder amount, investment growth was broadly flat, and government expenditure grew at a faster pace than in the previous decade. The slowdown can be accounted for by three factors. First, about a 50 basis points worth of the slowdown was due to the COVID-induced lockdown in the last week of March 2020. Second, more than 100 basis points worth of the slowdown was due to the collapse in exports, attributed both to a large global slowdown in trade, and to the fact that India lost ground to other countries in maintaining its market share in a slowing market. Finally, the credit collapse from banks, Non-Banking Financial Companies, and Housing Finance Companies mattered, which likely made the lack of credit an impediment to production, investment, export, and consumption decisions.
In the Review, we summarise the economic and policy developments in India; monitor global developments of relevance to India; and showcase the pulse of the economy through an analysis of high-frequency indicators and the heat map.
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Claims and counter-claims have characterized the debate about the scenario of employment and unemployment in the country. Both Government and private agencies shell out various shades of data and information to prove a point. Going by the official data set it is seen that Government collects and collate employment data using various methodologies one of them is in the form of Periodic Labour Force Survey (PLFS). The Survey provides annual and quarterly indicators of employment and unemployment. It throws up some interesting and intriguing dimensions which deserves discussion. We had a look at the unit level PLFS data for the period 2017-18 and 2019-20.
Employment rate and its growth
The overall employment rate was in the steady range of around 47 percent to 51 percent in time period of 2017-18 to 2019-20 implying that half of the persons in the age group of 15 and above are employed in one form or the other.
However drilling down the employment rate data we found some chilling revelation. The employment rate amongst females is a third of males’ employment rate in the period of 2017-18 to 2019-20. In other words for every three employed males there is only one employed female. The stark difference is undeniable depressing. Here the usual rural-urban dichotomy is absent – similar pattern of lower employment rate among females existed in both rural and urban areas. Low rate of female participation in the work force is still the dominant factor in the Indian employment scenario.
Table: Percentage distribution of growth rate
Looking at the growth in the overall employment rate it is seen that it grew at around 9 percent in 2019-20 over 2017-18. Interestingly this growth was spearheaded by the growth in females’ employment rate. It grew by around 31 percent as against a mere 3 percent growth in males’ employment rate. This is something to cheer about and is a positive development albeit the fact that it happened in the background of low employment rate amongst females.
Curiously digging further into the employment data we found that the phenomenal growth in females’ employment rate was largely driven by the rise in female unpaid family workers. Female unpaid household members are those who assisted in the operation of an economic activity in the household farm or non-farm activities. This category of female workers grew at 49 percent in the rural areas and at 17 percent in the urban areas. The question that begs us is whether we are entering a scenario where female unpaid workers are heavily contributing to economic activity without being getting paid for and hence does nothing to enhance their financial status? We are not hazarding any guess at this moment. It would require some more indept analysis.
Conclusion
Our current findings can be summed up something like this – (i) the overall employment rate in the country is around 50 percent but females’ employment rate is only a third of males’ employment rate and (ii) increasing growth in females’ employment rate is largely being contributed by female unpaid workers. If this phenomenon persists then timely and adequate policy initiatives should be put in place to compensate these female unpaid workers to enhance and strengthen their financial well-being. Their productive contribution to economic activity should not go unremunerated financially.
Dr. Palash Baruah is Senior Research Analyst National Council of Applied Economic Research (NCAER) New Delhi and Mr. D. L. Wankhar is a retired Indian Economic Service Officer Views and opinions expressed in this article are personal.
Several changes may have taken place in the lives of Indian women but gendered realities continue to reflect in their status in a family every day.
The iconic utterance by French writer Jean-Baptiste Alphonse Karr more than 150 years ago “The more things change the more they remain the same” accurately sums up the current situation of women in India — a fact ratified by a Pew Research Center report last week which focuses on social and demographic empirical research globally. As we celebrate Women’s Day the report’s findings assume a stark significance as they suggest that ostensibly several changes may have taken place in the lives of Indian women but gendered realities continue to reflect the status quo. Predicated on face-to-face interviews of 29999 adults aged 18 years and above the survey was conducted between November 2019 and March 2020 in 17 languages. The respondents were selected to cover all religious groups and the data was weighed to align with the demographic benchmarks for the adult Indian population. Widely publicised as the Pew Center’s most comprehensive and in-depth assessment of public opinion in India the report’s analysis of perceptions highlights the persistence of patriarchy in both work- related and domestic settings in the country.
The most obvious contradiction emerging from the report is that universally all adults including men averred that it is important for women to enjoy the same rights as men and as many as eight out of 10 respondents stated that ensuring this equality is ‘very important’. Paradoxically however 87 per cent of the total respondents and surprisingly 80 per cent of the college-educated among them also completely or mostly agreed with the premise that “a wife must always obey her husband”. What is even more noteworthy is that 61 per cent of female respondents concurred with the notion.
This trend of vocally supporting an overall egalitarian attitude towards gender equality but adhering to traditional gender roles in lived realities is seen in other spheres too.For instance most of the respondents asserted that both men and women should share family responsibilities but 62 per cent opined that child care is a woman’s domain and 34 per cent felt that it was her exclusive responsibility. Similarly 43 per cent of the adults said that only men should be breadwinners implying that women ought to confine themselves to home. Compared to global trends it was found that 40 per cent of Indians supported this dynamic of family life as compared with a corresponding global median of 23 per cent indicating that Indians are likely to harbour more conservative gender notions than other peoples.
The most glaring example of patriarchal attitudes is reflected in the suggestion made by an overwhelming majority of the interviewees at 94 per cent that a family must have at least one son. The survey documents that four out of 10 Indians find it “completely or somewhat acceptable” to use modern medical methods to “balance the number of girls and boys”. This is absolutely in convergence with the widely prevalent custom of son preference in Indian households to the extent that it often leads to sex-selective abortions.
The issue of son preference has also been examined in detail by the India Human Development Survey (IHDS) a multi-topic longitudinal survey of over 41000 households by the National Council of Applied Economic Research (NCAER) in collaboration with the University of Maryland in two rounds in 2004-05 and 2011-12. Since the IHDS contains several questions on families and gender relations it offers clairvoyant results on various gender-based issues including matrimonial practices in the community fertility history and quality of marital relationships between women and husbands. Interestingly most of the women who expressed a preference for sons over daughters in the IHDS sample lacked access to both employment and empowerment. While one of the most prominent reasons for son preference as per IHDS was support in old age the Pew survey also found that nearly two-thirds of Indians who want to have male offspring is because sons are primarily responsible for their parents’ last rites and rituals.
Another important gender-based outcome of the Pew report pertains to perceptions about labour force participation. Here too the bias tilts in favour of men with as many as 80 per cent of the respondents explicitly saying that “when there are not enough jobs men should have more rights to get the jobs than women”. In this context Indians had much more traditional views than their counterparts in North America West Europe and Latin America. This attitude combined with a decline in jobs perhaps accounts for the lowest rates of female workforce participation in India at 21 per cent versus the global median of 53 per cent. The IHDS also notes that even when employed women consistently earn less than men in both agricultural wage work and salaried employment.
Although there are some variations in the results based on region and religion the Pew report by and large raises several red flags on gender outcomes in India especially because women seem equally complicit as men in their subjugation. It is amply clear that the road to gender equality is long and arduous and this journey has to be traversed hand-in-hand by both men and women.
(The writer is the editor at the National Council of Applied Economic Research NCAER. The views expressed are personal.)
India’s structural transformation directly from agriculture to the services sector without going through the intermediate step of agriculture to manufacturing to services has opened up policy challenges. While manufacturing can potentially create low-skilled labour-intensive jobs, it is the services sector that has proved to be the most dynamic. The debate between manufacturing and services has been going for long in India. We illustrate here that both manufacturing and services are inter-dependent on each other. The auto sector, one of the largest sub-sectors in the manufacturing sector is a case in point.
Senior Advisers: Shashanka Bhide and Sanjib Pohit
