How agriculture could solve India’s unemployment crisis


Two years after millions of daily betting workers returned home, walking hundreds of miles on foot, after a lockdown was suddenly imposed, the Indian Economy Monitoring Center (CMIE) has released a study on India’s labor force participation rate which says 900 million people are not even interested in getting a job. “They even stopped looking for a job, perhaps too disappointed not to have found a job, thinking that there were no jobs available,” the report said.

In a country where job creation is at the top of the country’s political agenda, you will agree that 900 million people who are not claiming any jobs are no small number. It is almost equal to the combined population of Russia and the United States. The fact that such a large proportion of the Indian population is disenchanted with any possibility of finding a decent job and has instead decided to abandon the employment register, is a sign of a historical error in thinking and economic approach. The biggest tragedy though is that we still fail to recognize where we went wrong.

When the lockdown happened, around 100 million people had walked back between states and within states, many with their children on their laps and luggage to drag. The reverse migration the country witnessed on its television channels was perhaps no less distressing than the migration that shook the country at the time of partition. Some migrant workers returned to cities when the pandemic subsided, but a majority preferred to stay. Despite such a large influx, a struggling agriculture was still able to absorb the additional migrant labor.

The CMIE now says that in March alone, manufacturing jobs fell by 16.7 million. Agriculture made up for lost jobs, adding another 15.3 million to the already existing workforce. But I still find that mainstream economic thinking relies on reviving non-agricultural activities, not agriculture, to create many job opportunities. This is what Economic 101 programmed us to believe – to achieve higher economic growth; the number of people dependent on agriculture must be reduced. This outdated economic thinking continues to dominate our public policy. Even now, as the world experiences growing job losses, with automation and artificial intelligence taking over industrial production, our economic thinking – irrelevant as it may be in the age when we live – has not changed. While a sharp drop in job opportunities by big industry is being reported, some media publications even prefer to quote a 2020 McKinsey Global Institute study, which says India needs to create an additional 90 million jobs by 2030. In my opinion, this is outdated economic thinking, a narrative constructed at a time when neoliberal economics was beginning to dominate. It still continues to prevail. I find that even some of the best minds, and that includes economists, academics and writers, are unable to look beyond what they studied in their graduate courses. Times have changed, and so have employment dynamics, but not our economic thought process.

Let’s first try to see what we’re missing. In both cases – first the period of confinement and now the plunge in the labor force participation rate in March 2022 – the underlying message is that agriculture, despite neglect and apathy over decades , alone has the potential to absorb large swaths of the population. Instead of pushing small farmers to migrate to cities in search of menial jobs, revitalizing agriculture can easily turn the tide and create gainful employment. Give farmers a guaranteed price, along with increased public sector investment, and agriculture can easily turn into an engine of economic growth. And let me repeat that agriculture alone has the potential to revive the economy. After all, the 900 million people who have lost interest in looking for a job are not sitting idly by. Whether we like it or not, the majority of them have a foothold in agriculture and, with their household food security assured, they can be engaged in other part-time pursuits. Instead of still hoping that one day the manufacturing sector will get back on track and that the higher economic growth projections that we continue to make – 9% and more – will create additional non-farm jobs, the good challenge that the policy makers need to take now is to focus on rebuilding agriculture.

Although many economists feel elated when certain reports appearing at different times indicate an increase in the rate of emigration from villages, this economic thinking was born out of a mindset that refuses to see change on the horizon. With around 50% of India’s population, or just over 600 million, dependent on agriculture, the challenge should be how to make farming a viable business. Instead of pushing people out of villages, the best option would be to make villages prosperous. Just because the United States and the European Union have relentlessly pushed the agricultural population to move to the cities doesn’t mean we too have to blindly follow this prescription.

Let’s not forget that a farmer is also an entrepreneur. Although they have small land holdings, 86% owning less than 5 acres, they continue to produce a record crop year after year. With a continued decline in public sector investment in agriculture, which the RBI had in a study estimated at around 0.4% of GDP between 2011-12 and 2017-18, we cannot expect small farmers work a miracle. . But they continue to provide a solid economic base on which the country can rely. If only we had given farmers what is rightfully theirs and provided them with the right kind of public infrastructure, I am sure they would be able to turn farming into a preferred economic enterprise for the future.

But first and foremost, our policy makers must recognize the historical error of treating agriculture as an economic burden, of treating agriculture as a laggard. For a long time I have argued that the policy of sacrificing agriculture for industrial growth only contributes to the creation of a mighty army of agricultural refugees, who are deliberately driven out of agriculture to invade cities. in search of cheap labour. The overemphasis on the industrial sector had diverted the attention of the agrarian community. It was a mistake.

If only we had stood firm and instead focused on resurrecting agriculture, this would have been the most appropriate way to reach Sabka Saath Sabka Vikas. Instead of worrying about the lack of off-farm employment, let’s focus on the need to make agriculture a viable entity.

(The author is a renowned food policy analyst and expert on issues related to the agricultural sector. He writes on food, agriculture and hunger)


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