• What is employment? Who is a worker? When a farmer works on fields, he or she produces food grains and raw materials for industries.
  • We know that the total money value of all such goods and services produced in a country in a year is called its gross domestic product for that year.
  • When we also consider what we pay for our imports and get from our exports we find that there is a net earning for the country which may be positive (if we have exported more in value terms than imported) or negative (if imports exceeded exports in value terms) or zero (if exports and imports were of the same value). When we add this earning (plus or minus) from foreign transactions, what we get is called the country‘s gross national product for that year.
  • Those activities which contribute to the gross national product are called economic activities. 
  • The nature of employment in India is multifaceted. Some get employment throughout the year; some others get employed for only a few months in a year. Many workers do not get fair wages for their work. While estimating the number of workers, all those who are engaged in economic activities are included as employed. 
  • About 70 per cent of the workers are men and the rest are women (men and women include child labourers in respective sexes). Women workers account for one-third of the rural workforce whereas in urban areas, they are just one-fifth of the workforce.


  • Worker-population ratio is an indicator which is used for analysing the employment situation in the country. This ratio is useful in knowing the proportion of population that is actively contributing to the production of goods and services of a country.
  • If the ratio is higher, it means that the engagement of people is greater; o if the ratio for a country is medium, or low, it means that a very high proportion of its population is not involved directly in economic activities.


  • In this process, workers migrate from rural to urban areas. Eventually, at a much later stage, the industrial sector begins to lose its share of total employment as the service sector enters a period of rapid expansion. This shift can be understood by looking at the distribution of workers by industry. They are

(i) Agriculture

(ii) Mining and Quarrying

(iii) Manufacturing

(iv) Electricity, Gas and Water Supply

(v) Construction

(vi) Trade

(vii) Transport and Storage and

(viii) Services.

For simplicity, all the working persons engaged in these divisions can be clubbed into three major sectors viz.

(a) primary sector which includes (i) and (ii)

(b) secondary sector which includes (iii), (iv) and

(v) and (c) service sector which includes divisions (vi), (vii) and (viii).


  • Here we will look at two developmental indicators — growth of employment and GDP.
  • During the period 1960–2000, Gross Domestic Product (GDP) of India grew positively and was higher than the employment growth. However, there was always fluctuation in the growth of GDP. During this period, employment grew at a stable rate of about 2 per cent.


  • There are three sources of data on unemployment : Reports of Census of India, National Sample Survey Organisation‘s Reports of Employment and Unemployment Situation and Directorate General of Employment and Training Data of Registration with Employment Exchanges.
  • Economists call unemployment prevailing in Indian farms as disguised unemployment. What is disguised unemployment? Suppose a farmer has four acres of land and he actually needs only two workers and himself to carry out various operations on his farm in a year, but if he employs five workers and his family members such as his wife and children, this situation is known as disguised unemployment.


  • The government passed an Act in Parliament known as the National Rural Employment Guarantee Act 2005. It promises 100 days of guaranteed wage employment to all rural households who volunteer to do unskilled manual work. This scheme is one of the many measures governments implement to generate employment for those who are in need of jobs in rural areas.

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