Introduction
Agriculture in India holds untapped potential for job creation. By re-imagining agriculture as a “farm as a factory,” producing crops for further value addition, India can create jobs in the countryside.
Converting onion and tomato to paste and puree can add value to produce and create employment, similar to what sugar mills and dairies have achieved.
Current Employment Scenario
Decline in Unincorporated Sector Employment: The number of workers in unincorporated sector enterprises has fallen from 11.13 crore in 2015-16 to 10.96 crore in 2022-23. The drop is mainly in manufacturing, which saw a decline from 3.60 crore to 3.06 crore. In contrast, trade slightly increased from 3.87 crore to 3.90 crore, and "other services" rose from 3.65 crore to 4 crore.
Impact of Triple Shocks: The reduction in employment is attributed to demonetisation, the goods and services tax rollout, and the pandemic-induced lockdowns between 2016-17 and 2021-22. These shocks severely impacted informal enterprises, which traditionally absorb large masses of unskilled/semi-skilled labor.
Informal Sector as a Shock Absorber: The informal sector has historically acted as a buffer during economic downturns, particularly for those unable to find employment in formal sectors or agriculture, especially during years of crop failure.
Challenges in Employment Transition
Formal Sector Expansion: There is no reliable data to confirm an expansion in formal sector employment, which may offset the decline in the unincorporated sector. If formalization has occurred, it could be beneficial, as informal firms typically have low productivity and pay low wages.
Characteristics of Informal Firms: These firms have small-scale operations and low productivity, resulting in low wages for workers. The average annual emoluments per hired employee in unincorporated sector enterprises were just Rs 1,24,482 during 2022-23.
Structural Transformation: Genuine structural transformation requires transferring surplus labor from informal sectors (including agriculture and construction) to formal sectors (manufacturing and high-productivity services). However, the transition is challenging due to the capital-intensive nature of modern manufacturing and the skill demands of the IT and services sectors.
Agriculture as a Job Creator
Capital-Intensive Manufacturing: The manufacturing sector is becoming more capital-intensive with automation, artificial intelligence, and machine learning technologies, reducing labor demand. This shift limits the sector's ability to absorb surplus labor from agriculture and informal sectors.
Skill Demands in IT and Services: IT, accountancy, and financial services demand skills that many in India’s working population lack, creating a skills mismatch and limiting employment opportunities in these high-productivity sectors.
Agriculture’s Potential: Agriculture can create jobs in aggregation, grading, processing, packaging, transporting, warehousing, retailing of produce, and supply of inputs and services to farmers. This potential remains largely untapped due to a lack of infrastructure and investment in value addition processes.
Re-imagining Agriculture
Farm as a Factory: Viewing farms as factories producing raw materials for value addition can generate employment. Converting onion and tomato to paste and puree can replicate the success of sugar mills and dairies, which have not only added value to produce but also created numerous jobs in rural areas.
Job Creation in Rural Areas: This approach can create jobs in rural areas, adding value to produce and boosting the rural economy. It requires investment in infrastructure, such as cold storage facilities, processing units, and efficient supply chains.
Conclusion
By re-imagining agriculture and adopting a vision of the “farm as a factory,” India can create jobs in the countryside and add value to agricultural produce.
This strategy requires investment in infrastructure and support for value addition processes.
Tapping agriculture's potential can lead to significant economic and social benefits, addressing both unemployment and rural development.
Importance for Exam Preparation
This article is crucial for UPSC CAPF Assistant Commandant exam preparation. Understanding the potential of agriculture in job creation is essential for essay writing.
It provides insights into current affairs, which are vital for the CAPF AC syllabus 2024. The recommendations and economic context discussed here offer valuable content for essays on similar topics.
Comments