NCERT Textbook - Employment: Growth, Informalisation and Other Issues Commerce Notes | EduRev

Economics Class 12

Created by: Lakshya Ias

UPSC : NCERT Textbook - Employment: Growth, Informalisation and Other Issues Commerce Notes | EduRev

 Page 1


116 INDIAN ECONOMIC DEVELOPMENT
 After studying this chapter, the learners will
• understand a few basic concepts relating to employment such as
economic activity, worker, workforce and unemployment
• understand the nature of participation of men and women in various
economic activities in various sectors
• know the nature and extent of unemployment
• assess the initiatives taken by the government in generating employment
opportunities in various sectors and regions.
EMPLOYMENT : GROWTH,
INFORMALISATION
AND OTHER ISSUES
7
2015-16(20/01/2015)
Page 2


116 INDIAN ECONOMIC DEVELOPMENT
 After studying this chapter, the learners will
• understand a few basic concepts relating to employment such as
economic activity, worker, workforce and unemployment
• understand the nature of participation of men and women in various
economic activities in various sectors
• know the nature and extent of unemployment
• assess the initiatives taken by the government in generating employment
opportunities in various sectors and regions.
EMPLOYMENT : GROWTH,
INFORMALISATION
AND OTHER ISSUES
7
2015-16(20/01/2015)
117 EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES
7.1 INTRODUCTION
People do a variety of work.
Some work on farms, in
factories, banks, shops and
many other workplaces; yet a
few others work at home. Work
at home includes not only
traditional work like weaving,
lace making or variety of
handicrafts but also modern
jobs like programming work in
the IT industry. Earlier factory
work meant working in
factories located in cities
whereas now technology has
enabled people to produce those
factory-based goods at home in
villages.
Why do people work? Work plays
an important role in our lives as
individuals and as members of society.
People work for ‘earning’ a living. Some
people get, or have, money by inheriting
it, not working for it. This does not
completely satisfy anybody. Being
employed in work gives us a sense of
self-worth and enables us to relate
ourselves meaningfully with others.
Every working person is actively
contributing to national income and
hence, the development of the country
by engaging in various economic
activities — that is the real meaning of
‘earning’ a living. We do not work only
for ourselves; we also have a sense of
accomplishment when we work to meet
the requirements of those who are
dependent on us. Having recognised
the  importance of work, Mahatma
Gandhi insisted upon education and
training through a variety of works
including craft.
Studying about working people
gives us insights into the quality and
nature of employment in our country
and helps in understanding and
planning our human resources. It helps
us to analyse the contribution made by
different industries and sectors towards
national income. It also helps us to
address many social issues such as
exploitation of marginalised sections of
the society, child labour etc.
What I object to, is the ‘craze’ for machinery, not machinery as such. The
craze is for what they call labour-saving machinery. Men go on ‘saving labour’
till thousands are without work and thrown on the open streets to die of
starvation...
Mahatma Gandhi
Fig. 7.1 Multinational companies sell footballs
made in the houses of Jalandhar , Punjab
2015-16(20/01/2015)
Page 3


116 INDIAN ECONOMIC DEVELOPMENT
 After studying this chapter, the learners will
• understand a few basic concepts relating to employment such as
economic activity, worker, workforce and unemployment
• understand the nature of participation of men and women in various
economic activities in various sectors
• know the nature and extent of unemployment
• assess the initiatives taken by the government in generating employment
opportunities in various sectors and regions.
EMPLOYMENT : GROWTH,
INFORMALISATION
AND OTHER ISSUES
7
2015-16(20/01/2015)
117 EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES
7.1 INTRODUCTION
People do a variety of work.
Some work on farms, in
factories, banks, shops and
many other workplaces; yet a
few others work at home. Work
at home includes not only
traditional work like weaving,
lace making or variety of
handicrafts but also modern
jobs like programming work in
the IT industry. Earlier factory
work meant working in
factories located in cities
whereas now technology has
enabled people to produce those
factory-based goods at home in
villages.
Why do people work? Work plays
an important role in our lives as
individuals and as members of society.
People work for ‘earning’ a living. Some
people get, or have, money by inheriting
it, not working for it. This does not
completely satisfy anybody. Being
employed in work gives us a sense of
self-worth and enables us to relate
ourselves meaningfully with others.
Every working person is actively
contributing to national income and
hence, the development of the country
by engaging in various economic
activities — that is the real meaning of
‘earning’ a living. We do not work only
for ourselves; we also have a sense of
accomplishment when we work to meet
the requirements of those who are
dependent on us. Having recognised
the  importance of work, Mahatma
Gandhi insisted upon education and
training through a variety of works
including craft.
Studying about working people
gives us insights into the quality and
nature of employment in our country
and helps in understanding and
planning our human resources. It helps
us to analyse the contribution made by
different industries and sectors towards
national income. It also helps us to
address many social issues such as
exploitation of marginalised sections of
the society, child labour etc.
What I object to, is the ‘craze’ for machinery, not machinery as such. The
craze is for what they call labour-saving machinery. Men go on ‘saving labour’
till thousands are without work and thrown on the open streets to die of
starvation...
Mahatma Gandhi
Fig. 7.1 Multinational companies sell footballs
made in the houses of Jalandhar , Punjab
2015-16(20/01/2015)
118 INDIAN ECONOMIC DEVELOPMENT
7.2 WORKERS  AND EMPLOYMENT
What is employment? Who is a worker?
When a farmer works on fields, he or
she produces food grains and raw
materials for industries. Cotton
becomes cloth in textile mills and in
powerlooms. Lorries transport goods
from one place to another. 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. All those who are
engaged in economic activities, in
whatever capacity — high or low, are
workers. Even if some of them
temporarily abstain from work due to
illness, injury or other physical
disability, bad weather, festivals, social
or religious functions, they are also
workers.  Workers also include all those
who help the main workers in these
activities. We generally think of only
those who are paid by an employer for
their work as workers. This is not so.
Those who are self-employed are also
workers.
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. You might be
interested in knowing the number of
people actively engaged in various
economic activities. During 2011-12,
India had about a 473 million strong
workforce. Since majority of our people
reside in rural areas, the proportion of
workforce residing there is higher. The
Work This Out
Ø In your house or
neighbourhood, you might
come across many women
who, even though they
have technical degrees
and diplomas and also free
time to go to work, do not
go to work. Ask them the
reasons for not going to
work. List all of them and
discuss in the classroom
whether they should go for
work and why, and also
ways by which they could
be sent for work.  Some
social scientists argue that
housewives working at
home without getting paid
for that work must also be
regarded as contributing to
the gross national product
and therefore, as engaged
in an economic activity.
Would you agree?
2015-16(20/01/2015)
Page 4


116 INDIAN ECONOMIC DEVELOPMENT
 After studying this chapter, the learners will
• understand a few basic concepts relating to employment such as
economic activity, worker, workforce and unemployment
• understand the nature of participation of men and women in various
economic activities in various sectors
• know the nature and extent of unemployment
• assess the initiatives taken by the government in generating employment
opportunities in various sectors and regions.
EMPLOYMENT : GROWTH,
INFORMALISATION
AND OTHER ISSUES
7
2015-16(20/01/2015)
117 EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES
7.1 INTRODUCTION
People do a variety of work.
Some work on farms, in
factories, banks, shops and
many other workplaces; yet a
few others work at home. Work
at home includes not only
traditional work like weaving,
lace making or variety of
handicrafts but also modern
jobs like programming work in
the IT industry. Earlier factory
work meant working in
factories located in cities
whereas now technology has
enabled people to produce those
factory-based goods at home in
villages.
Why do people work? Work plays
an important role in our lives as
individuals and as members of society.
People work for ‘earning’ a living. Some
people get, or have, money by inheriting
it, not working for it. This does not
completely satisfy anybody. Being
employed in work gives us a sense of
self-worth and enables us to relate
ourselves meaningfully with others.
Every working person is actively
contributing to national income and
hence, the development of the country
by engaging in various economic
activities — that is the real meaning of
‘earning’ a living. We do not work only
for ourselves; we also have a sense of
accomplishment when we work to meet
the requirements of those who are
dependent on us. Having recognised
the  importance of work, Mahatma
Gandhi insisted upon education and
training through a variety of works
including craft.
Studying about working people
gives us insights into the quality and
nature of employment in our country
and helps in understanding and
planning our human resources. It helps
us to analyse the contribution made by
different industries and sectors towards
national income. It also helps us to
address many social issues such as
exploitation of marginalised sections of
the society, child labour etc.
What I object to, is the ‘craze’ for machinery, not machinery as such. The
craze is for what they call labour-saving machinery. Men go on ‘saving labour’
till thousands are without work and thrown on the open streets to die of
starvation...
Mahatma Gandhi
Fig. 7.1 Multinational companies sell footballs
made in the houses of Jalandhar , Punjab
2015-16(20/01/2015)
118 INDIAN ECONOMIC DEVELOPMENT
7.2 WORKERS  AND EMPLOYMENT
What is employment? Who is a worker?
When a farmer works on fields, he or
she produces food grains and raw
materials for industries. Cotton
becomes cloth in textile mills and in
powerlooms. Lorries transport goods
from one place to another. 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. All those who are
engaged in economic activities, in
whatever capacity — high or low, are
workers. Even if some of them
temporarily abstain from work due to
illness, injury or other physical
disability, bad weather, festivals, social
or religious functions, they are also
workers.  Workers also include all those
who help the main workers in these
activities. We generally think of only
those who are paid by an employer for
their work as workers. This is not so.
Those who are self-employed are also
workers.
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. You might be
interested in knowing the number of
people actively engaged in various
economic activities. During 2011-12,
India had about a 473 million strong
workforce. Since majority of our people
reside in rural areas, the proportion of
workforce residing there is higher. The
Work This Out
Ø In your house or
neighbourhood, you might
come across many women
who, even though they
have technical degrees
and diplomas and also free
time to go to work, do not
go to work. Ask them the
reasons for not going to
work. List all of them and
discuss in the classroom
whether they should go for
work and why, and also
ways by which they could
be sent for work.  Some
social scientists argue that
housewives working at
home without getting paid
for that work must also be
regarded as contributing to
the gross national product
and therefore, as engaged
in an economic activity.
Would you agree?
2015-16(20/01/2015)
119 EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES
rural workers constitute about three-
fourth of this 473 million. Men form the
majority of workforce in India. 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. Women
carry out works like cooking, fetching
water and fuelwood and participate in
farm labour. They are not paid wages
in cash or in the form of grains; at
times they are not paid at all. For this
reason, these women are not
categorised as workers. Economists
have argued that these women should
also be called workers.
7.3 PARTICIPATION OF PEOPLE IN
EMPLOYMENT
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; 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.
You might have already studied,
in lower classes, the meaning of the
term ‘population’. Population is
defined as the total number of people
who reside in a particular locality at
a particular point of time. If you want
to know the worker-population ratio
for India, divide the total number of
workers in India by the population in
India and multiply it by 100, you will
get the worker-population ratio for
India.
If you look at Table 7.1, it shows
the different levels of participation of
people in economic activities. For
every 100 persons, about 39 (by
rounding off 38.6) are workers in
India. In urban areas, the proportion
is about 36 whereas in rural India, the
ratio is about 40. Why is there such a
difference? People in rural areas have
limited resources to earn a higher
income and participate more in the
employment market. Many do not go
to schools, colleges and other training
institutions. Even if some go, they
discontinue in the middle to join the
workforce; whereas, in urban areas, a
considerable section is able to study in
various educational institutions. Urban
people have a variety of employment
opportunities. They look for the
appropriate job to suit their
qualifications and skills. In rural areas,
people cannot stay at home as their
economic condition may not allow them
to do so.
TABLE 7.1
Worker-Population Ratio in India,
2009-2010
Sex W orker-Population Ratio
Total Rural Urban
Men 54.4 54.3 54.6
W omen 21.9 24.8 14.7
Total 38.6 39.9 35.5
2015-16(20/01/2015)
Page 5


116 INDIAN ECONOMIC DEVELOPMENT
 After studying this chapter, the learners will
• understand a few basic concepts relating to employment such as
economic activity, worker, workforce and unemployment
• understand the nature of participation of men and women in various
economic activities in various sectors
• know the nature and extent of unemployment
• assess the initiatives taken by the government in generating employment
opportunities in various sectors and regions.
EMPLOYMENT : GROWTH,
INFORMALISATION
AND OTHER ISSUES
7
2015-16(20/01/2015)
117 EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES
7.1 INTRODUCTION
People do a variety of work.
Some work on farms, in
factories, banks, shops and
many other workplaces; yet a
few others work at home. Work
at home includes not only
traditional work like weaving,
lace making or variety of
handicrafts but also modern
jobs like programming work in
the IT industry. Earlier factory
work meant working in
factories located in cities
whereas now technology has
enabled people to produce those
factory-based goods at home in
villages.
Why do people work? Work plays
an important role in our lives as
individuals and as members of society.
People work for ‘earning’ a living. Some
people get, or have, money by inheriting
it, not working for it. This does not
completely satisfy anybody. Being
employed in work gives us a sense of
self-worth and enables us to relate
ourselves meaningfully with others.
Every working person is actively
contributing to national income and
hence, the development of the country
by engaging in various economic
activities — that is the real meaning of
‘earning’ a living. We do not work only
for ourselves; we also have a sense of
accomplishment when we work to meet
the requirements of those who are
dependent on us. Having recognised
the  importance of work, Mahatma
Gandhi insisted upon education and
training through a variety of works
including craft.
Studying about working people
gives us insights into the quality and
nature of employment in our country
and helps in understanding and
planning our human resources. It helps
us to analyse the contribution made by
different industries and sectors towards
national income. It also helps us to
address many social issues such as
exploitation of marginalised sections of
the society, child labour etc.
What I object to, is the ‘craze’ for machinery, not machinery as such. The
craze is for what they call labour-saving machinery. Men go on ‘saving labour’
till thousands are without work and thrown on the open streets to die of
starvation...
Mahatma Gandhi
Fig. 7.1 Multinational companies sell footballs
made in the houses of Jalandhar , Punjab
2015-16(20/01/2015)
118 INDIAN ECONOMIC DEVELOPMENT
7.2 WORKERS  AND EMPLOYMENT
What is employment? Who is a worker?
When a farmer works on fields, he or
she produces food grains and raw
materials for industries. Cotton
becomes cloth in textile mills and in
powerlooms. Lorries transport goods
from one place to another. 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. All those who are
engaged in economic activities, in
whatever capacity — high or low, are
workers. Even if some of them
temporarily abstain from work due to
illness, injury or other physical
disability, bad weather, festivals, social
or religious functions, they are also
workers.  Workers also include all those
who help the main workers in these
activities. We generally think of only
those who are paid by an employer for
their work as workers. This is not so.
Those who are self-employed are also
workers.
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. You might be
interested in knowing the number of
people actively engaged in various
economic activities. During 2011-12,
India had about a 473 million strong
workforce. Since majority of our people
reside in rural areas, the proportion of
workforce residing there is higher. The
Work This Out
Ø In your house or
neighbourhood, you might
come across many women
who, even though they
have technical degrees
and diplomas and also free
time to go to work, do not
go to work. Ask them the
reasons for not going to
work. List all of them and
discuss in the classroom
whether they should go for
work and why, and also
ways by which they could
be sent for work.  Some
social scientists argue that
housewives working at
home without getting paid
for that work must also be
regarded as contributing to
the gross national product
and therefore, as engaged
in an economic activity.
Would you agree?
2015-16(20/01/2015)
119 EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES
rural workers constitute about three-
fourth of this 473 million. Men form the
majority of workforce in India. 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. Women
carry out works like cooking, fetching
water and fuelwood and participate in
farm labour. They are not paid wages
in cash or in the form of grains; at
times they are not paid at all. For this
reason, these women are not
categorised as workers. Economists
have argued that these women should
also be called workers.
7.3 PARTICIPATION OF PEOPLE IN
EMPLOYMENT
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; 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.
You might have already studied,
in lower classes, the meaning of the
term ‘population’. Population is
defined as the total number of people
who reside in a particular locality at
a particular point of time. If you want
to know the worker-population ratio
for India, divide the total number of
workers in India by the population in
India and multiply it by 100, you will
get the worker-population ratio for
India.
If you look at Table 7.1, it shows
the different levels of participation of
people in economic activities. For
every 100 persons, about 39 (by
rounding off 38.6) are workers in
India. In urban areas, the proportion
is about 36 whereas in rural India, the
ratio is about 40. Why is there such a
difference? People in rural areas have
limited resources to earn a higher
income and participate more in the
employment market. Many do not go
to schools, colleges and other training
institutions. Even if some go, they
discontinue in the middle to join the
workforce; whereas, in urban areas, a
considerable section is able to study in
various educational institutions. Urban
people have a variety of employment
opportunities. They look for the
appropriate job to suit their
qualifications and skills. In rural areas,
people cannot stay at home as their
economic condition may not allow them
to do so.
TABLE 7.1
Worker-Population Ratio in India,
2009-2010
Sex W orker-Population Ratio
Total Rural Urban
Men 54.4 54.3 54.6
W omen 21.9 24.8 14.7
Total 38.6 39.9 35.5
2015-16(20/01/2015)
120 INDIAN ECONOMIC DEVELOPMENT
Compared to females, more males
are found to be working. The difference
in participation rates is very large in
urban areas: for every 100 urban
females, only about 15 are engaged in
some economic activities. In rural areas,
for every 100 rural women about 25
participate in the employment market.
Why are women, in general, and urban
women, in particular, not working? It
is common to find
that where men are
able to earn high
incomes, families
discourage female
members from
taking up jobs.
Going back to
what has already
been mentioned
above, many activi-
ties for the household
engaged in by women
are not  recognised as
productive work.
This narrow defini-
tion of work leads to
non-recognition of
women’s work and, therefore, to the
underestimation of the number of
women workers in the country. Think
of the women actively engaged in many
activities within the house and at family
farms who are not paid for such work.
As they certainly contribute to the
maintenance of the household and
farms, do you think that their number
should be added to the number of
women workers?
7.4 SELF-EMPLOYED AND HIRED
WORKERS
Does the worker-population ratio say
anything about workers’ status in
society or about the working
conditions? By knowing the status
with which a worker is placed in an
enterprise, it may be possible to know
one dimension — quality of employment
in a country. It also enables us to know
the attachment a worker has with his
Fig. 7.2 Brick-making: a form of casual work
Work These Out
Ø Any study of employment
must start with a review
of the worker-population
ratios — why?
Ø In some communities, you
might have noticed that
even if the males do not
earn a high income, they do
not send women to work.
Why?
2015-16(20/01/2015)
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