Rural Distress, Farmer Suicides, Drought Measures

[op-ed snap] The map of rural deprivation

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Mains Paper 3: Economy | Development and employment

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: The news card talks about SECC, rural employment issue and its relation with infrastructure/construction sector.


Information from the Socio Economic and Caste Census (SECC)

  1. The SECC informed us that ‘landlessness and dependence on manual casual labour for a livelihood are key deprivations facing rural families’, which make them far more vulnerable to impoverishment

Mapping of deprivation using seven indicators

  1. The rural census, or SECC, mapped deprivation using seven indicators
    (1) households with a kuchha house
    (2) without an adult member in working age
    (3) headed by a woman and without an adult male in working age
    (4) with a disabled member and without able-bodied adult
    (5) of Scheduled Castes/Scheduled Tribes (SC/ST)
    (6) without literate adults over 25 years; and
    (7) the landless engaged in manual labour
  2. The more the number of parameters on which a household is deprived, the worse its extent of poverty
  3. Nearly 30% have two deprivations, 13% have three
  4. Only 0.01% suffer from all seven handicaps’
  5. The intersection of any of the six other handicaps with “landless labour” makes it more acute

Farm size is dropping

  1. The overall farm size, which has been dropping since the early 1970s, and down from the 2.25 hectares (ha) average to a 1.25 ha average in 2010, will continue to become even smaller
  2. For these farmers, agricultural incomes are also likely to fall, hastening the exodus from agriculture

Two demographic groups are doing good reasonably well in labour market

  1. National Sample Survey (NSS) data show that there are two demographic groups which did reasonably well in labour market outcomes both in terms of job growth as well as wage growth between 2004-5 and 2011-12
    (1) the young who were getting educated at hitherto unheard of rates, and
    (2) the older, poorly educated cohort of landless labour in agriculture, who saw construction work rise sharply

Importance of the construction sector

  1. Employment in the construction sector increased 13 times during the past four decades, which led to its share in rural employment rising from 1.4% in 1972-73 to 10.7% in 2011-12
  2. This sector absorbed 74% of the new jobs created in non-farm sectors in rural areas between 2004-05 and 2011-12
  3. These trends indicate that rural areas witnessed a construction boom after 2004-05
  4. Further, growth in employment in the construction sector was higher than output growth during both periods under consideration

Possible reason behind construction sector boom

  1. One reason for the much higher growth in the number of rural workers in construction over the manufacturing or services sectors is that there are fewer skill and educational requirements in construction
    Other important reasons
  2. This was possible because of the sustained growth in investment in infrastructure, especially over the 11th Five Year Plan period (2007-12) of $100 billion per annum, two-thirds of which was public, and the remainder private
  3. In addition, there was a real boom in real estate, residential and commercial, throughout the country

Construction sector is slowing down now

  1. Since 2011-12 construction job growth has slowed, such that the share of construction in total youth employment fell to 13.3%
  2. Construction jobs are growing more slowly since 2011-12, as public investment has fallen
  3. And with the rising non-performing assets of banks, private investment has fallen as well
  4. The result: fewer workers have been leaving agriculture since 2011-12
  5. From the 5 million leaving agriculture per annum between 2004-5 to 2011-12, the number is down to just over 1 million per annum between 2011-12 to 2015-16
  6. This is hurting landless labour and small and marginal farmers the most

Government efforts to revive the infrastructure sector

  1. The Union government has sustained rural development expenditure for the last two years, especially for rural roads, under the Pradhan Mantri Gram Sadak Yojana and rural housing under the Pradhan Mantri Awas Yojana (Urban)
  2. The Surface Transport Ministry has also attempted to sustain public investment in infrastructure to generate construction jobs for growing surplus rural labour

The way forward

  1. The Budget for 2018-19 should sustain this public investment effort
  2. The announcement that the government plans to borrow an additional Rs. 50,000 crore in this financial year, is welcome
  3. Hopefully, the intention here is to raise public investment, especially for infrastructure investment
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