CLASS XII (CBSE) IED NOTES
Employment – Growth, Informalisation, and
Other Issues (Chapter 6)
📌 Chapter Overview
● This chapter explores employment-related concepts, including worker-population ratio, types of
workers, sectoral employment trends, informalisation of labour, and unemployment issues.
● It examines India’s workforce structure, employment trends, and government initiatives for
employment generation.
● The role of economic growth in job creation and employment quality is also discussed.
1️⃣ Introduction
● People work in various occupations: farming, industries, banks, shops, government offices, IT, and
handicrafts.
● Work-from-home culture emerged significantly during COVID-19 (2020–21).
● Employment provides self-worth, financial independence, and contributes to national income.
● Studying employment patterns helps in planning human resources and addressing social issues
like child labour and gender disparities.
● Mahatma Gandhi emphasized employment through craft-based education.
2️⃣ Workers and Employment
Key Definitions
1. Employment: Engaging in productive economic activities that contribute to national income.
2. Worker: Anyone involved in an economic activity, whether self-employed, salaried, or casual labour.
3. Economic Activity: Any activity that generates goods and services contributing to GDP.
Types of Workers
● Self-employed: Own and operate businesses (e.g., shopkeepers, farmers).
● Regular Salaried Employees: Work in government or private sector jobs with fixed wages and
benefits.
● Casual Wage Labourers: Work irregularly and are paid on a daily or contractual basis.
📊 India’s Workforce (2017-18)
● 471 million workers.
● ⅔ of the workforce resides in rural areas.
● 77% of workers are men, 23% are women.
● Many women are unpaid family workers.
3️⃣ Worker-Population Ratio
● Worker-Population Ratio = (Total workers / Total population) × 100
● Indicates the proportion of people engaged in economic activities.
Worker-Population Ratio in India (2017-18)
Category Total (%) Rural (%) Urban (%)
Men 52.1 51.7 53.0
Women 16.5 17.5 14.2
Total 34.7 35.0 33.9
Key Observations
● Rural women participate more than urban women due to economic necessity.
● Urban women have fewer employment opportunities due to social norms and family income.
● Gender disparity is high in employment.
4️⃣ Types of Employment
📊 Distribution of Employment (2017-18)
Type of Worker % of Workforce
Self-Employed 52%
Casual Wage Labourers 25%
Regular Salaried 23%
Employees
Self-Employed Workers
● Own businesses and control production.
● Most common employment type (52%) in India.
● Common in rural areas (agriculture, small shops).
Casual Wage Labourers
● Work irregularly and lack job security.
● Found in construction, agriculture, and domestic work.
● Most vulnerable group with low wages.
Regular Salaried Employees
● Receive fixed salaries with social security benefits.
● More common in urban areas.
● Includes government employees, bank workers, and corporate jobs.
📊 Employment in Rural vs. Urban Areas
Category Rural (%) Urban (%)
Self-Employed 58% 47%
Casual Labourers 29% 15%
Regular 13% 38%
Employees
📝 Key Insights
● Self-employment dominates in rural India, while regular salaried jobs dominate in urban areas.
● Casual wage labour is more common in rural areas due to seasonal agricultural jobs.
5️⃣ Employment by Sector
📊 Sectoral Employment Distribution (2017-18)
Sector Rural (%) Urban (%) Total (%)
Primary (Agriculture, Mining) 59.8 6.6 44.6
Secondary (Manufacturing, Construction, Electricity) 20.4 34.3 24.4
Tertiary (Services, IT, Banking, Trade) 19.8 59.1 31.0
📝 Observations
● Primary sector (Agriculture) still employs the most people, but its share is decreasing.
● Services sector is the largest employer in urban areas.
● Women are more concentrated in agriculture due to fewer industrial jobs.
6️⃣ Employment Growth and Jobless Growth
📊 Employment Growth vs. GDP Growth (1951-2012)
● GDP grew faster than employment → Jobless Growth.
● Employment growth stagnated at ~2%, despite GDP growth.
📝 Why Jobless Growth?
1. Technology replaced labour (automation in factories).
2. Growth concentrated in capital-intensive industries, not labour-intensive ones.
3. More casual and informal jobs instead of regular salaried jobs.
7️⃣ Informalisation of Workforce
● 94% of India’s workforce is in the informal sector.
● Formal sector (Public & Private) employs only 6%.
● Informal workers lack job security, health benefits, and social security.
📊 Workers in Formal vs. Informal Sector (2011-12)
Worker Type Male Female
Formal 24 million 6 million
Informal 310 million 133 million
📝 Why Informalisation?
● Lack of formal job opportunities.
● Factories replaced permanent jobs with contract work.
● Unorganised small enterprises employ most workers.
📌 Case Study: Ahmedabad Textile Mill Closure
● 80,000 workers lost jobs and were pushed into informal employment.
● Families fell into poverty; children left school to work.
8️⃣ Unemployment in India
Types of Unemployment
1. Open Unemployment: People actively seeking jobs but not finding work.
2. Disguised Unemployment: More workers employed than needed (e.g., farming).
3. Seasonal Unemployment: Work available only for certain months (e.g., harvesting).
4. Underemployment: Workers doing jobs below their skill level.
📝 Unemployment Issues
● Rural areas suffer from seasonal and disguised unemployment.
● Urban areas face underemployment due to skill-job mismatch.
9️⃣ Government Employment Generation Initiatives
Direct Initiatives
● Government jobs in public sector.
● Infrastructure projects (e.g., road construction, irrigation projects).
Indirect Initiatives
● Supporting private industries to boost job creation.
● Encouraging MSMEs (Micro, Small, and Medium Enterprises).
📌 Key Employment Schemes
1. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
○ 100 days of guaranteed wage employment.
○ Focus on rural unskilled workers.
2. Skill India Mission
○ Provides vocational training to boost employability.
3. Startup India & Standup India
○ Supports entrepreneurs and self-employed individuals.
🔚 Conclusion
● Employment in India is shifting from agriculture to services.
● Jobless growth is a concern as GDP rises but employment doesn’t.
● Informalisation is increasing, leading to job insecurity.
● Government initiatives aim to boost employment, but more reforms are needed.
📌 Key Takeaway: India must focus on creating formal, secure jobs to ensure sustainable employment
growth. 🚀
