Rural services to help partially offset job market losses in August

The growth in services jobs in rural India indicates an increase in economic activity and the shift of workers from farm to largely informal non-farm jobs. According to the latest monthly data from the Center for Monitoring Indian Economy (CMIE), it is mostly driven by retail trade and non-professional services.

While nationally, the manufacturing sector laid off about 940,000 workers in mining, the number of people employed fell by at least 1 million in August compared to July. Like many other sectors, real estate and construction also cut the workforce by 599,000. Agriculture lost about 7.5 million jobs in August.

However, services in rural India added 8.4 million jobs to ease the situation, followed by employers in utilities, where there was a marginal increase of 80,000 people employed across India.

Even in services, job creation is not spread evenly across the sub-segments. While urban service sector jobs remained stable in August, rural workers grew.

A cropped view of the rural services sector shows that of the 8.4 million jobs, at least 5.5 million were in retail; This was followed by personal, non-professional services or support services, adding 3.5 million people; 438,000 in wholesale trade; and a modest increase of about 100,000 in software services and back-office outsourcing jobs.

But again in rural service sectors, jobs were lost in financial employment (over 300,000), communications and logistics (over 200,000), healthcare (about 370,000), education and hotel industries.

Experts and economists argued that the regional and sub-regional employment numbers indicate that job creation is taking place in the periphery, with the core sectors failing to deliver. He warned that such jobs would not encourage private consumption.

“We are losing jobs in financial establishments, rural logistics and healthcare and education, but additional ones are in personal, non-professional service and retail trade. Hence employment generation is taking place in the peripheral and unorganized sector,” said KR Shyam Sundar, labor economist and professor at XLRI Jamshedpur.

“For years, India’s non-farm formal sector growth outside cities and urban centers has been poor. Inclusion of people in non-farm jobs means informal retail trade. Moreover, EPFO ​​payroll data also indicates growth of specialist services like small contractual and gig work, and these are not formal jobs. These are part-time contractual work and will not lead to private consumption,” Sundar said.

Arup Mitra, professor of economics at Delhi University, said the data shows that after the sowing season in rural India, people are moving from agriculture to retail trade and non-professional service jobs. “They are not good jobs, but less productive jobs—better than being unemployed. They are kind of disguised unemployment because core sector jobs are not available,” Mitra explained.

“Monsoon may have partially affected some sectors like mining and construction, but it is a fact that manufacturing as an umbrella sector is still far from its pre-pandemic status, and again companies will be able to move forward depending on the situation. Adopting tailored technology. The threat of pandemic is still on,” said Sundar.