Occupational Structure

J. Krishnamurty
• Economic growth is associated with a relative shift in the structure of the
workforce away from agriculture, towards industry and services:
o Primary product importers like Great Britain: agriculture's share has
declined to less than 4 per cent,
o Specialized primary producers like Australia, Denmark and New
Zealand: agriculture's share has declined to 10-5 per cent
• Simon Kuznets: finds India to be the only case of a virtually unchanged
employment structure
• 1881 and 1911
o The share of agriculture (defined to include activities allied to agriculture
as well as general labour) hardly changed; it rose from 72.4 to 74.5 per
cent of the workforce
o Share of manufacturing fell. Manufacture and trade and commerce are
pooled, there is still a decline from 15.5 to 14.6 per cent of the workforce.
o Within services there is a decline in 'other services' from 9.8 to 7.7 per
cent.
• But, real output did not decline in absolute or per head terms.
• In fact, it probably increased: Heston: 1868-69 to 1872-73 and 1908-09 to
1912-13 real net domestic product (NDP) rose by 53 per cent, while
population increased by only 18 per cent.
• Between 1900 and 1947 real NDP per head in undivided India rose by about
12 per cent but if we exclude all services there was virtually no increase over
the period.
• The structure of the workforce did not change much between 1901 and 1951
• Comparing the industrial distributions of real output and employment:
o Initially, output per worker in the agricultural sector was slightly below average;
by the end of the period it had fallen further below average output per worker in the
economy
o Output per worker in the industrial sector which was initially above the average
became even more above average,
o While the output per worker of the services sector rose from just below average
to well above average by the end of the period
• Indian and the international experience.
o The relative product per worker in the agricultural sector declines from an initial
value of less than 1 and
o The corresponding ratio for the industrial sector tends to increase over time,
though the initial level in the Indian case is rather high compared to most other
countries except the USA.
o The behaviour of the services sector in India is the converse of the international
experience: it rises from below 1 to well above 1.
o Again, in marked contrast to most other countries, the index of inter-sectoral
inequality rises in India from 17.5 to 36.2, elsewhere it declined from around 25
or more to about 20.
• Changes in the employment pattern for undivided India between 1901 and
1951 (male)
o cultivators and agricultural labourers there was a slight rise in relative shares
o the share of plantations, forestry, fishing etc. sharply declined
o mining and quarrying rose, but was small (Bihar and West Bengal)
o Bihar was responsible for about 40 per cent of the increase in employment
between 1911 and 1951
o share of manufacturing in the workforce remained constant for males in
undivided India
o construction rose slightly over the period, but through the period the share remained
small.
o increase in the share of trade and commerce
o In transport, storage and communications there was a slight increase in the
relative share over the period.
o Finally, in other services, there was a slight fall, though the numbers in public,
educational, medical and legal services certainly increased.
• Manufacturing sector something more can be said about changes in its internal
composition between 1901 and 1951 (males and females)
o factory employment in manufacturing in undivided India rose from 0.6 to 2.9
million
o Small-scale enterprises, declined from 12.6 to 11.4 million
• Heston's national income estimates:
o the real income produced by the manufacturing sector rose by 98 per cent
between 1900-1/1904-5 and 1942-3/1946-7.
o The real output of small-scale industry according to these estimates rose by 14
per cent between 1900-1/1904-5 and 1942-3/1946-7.
• Between 1911 and 1951 employment increased absolutely in beverages,
tobacco, jute textiles, miscellaneous textiles, wood and wooden products, paper
and paper products, printing and publishing, rubber, petroleum and coal,
chemicals and chemical products, metals and metal products, machinery,
electrical equipment and transport equipment
• Foodstuffs, cotton textiles, silk textiles, wool textiles, leather and leather
products, and non-metallic mineral products (other than petroleum and coal
products) declined absolutely
• But taking the entire manufacturing sector into account, its share in total
employment did not decline if we rely on the figures for males.
• The estimates for males and females together, while we do get a decline from
9.6 per cent in 1911 to 8.7 per cent in 1951, this cannot be described as
deindustrialization, for there was a significant relative and absolute increase in
the output of the manufacturing sector
• In many states of India, too, there was virtually no change in the structure
of the workforce. These were mainly concentrated in central India: Uttar
Pradesh, Bihar, Madhya Pradesh, Andhra Pradesh and Gujarat.
• In four states, there was a marked shift away from agriculture: Kerala,
Maharashtra, Madras and West Bengal.
• In four other states, Rajasthan, Orissa, east and west Punjab and East
Bengal, there was a marked rise in agriculture's share over the period
KERALA
• Throughout the twentieth century, less than 60 per cent of Kerala's working
population was engaged in agriculture, while more than 6 per cent worked in
livestock, forestry, fishing, and plantations, and 12-15 per cent were in
manufacturing.
• During the half-century that followed, there was a further shift away from
agriculture and towards manufacturing and services
• Within services the bulk of the increase was in transport, storage and
communications and other services. Curiously enough, employment in trade
and commerce declined relatively.
• Within manufacturing the bulk of the increase came in sugar production,
cashew-nut processing, cotton textiles (mill and non-mill), coir and coir
products, made-up textiles, wood and wooden products and non-metallic
mineral products.
o Over half the persons engaged in manufacturing were women and they
were mainly working in the coir and cashew industries.
• Aggregate value of trade rose from Rs. 150,000 in 1870 to about Rs.
10,50,000 in the 1920s
o The major exports of Kerala in the 1920s included coffee, coir, lemongrass oil,
coconut oil, rubber, spices, tea and rope
o 1930s new commodity, cashew kernels from Travancore, entered the world
market. Cashew exports alone were worth in 1930 about Rs. 75,000.
• Expanding exports increased demand for services expansion of
employment in transport, storage and communication and other services, but did
not result in a rapid growth in the numbers employed
• Kerala in 1911 there was about half a person in public services (i.e., general
administration)
o As a result there was a more rapid increase in literacy and a sharper decline in
mortality in Kerala than in India as a whole
o literates to the population aged over 5 rose in Kerala from 26.7 per cent in 1911 to
53.8 per cent in 1951
o The death rate in Kerala in 1951 had come down to 16.1 per 1,000, while the Indian
rate was 27.4 per 1,000.
WEST BENGAL
• During the latter half of the nineteenth century the growth of tea and jute
had been important factors in the growth of Calcutta
• In West Bengal in 1911, the employment in jute processing was large,
accounting for about 40 per cent of total (male and female) manufacturing
employment, but in 1951, its share had declined to 24 per cent.
• The lead within manufacturing had shifted to the iron and steel engineering
industries
• Between 1920 and 1937 pig-iron production in India grew by about 400 per
cent and steel by even more.
o Tata's Jamshedpur plant in Bihar, and the Indian Iron and Steel Company's plant at
Asansol in West Bengal and Steel Corporation of Bengal
• Employment of persons in West Bengal in the production of basic metals
and metal products (including machinery) quadrupled between 1911 and
1951
• In West Bengal the expansion in manufacturing employment was due to the
factory sector: employment of persons in factories grew from 300,000 to about
700,000 between 1911 and 1951; employment in small-scale production
remained at about 600,000.
o Three districts, Howrah, Twenty-Four-Parganas and Hooghly accounted for 83 per
cent of factory workers.
• Rural Bengal did not progress during the period. Agricultural growth may
have been positive, but it certainly was slow
• While the indirect effects of this expansion in urban Bengal may have been
significant
o urban areas where the railways were built in the nineteenth century, the commercial
and financial institutions created by the jute and tea trade, combined with cheap coal
and steel to create a modern industrial structure.
o But growth remained narrow: it reinforced, rather than overcame, the rural-urban
dichotomy.
RAJASTHAN
• In Rajasthan there was a massive shift away from manufacturing and
services towards agriculture. This resulted from the collapse of pre-modern
manufacturing activity within un-integrated sub-economies following the
economic integration brought about by the railway; at the same time,
employment opportunities in agriculture expanded
• Before the railway, camels provided the main form of transport
o In 1881 there were hardly 400 miles of railways in the area, but by 1931 the system
had been greatly extended: there were over 2,900 miles of track and most places
were within 50 miles of a railway station.
o This revolution in transport had far reaching consequences, as a wide range of local
manufactures faced national and international competition for the first time.
Employment declined substantially in cotton textiles, leather and leather
products and in the manufacture of earthenware and earthen pottery
• Camel and goat hair bags and sacks were at one time in great demand for
carrying grain on camels but the machine made gunny bag now so common
all over the country is responsible for a falling off in this industry'.
• Important changes occurred in Rajasthan's agriculture.
o In the dry tracts the area under cultivation and the area irrigated were
expanding rapidly, while in the already irrigated area multiple cropping
was being extended.
o As a result, cultivated area per head of population did not decline, and
irrigation made it possible for the land to support a larger population.
o There was a great expansion in the production of high-value crops like
wheat, pulses, oilseeds and cotton which were probably on the average
more labour-intensive than the dry crops they replaced.
EAST PUNJAB
• There was marked shift away from manufacturing and services towards
agriculture in East Punjab
• It is nevertheless clear that rapid agriculture growth did not take place in east
Punjab, the growth rate being less than 1 per cent per annum between 1900
and 1947
• Male employment in manufacturing declined from about 572,000 to about
378,000 between 1911 and 1951.
o mainly in foodstuffs, cotton textiles, wood and wooden products, leather and leather
products and non-metallic mineral products: largely traditional activities unable to
withstand competition from the modern sector
• The focus of growth in the Punjab during this period was in the west and
that perhaps men, materials and enterprise gravitated westward leaving behind a
stagnant east
o western districts could have been as high as 4 per cent per annum between 1900 and
1947
• One would therefore expect that employment in manufacturing expanded greatly
in west Punjab, but this does not appear to be the case: male employment rose
from 519,000 to 685,000, but its share in the male workforce declined from 15.6
to 11.4 per cent between 1911 and 1951.
• The undoubted increase in agricultural incomes must have increased the demand
for non-agricultural goods; but, to a large extent, this must have been met by
'imports' from other parts of India
CONCLUSION
• The Indian occupational structure showed little sign of change over the whole
period 1881-1951.
• Agriculture's share remained at about 70 per cent, manufacturing at about 10 per
cent and services at about 15—20 per cent over the period.
• Between 1901 and 1951 factory employment expanded partly at the expense of
the non-factory sector
• While the share of transport, storage and communications rose, for the other
branches of services trends are unclear. Many services associated with
modernization under colonial rule expanded, in particular public, educational,
medical and legal services.
• Patterns of change varied widely over the sub-continent; in Kerala, Madras,
Maharashtra, and West Bengal the share of agriculture declined and the shares of
manufacturing and services increased; in Orissa, Rajasthan, East Bengal and the
Punjab the share of agriculture rose and the shares of manufacturing and
services fell; and in the other states trends are unclear
• In Kerala, economic progress centred around the development of labour-
intensive processing industries and plantations often catering to foreign markets.
• In West Bengal, foreign demand stimulated the jute industry until about 1920.
Subsequently, a conjunction of favourable circumstances led to an import-
substituting group of iron and steel and engineering industries especially in the
Asansol-Calcutta region
• In Rajasthan, railway development destroyed premodern manufacturing, but this
was at least partially compensated by the expansion of agriculture.
• In Punjab, the east declined as agriculture stagnated; in the west, agriculture
boomed, but manufacturing lagged behind as 'imports' partially supplanted
domestic production. These examples indicate the importance of foreign and
inter-regional trade, resource availabilities, transport facilities, and expansion in
cultivable areas in explaining the changes that occurred.
• It is significant that the states in which there was a marked shift away from
agriculture - Kerala, Madras, Maharashtra and West Bengal — had extensive
coastal tracts with sea-ports and in each the ports were well connected with the
hinterland
• Irrigation (Kerala) and railway development (Maharashtra and West Bengal, and
to a lesser extent in Madras) varied greatly in terms of extent and impact in
different parts of India
• The huge decline in employment in cotton textiles in Rajasthan must therefore
be attributed to the flood of Indian, not imported, textiles from Western India
taking advantage of the system of railway rates.
• The eastern Indian rail system in conjunction with the other facilities already
present in Calcutta for the jute and tea trades, helped develop steel and steel-
using industries in the Asansol-Calcutta region.