The map of rural deprivation 

The map of rural deprivation 

Context

With the Union Budget to be presented on February 1, it is hoped that the Finance Minister will make a significantly higher allocation for investment in infrastructure. It is vital for addressing rural distress. The Socio Economic and Caste Census (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.

Based on indicators

• The rural census, or SECC, mapped deprivation using seven indicators:
• ‘households with a kuchha house;
• without an adult member in working age;
• headed by a woman and without an adult male in working age;
• with a disabled member and without able-bodied adult;
• of Scheduled Castes/Scheduled Tribes (SC/ST);
• without literate adults over 25 years;
• and the landless engaged in manual labour

Findings of the SECC

The more the number of parameters on which a household is deprived, the worse its extent of poverty

• Nearly 30% have two deprivations, 13% have three. Only 0.01% suffer from all seven handicaps’
• While 48.5% of all rural households suffer from at least one deprivation indicator, “landless households engaged in manual labour” are more vulnerable.
• Nearly 54 million households are in the landless-labourer category; assuming that each such household has five members, that makes 250 million of the nearly 850-900 million rural population
• This number is almost certainly an underestimate, since 84% of all those who even hold agricultural land are small and marginal farmers.
• The intersection of any of the six other handicaps with “landless labour” makes it more acute
• The SECC also said that ‘59% of households with kuchha houses are landless labourers; similarly, 55% of those with no literate adult above 25 years and 54% each of SC/ST households and female-headed households without adult male members are also landless households
• At the same time, 47% households without an adult member of working age are landless labourers as are 45% of those with disabled members and no able-bodied adult members’.

Farmer distress

Along with landless families, small and marginal farmers are getting pauperised and more engaged in manual labour

Farm size dropping

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

Incomes likely to fall

For these farmers, agricultural incomes are also likely to fall, hastening the exodus from agriculture.

Growing distress

In fact, farmer distress has been growing, with the past year witnessing farmers protesting on the streets in several States

NSS data

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

• These were the young who were getting educated at hitherto unheard of rates
• And the older, poorly educated cohort of landless labour in agriculture, who saw construction work rise sharply.

The Question

However, the question is: does the economy have the capacity to create non-agricultural jobs for both groups whose numbers will grow over the next decade until 2030?

The Young remain in education

• The young have been entering and remaining in education in unprecedented numbers for the last two decades
• Hence, as a result, while the young joining the labour force has been just 2 million per annum between 2004-5 and 2015-16, from this point onwards, the numbers of the young will indeed grow significantly.

Construction employment

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

This sector absorbed 74% of the new jobs created in non-farm sectors in rural areas between 2004-05 and 2011-12

Construction boom

These trends indicate that rural areas witnessed a construction boom after 2004-05

• 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.

Unprecedented

Construction employment grew at a remarkable rate from 1999-2000 onwards. While it employed only 17 million in that year, the number jumped to 26 million by 2004-5. However, what happened after that was totally unprecedented

• It grew to 51 million by 2011-12, which is a doubling in seven years or a tripling in 12 years from the turn of the millennium.
• 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
• In addition, there was a real boom in real estate, residential and commercial, throughout the country. However, private investment is now much lower than earlier.

Illiterate in constructionrose in number

It is estimated from NSS and Labour Bureau data that the absolute number of those in construction who were illiterate was 11 million in 2004-5, but which rose to 19 million in 2011-12.

Slow growth now

Construction jobs are growing more slowly since 2011-12, as public investment has fallen. And with the rising non-performing assets of banks, private investment has fallen as well

The result: fewer workers have been leaving agriculture since 2011-12

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.

Hurting landless labour

This is hurting landless labour and small and marginal farmers the most, since their households had benefited the most from the tightening of the labour market that had ensued in rural and urban areas because of rising construction jobs

Rise in rural demand

Rural demand in particular has risen, raising consumer demand for simple manufactured goods, especially in the unorganised manufacturing sector, raising employment in those sectors especially in rural areas.

Sustained rural expenditure by the central government

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

The budget should sustain this effort

The Budget for 2018-19 should sustain this public investment effort

• The announcement that the government plans to borrow an additional ₹50,000 crore in this financial year, is welcome
• Hopefully, the intention here is to raise public investment, especially for infrastructure investment.