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Salaried jobs are hardly growing — govt data explains the Agnipath anger of young Indians

Government’s latest Periodic Labour Force Survey, released last week, shows that India’s salaried class has grown 3 percentage points & 1 percentage point in rural & urban areas.

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New Delhi: The Modi government’s Agnipath scheme for short-term recruitment in the armed forces has triggered anger in several parts of the country.

From Bihar to Uttar Pradesh and Telangana, youngsters have taken to the roads, vandalising public property, especially trains, which have also been subjected to arson.

But why exactly has the scheme seemingly made so many of India’s youngsters so angry?

The government’s latest Periodic Labour Force Survey (PLFS) — covering the period from July 2020 to June 2021 (amid the pandemic), and released last week — may hold the answer.  

Conducted across rural and urban India, the survey — aimed at measuring employment and unemployment in the country — shows that India’s salaried class has grown just over 3 percentage points in rural areas and less than 1 percentage point in urban areas in the last decade.  

The survey defines “regular/salaried employees” as “persons who worked in others’ farm or non-farm enterprises (both household and non-household)” and, in return, received salary or wages on a regular basis (i.e. not on the basis of daily or periodic renewal of work contract). 

This category includes paid apprentices, both full-time and part-time.

According to the latest PLFS, 13 per cent of rural households are regular salary/wage-earners, compared to 9.6 per cent in 2011-12. 

The urban salaried class now stands at 42.5 per cent of the workforce, compared to 41.7 per cent in 2011-12.

Credit: ThePrint Team
Credit: ThePrint Team

The data for 2011-12 is from the National Sample Survey Organisation (NSSO), under the Ministry of Statistics and Programme Implementation. The PLFS, launched by the National Statistical Office (NSO, under the same ministry), was first carried out in 2017-18

The share of the salaried class stood at 12.7 per cent in rural areas in 2017-18, and 41.4 per cent in urban. 

Agnipath is a short-term recruitment scheme that envisages inducting youth aged between 17.5 and 21 years (23 for this year) into India’s armed forces for a period of four years.  

Critics’ argument against the new policy is that, at the end of the four years, the armed forces will absorb only 25 per cent of those recruited in a batch. 

Additionally, these recruits, or ‘Agniveers’, won’t be entitled to a dearness allowance or pension like regular soldiers.

Those protesting against the scheme are believed to comprise mostly youngsters who have been preparing for defence recruitment exams in the hope of getting a stable job.

According to Professor Archana Prasad, a professor at Jawaharlal Nehru University’s Centre for Informal Sector and Labour Studies, the apparent rise in the proportion of salaried class in the PLFS is misleading because it now includes gig workers and drivers (for example, delivery executives for food aggregators). 

“The minute growth in the share of salaried/regular wage-earners stems from the informalisation of the labour that has happened over the last decade,” she said. 

“You see, these wage-earners are getting only a salary and no employee benefits like Provident Fund (PF), paid leaves, job security etc.”

These, she added, are the parameters that broadly distinguish the formal sector from the informal one. “Seen in this context, the Agnipath scheme will not meet the aspirations of the youth.” 

Also Read: Crushed dreams, low morale, pressure from home — Why many army hopefuls in Bihar are anti-Agnipath

Sluggish growth of quality jobs

Defence recruitments, like the Indian Railways, have traditionally been the biggest government job providers. However, in the last 6 years, the railways has done away with 72,000 positions. 

The Army stopped its recruitments due to Covid-19 for two years. Slow or no recruitments have resulted in various protests.

The latest PLFS covered over 1 lakh households (55,300 rural and 44,950 urban), including more than 4 lakh people.

The survey estimates that about 54 per cent of the rural households engaged in any economic activity were self-employed in 2020-21

An estimated 24.2 per cent were casual labourers — or “people casually engaged in others’ farm or non-farm enterprises and, in return, received wages according to the terms of the daily or periodic work contract”.  

About 8 per cent were classified as “others”. 

In urban India, nearly 33 per cent of the workforce was self-employed, while 12 per cent worked as casual labourers. 

Regional disparities

The 13 per cent salaried class in rural areas is an all-India estimate. Data from PLFS 2020-21 shows that Bihar and Uttar Pradesh, currently the epicentre of the Agnipath protests, are also the ones where the salaried class forms a minority of the working class.

In Bihar, the share of the salaried class to the total working population is 6.5 per cent, according to PLFS data. 

Graphic: ThePrint Team
Graphic: ThePrint Team

In urban areas, only 24 per cent of the households in the state earn a regular salary/wage — the lowest in the country. 

Compared to 2017-18, the size of the salaried class fell in 2020-21. In 2017-18, about 9.5 per cent of rural households in Bihar and about 25 per cent of urban households earned a regular wage/salary. 

In Uttar Pradesh — the country’s most populous state — 7.2 per cent of people in rural areas earned a regular salary/wage in 2020-21, compared to 7.3 per cent in 2017-18. The figure for urban areas was 35.1 per cent in 2020-21, compared to 32.1 per cent in 2017-18.

The salaried class in rural areas is believed to form a large share of defence recruits. 

According to data shared by the Ministry of Defence in response to a question in the Lok Sabha, nearly 78 per cent of the 54,431 Army recruits in 2018-19 came from rural India. In 2019-20, 77 per cent of 80,000 new recruits came from rural areas.

Pressure to earn

There’s another factor that the PLFS highlights about the pressure these young aspirants have upon them — fending for their families.

The survey showed that the dependency ratio — the proportion of the non-working population, i.e. children (0-14 years) and elders (65 and above) for every 100 working people (15-64-year-olds) is also highest in the states with low regular salary earners.  

This ratio is the highest in Bihar, where, for every 100 working people, there are 58 who depend on them.

Credit: ThePrint Team
Credit: ThePrint Team

A scheme like Agnipath is unlikely to bring any changes in the unemployment scenario if the growth in regular jobs remains sluggish, said Prasad.

“The young angry aspirants are aspiring for all the benefits of a formal job economy and quality jobs,” she said. “Their frustration manifests from the fact that these desired jobs have not risen at all.” 

The solution, according to Prasad, is massive public investment in creating formal employment, not schemes like Agnipath. 

I don’t think the scheme will be helpful in solving India’s unemployment problems. What happens after four years of training if formal jobs haven’t risen,” she said.

“The huge reserve of unemployed youth basically makes the labour cheaper, which reduces their likelihood of earning more. I don’t think giving military training to the unemployed youth for four years and bringing them back to the job market is the solution when salaried jobs aren’t increasing fast.”

Also Read: Financial aid, jobs, education drives — How BJP wants CMs to ‘placate Agnipath protesters’

Self-employment not as lucrative

The majority of rural India residents who are engaged in an economic activity are self-employed, as is around a third of urban India, according to PLFS data. 

The central government under Prime Minister Narendra Modi has been incentivising self-employment to help create jobs. 

In 2015, the central government launched Pradhan Mantri Mudra Yojana, known simply as Mudra, to facilitate self-employment. The scheme offers collateral-free loans of up to Rs 10 lakh to micro/small business enterprises and individuals to enable them to set up or expand their business activities.

Credit: ThePrint Team
Credit: ThePrint Team

PLFS data on average monthly income earned by workers shows that income from self-employment — such as selling pakoras, opening a grocery shop at home — is 30-40 per cent of the wages earned by the salaried class. 

For instance, in rural India, on average, a regular salary/wage-earner was paid a little over Rs 15,000/month, while a self-employed person earned about Rs 10,000 in the month preceding the survey.

(Edited by Uttara Ramaswamy)

Also Read: Coaching centres in UP, Bihar caught in the crosshairs in wake of Agnipath protests


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