Workforce, WPR & Formal-Informal Sector

6.1 Introduction — The Many Faces of Work in India

Step out of your home and you will see people earning their bread in the most varied ways: a farmer is bent over a paddy field, a tailor stitches at a sewing machine, a software engineer codes from a city office, a young woman in Jalandhar stitches footballs at home for a multinational brand, and a mother weaves cane mats in a village courtyard. The picture has only become richer since the Covid-19 pandemic of 2020–21, when millions of workers moved their jobs into the home through "work-from-home" technology.

Why do people work? NCERT answers this question on two levels. People work first to earn a living, but a salary alone does not satisfy a human being — even those who have inherited wealth often confess to feelings of emptiness. Being employed gives people a sense of self-worth, helps them relate meaningfully to others, and contributes to the national income^? of the country. Mahatma Gandhi went further: he insisted that education itself should run through a variety of crafts, because work is part of being fully human.

Studying about working people gives us insight into the quality and nature of employment in India and helps us plan our human resources. It tells us how different industries contribute to national income, and forces us to confront painful issues like exploitation, child labour and the invisibility of women's domestic work.

6.2 Workers and Employment — Who Counts as a Worker?

Begin with a simple example. A farmer growing paddy produces foodgrains and raw materials. Cotton becomes cloth in textile mills and powerlooms. Lorries carry goods from one place to another. Add up the money value of all such final goods and services produced in a country in a year, and you get its Gross Domestic Product (GDP). When we adjust GDP for net foreign earnings (exports minus imports), we get the country's Gross National Product (GNP). The figure can be positive (if exports are larger), negative (if imports dominate) or zero.

This definition is broader than ordinary speech. Even when a person temporarily abstains from work due to illness, injury, bad weather, or a religious or social function, they remain a worker. Helpers of main workers are also counted. And — most importantly — those who are self-employed^? are workers, even though no employer pays them. This means that a pavement vegetable vendor, a doctor running her own clinic, a lawyer with his own chamber and a self-employed handloom weaver are all workers.

The nature of employment in India is multifaceted. Some people get work for the entire year, some for only a few months. Many do not earn fair wages. According to NCERT, during 2022–23, India had a workforce^? of about 545 million. Out of about 471 million classified rural and urban workers, the rural share is roughly two-thirds. About 77 per cent of workers are men, and only the remaining quarter are women — and even this small female share is concentrated in unpaid household-linked tasks like fetching water, cooking, fuelwood collection and farm labour without cash wages. Many women, NCERT notes, are therefore not even counted as workers, though economists argue they should be.

6.3 Participation of People in Employment — The Worker-Population Ratio

How do we know whether a country is putting its people to work? Economists use a single indicator called the Worker-Population Ratio^?. It tells us what proportion of the population is actively contributing to the production of goods and services. A higher ratio means more people are at work; a low or medium ratio means a very large share of the population is not engaged in economic activity.

NSSO/PLFS data for 2023–24 give a clear picture. For every 100 people in India, about 41 are workers (rounded from 41.1). In rural India the ratio is about 42 and in urban India about 38. Why are urban people less active in the workforce? Because urban families can afford to keep children in schools, colleges and training institutes; and urban adults can wait for a job that suits their skills. Rural families do not have that luxury — economic compulsion forces participation.

The table reveals two striking facts. First, males participate at almost double the rate of females. Second, the gap is widest in cities — for every 100 urban women, only about 21 (more recent data round it to roughly 21) are in any economic activity. In rural areas the figure rises to about 35 women per 100. Why does this happen? When men are able to earn high incomes, families discourage women from taking up jobs. And many household activities done by women — cooking, cleaning, childcare, family-farm labour — are not recognised as productive work, leading to their non-recognition and an underestimation of women workers in the country.

6.4 Employment in Firms, Factories & Offices — Formal vs Informal

NCERT next asks a deeper question: does the worker-population ratio say anything about the quality of employment? Two workers may both be counted as workers, yet one may have a permanent salary, paid leave, provident fund and a pension, while the other has none. To distinguish the two, NCERT splits the entire workforce into two great compartments — the formal sector^? and the informal sector^? — also called the organised and the unorganised sectors.

NCERT then shares a striking number: in 2019–20 there were about 535 million workers in India, of whom only about 59 million were in the formal sector. That is just 11 per cent (calculated as 59 ÷ 535 × 100). The remaining 89 per cent were in the informal sector — without any safety net. This forms the moral and policy heart of this chapter and the launchpad for the next part.