Self-Employed, Casual, Regular & Informalisation

6.5 Self-Employed, Casual Wage and Regular Salaried Workers

The Worker-Population Ratio tells us how many people work. To learn about the quality of work, NCERT asks us to look at the status with which a worker is placed inside an enterprise. Status reveals the worker's attachment to the job, the authority she has over the work, and her relationship with co-workers.

NCERT illustrates this with three workers from the construction industry — a cement-shop owner, a construction worker, and a civil engineer employed by a construction company. All three contribute to building houses and roads, yet each holds a very different position in the labour market.

Distribution Across Gender — Chart 6.1

NCERT's Chart 6.1 (Distribution of Employment by Gender) shows that self-employment is a major source of livelihood for both men and women, accounting for more than 50 per cent in each category. For male workers, the split is approximately 54% self-employed, 25% regular salaried and 21% casual. For female workers, the split is far more skewed: about 67% self-employed, 16% regular salaried and 17% casual. Casual wage work is the second-largest category for women — a worrying sign of low job quality.

When it comes to regular salaried jobs, men dominate at about 21 per cent against 16 per cent for women — a gap that NCERT calls "less" but persistent. This means that even when women do work outside the home, they are less likely to find permanent, secure jobs.

Distribution Across Region — Chart 6.2

NCERT's Chart 6.2 (Distribution of Employment by Region) breaks the same numbers between rural and urban India. The contrast is stark: self-employed workers are far more concentrated in rural areas (~65%) than in urban areas (~40%), because most rural households own small plots of land and cultivate independently. In urban areas, both regular wage employment and casual labour are larger because cities house factories, shops and offices that need regular workers.

Why this difference? In urban areas, factories, shops and offices need workers on a regular basis. In rural areas, the majority depends on farming on owned land, which is itself a form of self-employment. NCERT also stresses that the most vulnerable group is the casual wage labourer, exposed to seasonal idleness, accidents and abrupt job loss.

6.6 Distribution of Workers by Industry — Primary, Secondary, Tertiary

In the course of economic development, labour flows away from agriculture into industry and services. Workers migrate from villages to cities, and at a much later stage even the industrial sector loses share as the service sector enters a period of rapid expansion. NCERT divides all economic activity into eight industrial divisions, then groups them into three sectors:

The table teaches us four lessons. First, the primary sector remains the main employer of Indians at 46 per cent. Second, the secondary sector employs only about 24 per cent, far less than what was hoped for after seven decades of planning. Third, the service sector employs about 30 per cent, and is rising fastest. Fourth, gender concentration is sharply different — about 64 per cent of women workers are stuck in the primary sector, while only 36 per cent of men are. Men have escaped into secondary and tertiary work; women have not, mainly due to lower mobility and skill access.

In rural India, about 60 per cent of workers depend on agriculture, forestry and fishing; about 21 per cent are in manufacturing/construction/other industry; and about 19 per cent in services. In urban India, agriculture is a tiny employer — about 61 per cent of urban workers are in services, and another third in industry.

6.7 Growth and Changing Structure of Employment — Jobless Growth, Casualisation

NCERT now compares two indicators side-by-side: growth of GDP and growth of employment. The expectation is straightforward — when GDP rises, jobs should rise alongside. But what really happened in India during 1950–2010?

During the period 1950–2010, Gross Domestic Product (GDP) of India grew positively and was higher than the employment growth, although there was always fluctuation in the growth of GDP. During this period, employment grew at the rate of not more than 2 per cent. Maintaining even 2 per cent employment growth in a country as large as India is itself a feat — but the gap between GDP growth and employment growth has steadily widened.

Trends in Employment Pattern — Table 6.3

NCERT records two parallel trends — sectoral movement and status movement — over five decades.

Reading the sector rows: in 1972-73, about 74 per cent of the workforce was in the primary sector; by 2023-24, this share has fallen to about 46 per cent. The secondary sector has risen from 11 to 24 per cent, and services from 15 to 30 per cent. NCERT calls this structural change^? — a healthy sign of development.

But the status rows tell a more troubling story. Over the five decades from 1972 to 2017, India saw a movement away from self-employment and regular salaried jobs into casual wage work. NCERT calls this process casualisation^?. It makes workers highly vulnerable. Looking at the most recent column, however, NCERT highlights a moderate rise in regular salaried employment — from 18 per cent in 2011-12 to 21.7 per cent in 2023-24 — possibly reflecting service-sector formalisation and digitisation of payrolls.

6.8 Informalisation of the Indian Workforce

NCERT picks up the formal-informal split from the previous section and asks the harder follow-up: even after 70 years of planning, why has India failed to formalise its workforce?

One of the objectives of development planning since Independence has been to provide a decent livelihood to its people. Industrialisation was expected to absorb surplus farm workers into factories with rising standards of living, as in developed countries. Yet more than half of Indian workers still depend on farming. Economists argue that the quality of employment has actually been deteriorating — even after working for 10–20 years, many workers do not get maternity benefit, provident fund, gratuity or pension. A private-sector worker often earns less than a public-sector worker doing the very same job.

Where gender data is available — for 2011–12 — about 20 per cent of formal-sector workers and 30 per cent of informal-sector workers were women. Women therefore bear a disproportionate share of insecure work.

Box 6.2 — Informalisation in Ahmedabad

Since the late 1970s, many developing countries (including India) have started paying attention to enterprises and workers in the informal sector, because employment in the formal sector is not growing. Workers and enterprises in the informal sector face four chronic problems:

Of late, owing to the efforts of the International Labour Organisation (ILO), the Indian government has initiated the modernisation of informal sector enterprises and the provision of social security measures to informal sector workers — schemes like e-Shram registration, Pradhan Mantri Suraksha Bima, Atal Pension Yojana and PM-SYM are part of this push.