Studies on Non-Farm Employment in India - National Perspectives

By Biswajit Choudhury

Introduction

Non-farm employment (NFE) has emerged as a critical component of rural livelihoods in India, contributing significantly to poverty reduction and rural economic diversification. This review discusses the evolution of non-farm employment in India, its importance in the rural economy, and its future potential. National perspectives on NFE focus on understanding the growth drivers, challenges, and impact on rural households.

Importance of Non-Farm Employment in India

Non-farm employment constitutes around 40% of rural employment in India. As per the National Sample Survey (NSS) 68th round (2011-12), the share of the rural workforce engaged in non-farm activities increased significantly from 32% in 1999-2000 to 39.7% in 2011-12.

Key sectors include manufacturing, construction, trade, transport, and services. According to the NITI Aayog, rural non-farm sectors have been instrumental in absorbing labor displaced from agriculture due to low farm incomes, rapid mechanization, and seasonal unemployment.

Key Drivers of Non-Farm Employment

• Infrastructure Development: Improved road networks, electricity, and telecommunication have opened up non-farm employment opportunities in rural areas.
• Skill Development: Government programs such as Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) aim to enhance the skills of rural youth for better employability.
• Microfinance and SHGs: Self-help groups (SHGs) and microfinance institutions have empowered women and rural entrepreneurs to start small-scale non-farm enterprises.

Case Studies & Examples

Bihar: In Bihar, small-scale agro-processing units and the construction sector have seen rapid growth. Studies show that over 60% of non-farm jobs in Bihar come from these sectors, offering higher wages compared to agricultural jobs.

Tamil Nadu: Handloom weaving and small-scale manufacturing have provided significant non-farm employment in the state's rural regions. Many women have been empowered through self-employment initiatives.

Challenges in Rural Non-Farm Employment

Despite its potential, non-farm employment in India faces several challenges:

• Lack of Formalization: Most rural non-farm jobs are in the informal sector, leading to low wages and poor working conditions.
• Limited Access to Finance: Rural entrepreneurs face challenges in accessing affordable finance for scaling their non-farm enterprises.
• Skill Mismatch: The available non-farm jobs often do not match the skills of the rural workforce, leading to underemployment.

Useful Books & References

• Rural Non-Farm Employment: Issues and Implications for Farm Sector by Vijay Shankar Vyas - Buy on Amazon
• Rural Employment Generation Programme in India by K. A. Raju - Buy on Amazon
• NITI Aayog - Rural Development Policy
• Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY)
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY)

Conclusion

Non-farm employment in rural India is a crucial pillar for economic diversification and poverty alleviation. With continued investments in infrastructure, skill development, and access to finance, the sector can play a transformative role in rural development. For policymakers, it is essential to address the challenges of informal employment and ensure that non-farm jobs offer sustainable livelihoods.

For more insights on non-farm employment opportunities in India, visit Promoting Sustainable Rural Non-Farm Employment Opportunities.

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