The Hindu Business Line : Labour force may rise 32 pc by 2011

A VAST majority of Indians graduate out of parental support by the time they are about 16 years old. They may not at that tender age be forced to stand on their own feet. But they have to at least begin contributing to the family income, or get enrolled, through marriage, on someone else's `payroll'. The potential labour force can thus be said to comprise those between 15 and 64. Retirement ages in the organised sector have little relevance for most of the Indian population.

A quick calculation based on data generated by the 2001 Census reveals that there were about 613 million people in the 15-64 age group in 2001. 253 million people would get added to this group by 2011, while 55 million would graduate out of it. Thus, the 15-64 age group would have 32 per cent more people (811 million) in it by 2011.

It is hard to work out what this means in terms of the rate at which each percentage point of GDP growth would have to add to the number of available work opportunities. This is because the vast majority of new entrants are in the rural sector, for which the overall rate of growth of GDP has less relevance than the growth of off-farm employment and the growth of income transfer programmes in the public domain.

Further, a large chunk of the increased work age groups, in both rural and urban areas, would be women, on whose dependence on independent sources of income there is little data. But the accompanying table will provide a picture of the broad contours of the problem at our doorstep.

It is clear from the table that there will be 37 per cent more rural males in the 15-64 age group in 2011 as compared to 2001. Urban males in this age group in 2011 will outnumber those in 2001 by 25.3 million, a rise of 25 per cent. The problem of potential unemployment or underemployment is, therefore, likely to be more acute in rural areas, for which the overall rate of growth of GDP is a relatively remote consideration.

It, however, needs to be borne in mind that average urban consumption is only 75 per cent more than average rural consumption. Therefore, there is no need to get unduly disheartened by statements that rural areas account for 72 per cent of the population, but agriculture accounts for only 21 per cent of GDP. The income gap between rural and urban areas is much smaller than suggested by this statement. There is a non-negligible amount of off-farm employment in rural areas, which helps take up the slack in conjunction with Government-sponsored income support programmes.

The problem of old age support in the years to come is all too often dismissed very lightly on the ground that there will be a larger working age population to take care of the aged. However, old age security is not automatically ensured by this. The Government will have to make the required income transfer come about, particularly because of the dwindling of family-based old age security mechanisms. After all, the baby boom did not come about as a result of mothers having more babies, but rather as a result of more mothers having (a fewer number of) babies.

So the elderly will have an ever-smaller base of family-based support mechanisms to rely on in the years to come. This gives an additional importance to the need for old age security mechanisms in the public sector.

At the all-India level, even if one assumes that all those in the 75+ age groups pass on and as those aged 55-64 graduate into the 65+ category in 2011, the number of 65+ persons will be 82.6 per cent higher in 2011 than it was in 2001.

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