GROWTH AND OCCUPATIONAL STRUCTURE
By Occupational structure we mean the distribution of work force in different occupations. In an
industrialising economy, going by the vast empirical work of Simon Kuznets, we may expect the following
type of structural changes: The percentage of the population dependent on agriculture should decline over
time in the long run. The obverse is an increase in non-agricultural employment over the same period. 23
The percentage of the population dependent on industry – manufacturing – should increase over this period.
The increase in manufacturing employment should absorb at least a major part of the population released
from agriculture. Within manufacturing, we may expect a shift from household activities to nonhousehold
activities as the latter may be expected to be larger, and to use better technology. There may be an increase
in the percentage of population dependent on services. But, for a country in the early stages of
industrialisation, this increase should be less than the increase in manufacturing. At a later stage of
development, faster increase in the services sector may be expected. The reasons for such a change are two-
fold: With rise in incomes, the demand for agricultural goods does not rise proportionately. On the other
hand, rise in incomes brings about a large increase in demand for industrial goods and services, resulting in
increasing demand for labour in the manufacturing and services sector. With economic development more
capital and better techniques become available with agriculture, so that the productivity of land and labour
goes up fast. As a result, there is less need for labour in agriculture. On the contrary, in the industrial sector,
although increase in capital and modern techniques makes it possible to bring about large increase in
production per head, demand increases at a faster rate than the rise in per head productivity resulting in
increasing demand for labour in the industrial and the services sectors. 1.8.1 Occupational Structure in India
Table 1.2 below presents data relating to India’s occupational structure since the beginning of the twentieth
century.
Table 1.2:
Occupational distribution of working population.
(Percentage) Sector 1901 1921 1951 1971 1981 1991 99-00 04-05 09-10
Primary 71.7 76.0 72.1 72.1 68.7 65.0 60.4 58.4 53.5
Secondary 12.6 10.5 10.7 11.2 13.5 15.0 15.8 18.2 20.9
Tertiary 15.7 13.5 17.2 16.7 17.8 20.0 23.8 23.4 25.
6 Source: Census of India and NSSO Extrapolating on the basis of the Census and the NSSO data 2009-10, a
recent study estimates that the share of agriculture sector in total work force may fall to less than 50 per cent
in another decade. The following observations can be made from this table: 1) The occupational structure of
the Indian economy is lopsided. There is a heavy dependence on agriculture, about one-half of the working
population derives its subsistence from agriculture, non-agriculture sector absorbing less than one half of the
total working population. Growth and Structure of Indian Economy Indian Economic Development: An
Overview 24 2) The whole period beginning with 1901 can be divided in two sub-periods. During the first
sub-period, lasting till as late as 1971, the occupational structure of India did not change a bit. The second
sub-period covers the period since 1971. Over the last four decades, some definite changes as evidenced on
the celebrated Kuznets-Clark-Kaldorian path and as already experienced in other developed countries, have
taken place. Alongwith the changes noticed in the aggregate, a few other important changes in the economy
need also be noted. 1) Some significant developments in certain segments of the economy can be seen. For
example, the number of workers in modern industries is on the increase. The country is producing new
products and using new and modern techniques. Furthermore, there is an impressive expansion of job
opportunities in services like education, health, science, railways, communications, etc. These changes are
indicative that the proceed of modernisation of the economy is under way. But the pace of modernisation is
so slow that it does not leave a significant mark on the occupational structure. 2) The share of cultivators has
come down while that of agricultural labourers has gone up. For the period 1901 to 1961, cultivators
accounted for about 53 per cent of the total work force, while agricultural labourers hovered between 14 and
17 per cent. There has been a drastic change in this pattern since then. The share of cultivators came down to
29.7 per cent in 2004-05, while that of agricultural labourers has increased to 19.8 per cent in 1991. Such
change is indicative of a major institutional shift in the economy. The movement is away from workers
depending substantially on their own resources for making a living towards workers depending, or being
obliged to depend, on other people to utilise their labout power. 3) The occupational structure in some of the
States has undergone a marked change. The all-India trends, however, conceal the different types of changes
taking place in the industrial distribution of workers in different States. In Kerala, Tamil Nadu, Maharashtra
and Bengal, the proportion of working population engaged in agriculture has declined and that engaged in
industries and services has gone up. In Rajasthan and Orissa, however, there has been an opposite
development, the proportion in agriculture having increased and that in industries and services having
decreased. About other States no definite trend has emerged. 4) The level of per capita incomes of different
States too seems to tell a familiar story about the occupational structure. In States where the per capita
income is about the same as the all-India level (e.g., Punjab, Kerala, Maharashtra, Gujrat, Tamil Nadu), the
share of agriculture in the working population is low and that of industries and services high. On the other
hand, in States where the per capita income is less than all-India level (e.g., Madhya Pradesh, Bihar, U.P.,
Rajasthan), the share of agriculture in the working population is high and that of non-agricultural sector low.
In short, although the overall picture does not show any change, yet some perceptible changes in the
occupational structure in some regions of the country have been marked. 5) The composition of the NDP has
shown a marked change since 1950-51. There has been a marked fall in the share of the primary sector in the
NDP, whereas the share of the secondary and the tertiary sectors has increased. The share of the tertiary
sector has increased at a faster rate than that of the secondary sector. These trends are indicative of the
structural changes being 25 experienced by the Indian economy. But these trends are not brought out by the
data relating to the occupational structure of the economy
