Employment and Poverty in India: 2000-2005

This paper is principally focused on the changes in the size and structure of work force and the changes in labour productivity, wages and poverty in India in the first quinquennuim of the 21st century. The period between 2000 and 2005 saw a sharp acceleration in work force growth, and, on the obverse side, a slow-down in the rate of growth of labour productivity across most sectors and in the economy as a whole, and, a slow-down (a decline) in real wage growth in rural (urban) India. On a comparable basis, the reduction in poverty over this period is shown to be substantially smaller than indicated by other recent analyses. Consistent with the trends in labour productivity and real wages, relative to the 1994-2000 period, the pace of poverty reduction between 2000 and 2005 shows, at best, a marginal acceleration (or a marginal deceleration, depending on the choice of poverty lines) in rural India and a clear slow-down in urban India. This period also saw a small rise in the number of working poor and a substantial rise in the number of self-employed and regular wage/salary workers in ‘above poverty line’ or APL-households. [CDE WP 155]