Jobs Shifting From Informal To Formal Sector: Chief Economic Advisor

New Delhi, December 13: Even as the government has been facing criticism on rising unemployment in the country, Chief Economic Advisor Krishnamurthy Subramanian on Friday said that there has been a change in the nature of work over the last several years with more and more jobs getting formalised. 

Giving a comparison of change in the status of employment between 2011-12 and 2017-18, he said several measures taken to formalise the economy had paid dividends resulting in a significant shift from casual non-salaried jobs to salaried jobs.

“If one looks at the distribution of employees, percentage of casual workers has gone down by five per cent (from 30 per cent of the workforce to 25 per cent). On the other hand, the percentage of salaried employees has gone up by the same five per cent (from 18 per cent to 23 per cent during this period),” Subramanian said.

He added that this translated to 2.3 crore jobs shifting from informal to the formal sector.

“In rural areas, there has been a shift from casual workers to salaried jobs and self-employed while in urban cities, shift is from self-employment to salaried jobs. And among self-employed, the shift is from unpaid family work to own account work,” he said.

When it comes to proportion of workers in agriculture, the Chief Economic Advisor added that the proportion of workers has gone down by 5 per cent with services sector gaining four per cent in the workforce pie and industry gaining one per cent. “This shift is mainly driven by rural workers,” he added. 

“Collectively, all this data clearly suggests a change in nature of work from informal to formal,” Subramanian said adding that the organised sector has increased by two per cent during this period with a corresponding decline in the unorganised sector. 

According to the data shared by him, the organised sector comprised 17 per cent of the workforce in FY12 which increased to 19 per cent in FY18 while unorganised sector declined from 83 per cent to 81 per cent.

“And within the organised sector, jobs are shifting towards formal work,” he said.

The government had been facing severe criticism from several quarters for rising unemployment rate in the country. However, last month, a survey by the National Statistical Office (NSO) showed that the trend was reversing and that urban unemployment rate dropped to the lowest level in four quarters at 9.3 per cent during January-March 2019.