Agriculture sector, even today, attracts the maximum employment although its share in the GDP is a meagre 17%. In terms of share in GDP, India is a service-economy while in terms of employment generation, India is still stuck with the agrarian-economy status ever since its independence.
Did it ever occur to you that how can agriculture, despite its little contribution to GDP, attracts the maximum employment? Well if this question ponders your head often, let me clear all doubts.
The agriculture sector experiences a massive unemployment in two major forms, primarily:
- Seasonal Unemployment
- Disguised unemployment
Now, let’s discuss these concepts one by one to create clarity.
Seasonal unemployment occurs primarily in the agriculture sector and there are very instances of experiencing such forms of unemployment in the urban sector or in other sectors of the economy. It is a kind of unemployment when people are employed only for a few months or a particular season of the year and the individual remains unemployed during the remaining months of the year. Farmers often employ additional workers during the sowing season or the harvesting season and in the remaining time period that person is unemployed.
The next is disguised unemployment. This is a very interesting type of unemployment because as the name suggests, this unemployment is hidden or not seen easily. It is that form of unemployment wherein more people are employed as compared to the requirement level. Understand this with an example.
Suppose a farmer employs 5 people on his field whereas only 3 people were sufficient for that land. Hence, the additional 2 workers are not adding to the production process and so, these 2 additional workers would be considered disgusedly unemployed.
This is a very basic idea of the concept of disguised unemployment. Such forms may also be prevalent in urban sectors wherein more labour is employed say, in a factory, as compared to the number of people employed. Hence the marginal productivity of each additional labour falls and eventually becomes negative which no firm tends to be at.
So, firms must be very careful while employing more people!