How many Indians are landless?
India’s industrial history doesn’t inspire confidence to generate enough factory jobs for the displaced
Amid the debate on the new land acquisition law, fixing a number on India’s landless people seems to have become a matter of conjecture and educated guess.
Last week, finance minister Arun Jaitley said 300 million people do not own land, while launching the government’s Mudra refinancing scheme for micro enterprises. His office didn’t reply to queries on the source of the number despite repeated calls and emails.
“The current estimate for India’s landless is around 100 million households, which would constitute at least 300 million of our population,” Bharatiya Janata Party (BJP) spokesman M.J. Akbar wrote in his column in the Times of India on 5 April.
The draft national land reforms policy released in July 2013 said 31% of all households are landless. That number is derived from a 2003-04 survey of the National Sample Survey Office (NSSO), but the definition of landless is unclear.
The NSSO survey estimated that half of all urban households were landless; the ratio was one in 10 in rural areas. According to NSSO, landlessness is defined as possessing land below 0.002 hectares, or 215 sq. ft. Assuming an average household size of five, the total landless population works out to be 200 million.
However, NSSO’s official estimates referred to households that didn’t own any land at all, including homesteads. A 2008 paper by Vikas Rawal of the Centre for Economic Studies and Planning, Jawaharlal Nehru University, parsed unit-level NSSO data to look at the number of households that didn’t own any land other than homesteads. His logic was that it’s not enough to own a home in rural India. According to Rawal’s definition of landlessness, 41.63% of rural households were landless. That works out to 61.5 million households and 307 million people in rural India alone.
That’s as close as one can get to Jaitley’s estimates and is based on data a decade old. Add the urban landless and the overall number balloons to 442 million.
More recent data is available from the 2013 NSSO survey. This time, it surveyed only rural areas and showed that the proportion of landless households decreased to 7.4%, or 11 million households and 57.7 million people.
Where will they be employed?
In his speech, Jaitley said the landless will get employment in India’s industrial corridors after modifications in the land acquisition law.
“I want to make a special mention of poor, dalits, tribals, backwards, those who are landless,” said Jaitley. “The land acquisition bill we are bringing, as per that, the industrial corridors which would be set up in the country, those backward people, the 300 million landless people would get employment opportunities.”
It looks like a tall order. It will take nothing short of a miracle to generate 300 million factory jobs in the proposed industrial corridors, going by India’s recent industrial history.
The country’s total workforce in 2012 was 473 million, about half of whom were employed in agriculture.
A Reserve Bank of India study shows that the industry’s share in employment increased by only 1.7 percentage points between 1999-2000 and 2011-12. There were roughly 64 million industrial workers in 2011-12, who accounted for 13.6% of the workforce.
It is important to note that the land law enacted by the previous United Progressive Alliance government did not exist during this period, which discounts the possibility of acquisition being an impediment to industrialization and employment generation.
Land acquisition is not the only hurdle to industrialization. Even in cases where acquisition takes place, employment generation is not heartening.
A Comptroller and Auditor General of India performance audit done in 2014 showed that special economic zones (SEZs), which involve large-scale land acquisition, have failed to achieve 66-97% of their employment projections.
Employment generation is an outcome of the overall economic policy direction of the government.
Job numbers are unlikely to change drastically just because of changes in land acquisition rules.
India’s employment elasticity —additional employment generation per unit increase in output —has declined sharply since the 1990s.
The employment elasticity of the manufacturing sector is among the lowest.
Unless there is a shift away from capital-intensive industrialization and steps are taken to address the low employment elasticity of output, especially in manufacturing, it will not be possible to deliver on promises of drastically increasing employment, said Atul Sood, associate professor of economics at Jawaharlal Nehru University.
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