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Non Farming Activities In India Essays Online

Dairy – It is a common activity in many villages. People feed their buffalos on various kinds of grass and the jowar and bajra that grows during rainy season. Then the milk is sold in nearby villages and towns. It is alos transported to far away towns and cities. A dairy is a business enterprise established for the harvesting of animal milk – mostly from cows or goats , but also from buffalo , sheep , horses or camels – for human consumption. A dairy is typically located on a dedicated dairy farm or section of a multi-purpose farm that is concerned with the harvesting of milk.kaloram

Shops – People involved in Trade(shopkeepers) buy various goods from wholesale markets in the cities and sell them in the village Some villagers sell rice, wheat, sugar, tea, oil, biscuits, soap, toothpaste, batteries, candles etc.. People whose houses are close to the bus stand use a part of the space to open small shops. Some sell eatables like pakoras, samosas etc..

Transport – Transport is another major activity of villages.People with rickshaws, tongas, tractors, truks, bogey and bullock carts are the ones in the transport service and they transport goods and services from one place to another and in return get paid for it.


Cottage Industry in Indian Villages
Another major occupation in Indian villages is the cottage industry. Cottage industry has emerged as a major source of employment in Indian villages over the period of time. Many villagers are occupied in various kinds of art and crafts works.

The villagers produce different types of handicrafts products and many of them are earning their livelihoods by marketing them. The occupations like artisan in wood, cloth, metal and leather have been in existence in Indian villages, since the ancient period and are found even in the modern times. Many Indian villagers are dependent on these occupations to earn their livelihoods.

The women in the rural areas, too are actively getting involved in different industries like matchbox and firework industries, Bidi making, agate and slate industries, coffee and tea industries, brick industry, construction industry, electronics industry, spice industries, etc. Among these, the Bidi, slate or brick making industries are the most well spread industries in Indian villages. Apart from these industries, the Indian villagers have also become sweepers and scavengers.

pottery :Pottery being an age old handicraft in India, the roots of the India pottery industry can be traced back to the earliest times of civilization. The beginning of pottery making trails back to the Neolithic era. During the time of the Indus Valley Civilization, this effective art form improved with technology.

In the present day, the pottery industry in India has been put forward as a major cottage industry as well as on the contemporary lines in both small and big pottery concerns.India along with several other developing countries of Asia is considered as one of the first Asian countries to manufacture as well as export products of pottery. The pottery industry in India provides mass employment along with betterment of the living standards; both the village and city people comprise the work force of the industry. .

tie and die:Tie-dye is a process of tying and dyeing a piece of fabric or cloth which is made from knit or woven fabric, usually cotton; typically using bright colorsDifferent forms of tie and dye have been practiced in India.Bandhani also known as Bandhej is a type of tie-dye practiced mainly in the states of Rajasthan and Gujarat, India Bandhej in Rajasthan is a traditional form of tie and dye which began about 5000 years ago. It is the oldest tie and dye tradition still in practice.

Large scale industry: Large scale industries refers to those industries which require huge infrastructure, man power and a have influx of capital assets. The term ‘large scale industries ‘ is a generic one including various types of industries in its purview. it thus provides job many villagers Indian economy is heavily dependent on these large industries for its economic growth, generation of foreign currency and for providing job opportunities to millions of Indiansjaintia factories of rajgarh chips and namkeen

.carpentery=the carpenter is one of the five useful articians of the villages Carpentry is a skilled trade in which the primary work performed is the use of wood to construct items as large as buildings and as small as desk drawers.





Non-Farm Occupation in Rural India



A. K. Mukhopadhyay,

D. Gangopadhyay & Saswati Nayak


Rural non-farm economy, in recent times, is considered as an effectual strategy for decentralization of economic activities to rural India. The Economic Census of India estimates that around 41.89 million rural people are employed in non-agricultural establishments which registered a growth rate of 4.56 % during 1998-2005. However, the sector has been contending with a number of factors like inadequate rural infrastructure, particularly roads, electricity and communication facilities, lack of sufficient skilled labour and adequate access to credit, information and training facilities etc. The present study investigates the strengths and weaknesses of the rural-non-farm-sector of India analyzing the structure and growth of rural-non-farm-sector and its’ trends towards employment and income generation to arrive at certain inferences like formulation of possible approaches with a view to promote rural-non-farm-sector self-sustaining in the changing competitive environment.



Farm activity means agricultural activity and non-farm activity is used synonymously with non-agricultural activity. There are two alternative approaches to define rural-non-farm activities (Saith, 1992). The first is the locative approach in which the primary criterion is that a RNF activity is performed in a location which falls within a designated rural area. The second is based on the linkage approach where an industrial enterprise generates significant development linkages with the rural areas. For purposes of this study we are using the first. Rural-Non-Farm-Sector (RNFS) includes all economic activities viz., household and non-household manufacturing, handicrafts, processing, repairs, construction, mining and quarrying, transport, trade, communication, community and personal services etc. in rural areas. Rural-Non-Farm-Activities (RNFAs), thus, play an important role to provide supplementary employment to small and marginal farm households, reduce income inequalities and rural-urban migration. Though, agricultural sector has played a very significant role for generation of rural employment in the Asia and Pacific region, its contribution to the overall economy has greatly reduced in the recent past (Asian Productivity Organization, 2004). Therefore, development of various non-farm-activities can effectively be exploited as a potent stimulator for further economic growth offering rural communities better employment prospects on a sustainable basis.


Importance of Rural Non-Farm Sector

The non-farm sector, particularly in rural areas is being accorded wide recognition in recent years for the following reasons: 

  • Employment growth in the farm sector has not been in consonance with employment growth in general.
  • A planned strategy of rural non-farm development may prevent many rural people from migrating to urban industrial and commercial centers.
  • When the economic base of the rural economy extends beyond agriculture, rural-urban economic gaps are bound to get narrower along with salutary effects in many other aspects associated with the life and aspirations of the people.
  • Rural industries are generally less capital-intensive and more labour absorbing.
  • Rural industrialization has significant spin-offs for agricultural development as well.
  • Rural income distribution is much less unequal in areas where a wide network of non-farm avenues of employment exists; the lower strata of rural societies participate much more intensely in non-farm activities, though their involvement is much less remunerative as compared with that of the upper strata.


Structure and growth of Rural-Non-Farm-Sector

The RNFS in India is too diverse in respect of activities, unit size and geographic dispersal. Further, it does not consist of a homogenous set of activities in terms of income and productivity levels. The RNFS is classified into three major sub-sectors (Saxena, 2004). The first sub-sector consists of enterprises that are run on more or less stable basis with target on the surplus generation and growth, employing labour with certain degree of technical sophistication. The second sub-sector consists of products or activities, which are often seasonal, run solely with the help of unpaid family labour, using primitive technology and catering mostly to the local market. These two sub-sectors can be differentiated in terms of capital use rather than product categories. The third sub-sector consists of paid workers characterized by low earnings and a disintegrated market with respect to labour supply. As per the Economic Census 2005, the total non-agricultural establishments accounted for about 17.855 million in the country, whereas 19.83 million were situated in rural areas. Out of 19.83 million non-agricultural establishments located in the rural area, 13.26 million (66.89 %) were own-account establishments and remaining 6.56 million (33.11 %) were establishments with hired workers (Table 1). Non-agricultural and agricultural establishments registered a growth rate of 4.56 and 8.62 % respectively during 1998-2005 (Figure 1). The data suggests that with the major share of non-agricultural activities, the growing rural labour force can successfully be absorbed as RFNS workers generating supplementary income for better economic growth of the rural community. Retail trade (39.28 %) was the dominant activity followed by manufacturing (26.02 %) and other community, social and personal service (8.15 %) of the non-farm establishments. Sector-wise distribution of different rural non-farm sectors in rural India has been depicted in Figure 2.  


Table 1: Non-agricultural establishments and employment in rural India in 1998 and 2005

Note: Figures are in absolute number. Figures in single and double brackets indicate average number of persons per establishment and percentage of female / hired worker to total employment respectively.

Source:Economic Census All-India Report (2005), Govt. of India, Ministry of Statistics and Programme Implementation.



Fig 1: Distribution of enterprises in rural India during 1998 and 2005

Source: Economic Census All-India Report (1998; 2005), Govt. of India, Ministry of Statistics and Programme Implementation.




Fig 2: Distribution of major Non-agricultural establishments in rural India during 2005

Source:Economic Census All-India Report (2005), Govt. of India, Ministry of Statistics and Programme Implementation.



Trends of non-farm employment and income

Rural non-farm economy in recent times is being considered an effectual strategy for decentralization of economic activities to rural India and giving a halt to the migration of people to urban centres. Around 41.89 million persons worked in rural non-agricultural establishments of rural areas which constitute 46.55 % of the total employment in non-agricultural sectors including both rural and urban areas. Of these, 17.30 million persons (41.30 %) were employed in own account establishments and the remaining 24.59 million (58.70 %) in establishments with hired workers. Female workers (nearly 10 million) constituted 21.96 % of total employment in rural non-farm sectors and proportion of female employment was found comparatively higher (24.32 %) in establishments which hire workers than own-account establishments (18.59 %). There were 1.03 million child workers, which constituted 2.45 % of total employment in non-agricultural establishments in rural areas and the proportion was more in establishments with hired workers (2.85 %) than in own account establishments (1.89 %) (Table 1). Retail trade, manufacturing and other community, social and personal service activities were the three most important activity groups which attracted the largest number of own account establishments. However, the percentage of other categories including social and personal service activities was much less compared to that of retail trade and manufacturing. Employment in retail trade (7.5 million) constituted 43.12 % of the total employment in the own account establishments in the rural area followed by manufacturing engaging 5.4 million workers (31.01 %) and other community including social and personal service activities 1.3 million workers (7.67 %). Percentage of share of employment was found negative in the sectors like mining and quarrying, electricity, gas and water supply, financial intermediation and other activities. The trend of percentage share follows the same pattern as that of establishments with hired workers. The non-agriculture-sectors where employment growth during the 90’s was positive and higher were manufacturing, construction, trade, transport, and business services whereas negative in mining and quarrying, utilities and community services.

Various studies have estimated that the earnings of regular workers in the RNFS were 2.4 times higher than that of agricultural workers. Casual labourers earn higher wages in non-agricultural activities than in agriculture. For male labourers wages are 40 % higher. For female the difference is just over 20 %. According to National Sample Survey, only 10 % of male rural workers and 5 % of female workers were regularly employed. A trend of a shift from self-employed in agriculture to higher paid casual work in non-agricultural activities has also been pointed out by some independent studies.

Non-farm employment can broadly be classified into three categories:  regular employment, self-employment and casual employment. A trend in employment status of rural labour in India is presented in Figure 3. 27 million people were employed in organized sector in 2003. The Employment in this sector has been decreasing since 1998 when it was 28.1 million. Estimates suggest that 92% of Indian labourers are engaged in the unorganised sector while organised segment constitutes the remaining 8%. Further, it can be noted that 95% of female workers and 89 % of male labourers are engaged in the unorganised segment in India. The informal nature of farm and non-farm activities in rural areas drives this trend of overwhelming presence of unorganised sector in India. Though, the informal nature of farm activities in rural areas has been documented to some extent, non-agricultural activities appear to be extremely unorganised in India. Distribution of workers in organized and unorganized sectors has been depicted in Figure 4.


Fig 3: Trends in employment status in rural labour force (male + female) by sector

Source: NSS Report No. 522 (62/10/01) Employment and unemployment situation in India, July, 2005 - June, 2006




Fig 4: Distribution of rural workforce by type of employment and sector

Source: Estimates by NCEUS



Labour force growth and employment requirements

To provide employment for additional labour force which is estimated to grow at the rate of 2.51 % per annum during the Tenth Plan period (2002-2007), besides reducing the backlog of unemployment accumulated from the past, is a daunting challenge for India. Despite an expected reduction in the growth rate of population to 1.63 % per annum by 2002 - 2007, the labour force growth reached 2.51 % per annum. This is attributed to change in the age structure of the population and an increase in the population in the most active working age group of 15-59 (Table 2 and 3). Growth or decline in the labour force participation rates (LFPRs) depends on certain factors. With the increasing thrust on education, LFPRs in the age group 15-19 years will decline. On the other hand, with improved health and longevity, LFPRs in the older age groups, particularly 50+ years, will increase by 7.9 – 8.9 % during the Eleventh Plan period (Table 2). The labour force projected to increase by 40.02 million in special group and 55.82 million in working age group (15+) during the period of 2007-12 implies the need for an increase in the pace of creation of additional work opportunities commensurate with the growth of labour force (Table 4).


Table 2: Age structure of population

Age group




















All age groups










Note: age distribution in per cent, population in million

Source: Planning Commission, Govt. of India, Tenth five year plan 2002-07



Table 3: Growth in population and labour force projection by age group    

Population / labour force




Population (all age groups)




Population (15 - 59 years)




Labour force (15 – 59)




Population (15+)




Labour force (15+)




Note:  1) Data for respective years are per cent per annum2)Labour force projections here are on the basis of labour force participation rate for each quinquennial age group remaining unchanged, i.e. the changes in labour force growth in relation to population are due to changes in the age composition of the population.

Source: Planning Commission, Govt. of India, Tenth five year plan 2002-07



Table 4: Increase in labour force and working age population

Basis of scenario



Increase in labour force  (Specific group)



Increase in working age population (15+)



Note: Data for respective five-year blocksin million

Source: Report of Planning Commission Special Group on creation of 10 million employment opportunities, per year since 2002.


Unemployment is estimated at 21.15 million, 5.11 % of the total population (Table 5). To achieve full employment by 2011-12, it is estimated that employment should grow at 2.7 % per annum based on the proposed policy and programmes in the Tenth Plan. This would require GDP to grow at 8 % per annum. It is observed that the proportion of person-days of the usually employed, utilized for work, is lower for females as compared to the males throughout the period 1987-88 to 1999-2000. During 1999-2000, this proportion was estimated at about 68 per cent for females as against 90 per cent for males in rural India. The distribution obtained from the 1999-2000 survey is presented in Table 6. Distribution of male and female work force in non-farm activity in rural areas during 1983 – 2005 has been depicted in Fig. 5.  


Table 5:  Labour force, employment and unemployment






% per annum

Labour force


















Unemployed rate (%)






Note: 1) Data for respective years in million   2) Special group estimates on CDS basis

Source: Planning commission, Govt. of India, Tenth five year plan 2002-07



Table 6:  Distribution of male/female per 1000 person-days usually employed in rural India

Current daily
























Not in labour force














Source: NSSO, India



Fig 5: Distribution of rural workforce in non-farm-activities

Source: NSS Report No. 522 (62/10/01) Employment and Unempolyment situation in India, July, 2005 - June, 2006



Quality of employment

Nearly 51.3 % of the workforce is either illiterate or educated below the primary level (Table 7). Even in industries where skill up-gradation for raising productivity requires a reasonable level of educational standard, 39.6 and 74. 0 % of the workforce consisting of male and female respectively was illiterate. The pattern of development of the Indian economy requires skill and education levels not immediately available thereby leading to a mismatch between the demand and supply of labour services – an increasing level of unemployment in one segment of the labour market coupled with a labour shortage in the other.



Table 7:  Distribution of workers in the rural area by the level of education (%), 1999-2000

Rural area

Level of general education

Share in workforce


Up to Primary

Secondary and above




















Source: This section draws upon the Report of the Task Force on Employment Opportunities, Planning Commission, Govt. of India (2001)


The quality of employment also relates to wages and security of the worker. Wages paid/received depend on the productivity and education of the worker. The more skilled and educated the higher the wage. A full-time worker, illiterate and unskilled, may not earn adequate income. There is high incidence of this kind of underemployment.

Surveys reveal a substantial increase of illiterates among the unemployed persons (Table 8). Over the period of 1993-2005, the proportion of those with educational level up to primary among the unemployed increased from 1.9 - 3.0 % and 2.6 - 3.1 % in case of male and female respectively while unemployed decreased from 8.3 to 6.5 % among the secondary school or higher educational level and increased from 9.8 to 18.2 % in case of female. It shows not only a lack of sufficient efforts and resources to educate the workforce, but also a mismatch between the kind of job opportunities that are needed and those that are available in the job market. The situation also indicates the need for more jobs requiring skilled labour rather than the simple low productive manual labour.


Table 8:   Education profile of the unemployed in India (%)





Up to Primary

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