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Informist, Thursday, Jul 18, 2024

 

--RBI paper: Labour quality growth fastest in capital-intensive mfg

 

MUMBAI – Growth in labour quality was the fastest in capital-intensive manufacturing such as chemicals, machinery, transport equipment, and health and social work in the services sector, the Reserve Bank of India's staff said in a paper today.

 

It also said that the workforce distribution across education categories showed an increase in education levels for all workers, especially in India's capital-intensive manufacturing and service sectors. "There has been a shift in employment from agriculture to construction and services with increased workforce regularisation in the manufacturing sector," the paper said.

 

The paper, titled 'Measuring the Contribution of Labour Composition in Gross Value Added in India – The Human Capital Approach', was published in the RBI Bulletin for July and does not necessarily reflect the views of the central bank. The article examines the composition of labour, including labour quality, and their contribution to gross value-added growth in India from 1980-81 to 2021-22.

 

The paper said that the growth accounting exercise in KLEMS (Capital, Labour, Energy, Materials and Services) framework shows that employment contributed around 25% to output growth, with labour quality contributing an additional 5% to output growth on average during 1980-81 to 2021-22. Thus, labour input (combined employment and quality) accounted for 30% of overall output growth during that period.

 

The paper suggested that for India, efforts could be made to consider statistics on job and vacancy postings from establishment-based or enterprise-level surveys. It also suggested that going forward, the labour data for India, which is derived from KLEMS framework, can be considered for integrating with the national accounts statistics data.

 

"An integration with KLEMS accounts could facilitate the segregation of mixed income between earnings of capital and earnings of self-employed, regular and casual workers in the national accounts," the paper said.  End

 

Reported by Kshipra Petkar

Edited by Saji George Titus

 

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