Employment in agriculture soars in Maharashtra

The total employment in Maharashtra has improved significantly since the pandemic. Over 3 million people gained employment in the state between September-December 2019 and September-December 2022.

The September-December 2019 period was when the 18th Wave and the September-December 2022 period was when the 27th Wave of the full panel of CMIE’s Consumer Pyramids Household Survey was administered. The former was the last pre-pandemic Wave and the latter is the latest post-pandemic Wave.

The increase in employment over this three-year period was driven mainly by the addition of labour in the agriculture and industry sectors, and not in services. In fact, around 57.6 per cent of the increase in total employment in Maharashtra was due to employment growth in the agricultural sector alone.

The workforce — comprising persons who are employed — expanded by 3.1 million in the past three years. As a result, total employment in Maharashtra in September-December 2022 reached 45.5 million. In comparison, there were 42.4 million employed people in the pre-pandemic period of September-December 2019.

While this increase in employment over three years in Maharashtra is a positive, it was not commensurate with the rate of increase in the working-age population in the state at the same time. As a result, Maharashtra's employment rate, which measures the proportion of the population that is employed, fell from 41.87 per cent to 41.84 per cent in this period.

The largest provider of employment in Maharashtra is the agricultural sector. In September-December 2019, there were 18.7 million people employed in agriculture, amounting to 44.15 per cent of the total workforce in the state. The second highest share of employment, at 36.4 per cent, was in the services sector. There were a little over 15.4 million people employed in services in Maharashtra in September-December 2019. Industry accounted for a much smaller share of 19.4 per cent, employing 8.2 million people.

The sectoral distribution of the workforce in Maharashtra in September-December 2022 indicates that agriculture continues to be the dominant source of employment. In fact, a large share of the increase in total employment between September-December 2019 and September-December 2022 comes from a jump in employment in the agricultural sector.

The total employment in Maharashtra increased by 3.1 million between September-December 2019 and September-December 2022. Close to 1.8 million of these jobs were added in agriculture and 1.34 million were added in industry in this period. As a result, the expansion of the workforce in agriculture accounted for a rather high 57.7 per cent of the increase in total employment in Maharashtra. Industry accounted for 43 per cent of the rise in total employment. In the services sector, on the other hand, there were 14,000 fewer people employed in September-December 2022 compared to three years ago.

The number of employed persons in agriculture rose from 18.7 million in September-December 2019 to 20.5 million in September-December 2022. This corresponds to a jump in employment in agriculture by close to 1.8 million. The share of agriculture in total employment in Maharashtra was 44.15 per cent in September-December 2019. It inched up to 45.07 per cent in September-December 2022 — a 0.92 percentage point increase.

The total workforce in industry expanded from 8.2 million in September-December 2019 to 9.57 million in September-December 2022. The respective shares in total employment were 19.43 per cent and 21.04 per cent. Therefore, in this period, the share of industry in total employment in Maharashtra increased by 1.61 percentage points.

Within industry, the largest increase in employment between September-December 2019 and September-December 2022 was witnessed in the manufacturing sector. Around 1.28 million people were added to the employed pool in manufacturing, resulting in a total of 5.38 million employed people in this sector. In real estate and construction, employment increased by a small margin of 0.23 million between September-December 2019 and September-December 2022. In this period, the share of real estate and construction in employment in industry declined from 45.3 per cent to 41.39 per cent.

Compared to pre-pandemic times, there is little change in employment in the services sector in Maharashtra. There were around 15.41 million people employed in services in September-December 2022. This is a marginal decline in employment compared to 15.42 million people employed in this sector in September-December 2019. However, the share of services in total employment dropped considerably from 36.4 per cent to 33.9 per cent in this period. This suggests that fewer numbers of people are finding jobs in the services sector in Maharashtra, leading to a shift in employment to other sectors.

The movement of employment away from services in Maharashtra is largely in favour of agriculture. The share of agriculture in total employment increased by close to 0.9 percentage points between September-December 2019 and September-December 2022, while that of industry inched up by 1.6 percentage points. In the same period, the share of services in employment crawled down by 2.5 percentage points. The large shift of labour in favour of agriculture is an indication of distress in other sectors of the labour market in Maharashtra. The services sector, and industry to quite an extent, is unable to absorb the labour force into skilled jobs, forcing people to move in large numbers into more precarious sectors like agriculture.