Employment Intensity of Food Products and Processing Industry in India

Abstract

Indian food products and processing industry has seen significant growth and changes over the past few years, driven by changing trends in markets, changing demographics, growing population and rapid urbanisation. It is one of the labour intensive industries having the potential to provide massive skilled as well as unskilled employment to the growing Indian labour-force. The objective of this study is to investigate the employment elasticity of food products and processing industry in India at aggregate as well as disaggregate levels using Annual Survey of Industry data. Further, performance of food products and processing industry is also compared with the total organised manufacturing sector. The findings suggest a decline in the level of employment and output of food products and processing industry in India over the period 1999-2015. The decline may be due to fall in the share of major four sub-industries namely sugar, grain mill products, vegetable and animal oils and fats, and other food products. Any fluctuation in the growth of these industries would affect the overall growth of food products and processing industry. The resultant employment elasticity also declined over the period from 0.17 in 1999-2007 to 0.15 in 2008-2015. Significant difference is also seen in the value of employment elasticity at sub-industries level in the food products and processing industry over the period. However, food products industry is having the capability to drive the Indian economy towards higher growth because of strong comparative advantage over other nations and other sectors, with attention to investment, and generation of skilled man-power