Changing structure of economy and employment in Manipur

Reimeingam Marchang *

Job for all or unemployment allowance' - A rally at Imphal in July 2012 :: Pix - Banti Phurailatpam

The economy of Manipur has fluctuated as the real income i.e net state value added (at 2011/12 prices), given by National Statistical Office, was almost consistently increasing from Rs 11316 crore in 2011/12 to Rs 16275 crore in 2017/18 but thereafter it has declined by 3.3% to Rs 15732 crore in 2021/22.

The decline in income is of immense concern, which calls forth for the pursuit for higher and accelerated economic growth by reckoning on the State’s intervention, market interactions and peoples’ active economic participation.

The decline of the economy, during 2017/18-2021/22, is primarily driven by the substantial decline of income from agriculture sector by 8.5% from Rs 4007 to Rs 3668 and industry by 55.3% from Rs 883 crore to Rs 395 crore.

Agriculture income may be improved through expansion of farm production using modem technology. Farm productions may be used as industrial inputs that may further stimulate industrial growth in terms of employment and income. While income from services has slightly improved by 2.5% from Rs 11385 crore to Rs 11670 crore during the same period.

To escalate the growth of these sectors, the system and structure of institutions need a furtherance. For instance, financial system and services must be strengthened as it determines the performance of the non-financial developments such as industrial development or entrepreneurship.

Concurrently, during the same period when income has declined, the economic structure has undergone a changed as agriculture and industrial income contribution in the total income has slid while service income has marginally surged.

Income contribution from agriculture has dwindled from 24.6% to 23.3%. This is not because of the decline in agricultural employment; but because of low labour productivity reflecting in the fall in agricultural income.

While income contribution by industry remains abysmally low at 2.5% in 2021/22 that have declined from 5.4% in 2017/18 indicating the persisting low level of industrialisation in the State which needs the Government intervention to promote, financially support and establish to foster industries thereby to generate adequate employment opportunities for the growing educated unemployed.

Manipur needs to adequately propose and open-up for investment on industrial development not only from the Government of India but largely from the World Bank, Asian Development Bank, Foreign Direct Investment, and multinational companies among others that can create numerous job opportunities by providing safe and secured business environment.

It may also escalate for establishing additional special economic zones in high value production and service economic activities with the sincere support from GoI. The economy is increasingly driven by the service sector as 74.2% of the State’s income is contributed by the service sector in 2021/22 which has increased from 70.0% in 2017/18.

Meanwhile, employment, like the economy, continues to be predominated by the service sector at a declining rate. In terms of employment, according to usual status (principal status and subsidiary status or PS+SS) as per the PLFS, the contribution of agriculture sector was 36.4% in 2017/18 that has marginally declined to 36.1% in 2021/22.

Evidently, contribution of agricultural employment is notably higher than agriculture income contribution signifying low labour productivity and low pricing of agricultural product. Similarly, 12.7% of the total employment were engaged in the industry, which was five-fold higher than the industrial income contribution in the whole economy of the State, in 2021/22 that has marginally improved from 12.3% in 2017/18.

It also shows a low industrial productivity that needs a prompt introspection and intervention for raising industrial productivity and income. Interestingly, only 51.2% of total work force of Manipur was in service sector in 2021/22, which remains almost unchanged from 2017/18 at 51.3%, against the significant contribution of income from this sector with close to three quarters of the entire State’s income.

It portrays that its labour productivity is the highest among all the sectors inevitably due to the higher labour capability and skills.

Thus, income of the State has declined primarily due to the under performance of agriculture and industry sectors along with the sluggish service sector income growth. Raising income needs strengthening of institutional systems with a greater State’s intervention.

Income must rise, through incorporating advance technology and innovations for scaling up the productivity and earnings with the State’s intervention, intense market interaction including trade and people’s participation by valuing their work culture, to enhance the social and economic well-being of the people of the State. Innovations tend to have positive effect on employee’s productivity and income.

Manipur Government may earmark budget to finance on innovations for the advanced technology driven agriculture, industries or service deliveries and start-ups that may stimulate to generate sufficient decent employment opportunities and thereby raise income.