Dr. Rajib Sutradhar
A working paper titled “Relative economic performance of Indian states over 1960- till 1923-24” released recently from the Prime Minister’s Economic Advisory Council (PMEAC) casts the economy of Meghalaya in a very poor light. While the report has identified the entire North Eastern states as a laggard, Meghalaya turns out to be the worst performer among them. Authored by Sanjeev Sanyal, member of the PM-EAC, and Akansha Arora, the paper showed that the per capita income of Meghalaya was always lower than the national average, but the gap has widened post 2010s. As a share of national average per capita income, the state’s per capita income has declined further from a lowly 81% in 2011-12 to 73.3% in 2020-21, before recovering slightly to 74.3% in 2023-24.
A bigger worry comes when one looks at how the labour market has performed in the state. The data from Annual Periodic Labour Force Survey, 2023-24, released from National Sample Survey Office, Govt of India, shows that the state is a basket case even within the North Eastern region, with all the indicators of labour market performance flagging off alarm bells for the region. To begin with, the state has reported a very high dependency ratio of 59.4%, vis a vis the average below 50% reported by most other states (except Nagaland) in the region and all India. High dependency ratio implies the opposite of what one terms as a phase of demographic dividend, as most resources go into supporting consumption and maintenance of the dependent population, leaving the state with a limited share of resources for accumulation and investment for further growth. Such a high dependency ratio is primarily the result of high fertility rates, another marker of underdevelopment. As per the National Family Health Survey -5, the state has a fertility rate of 2.89, the highest next to the poorest state Bihar, whose fertility rate stands at 3.02 %.
Sectoral allocation of workers shows that more than 50% of the workers in the state are still in agriculture, though the sector contributes only 23% of the state GDP, indicating a very low level of income derived by those involved in the sector. Despite the ban on coal mining, the share of state’s workers involved in quarrying and mining stands at 2.45% much higher than the national average of 0.23. In contrast, the share of workers involved in the manufacturing sector is at 2.45 %, the lowest among all north eastern states and compares very poorly with the national average of over 11%. Typically, the manufacturing sector is associated with jobs that are steady and relatively better paid.
Going beyond sectoral allocation, the health of the labour market in a state can be assessed by looking at three indicators – labour market participation, unemployment rate and quality of jobs. Estimation of unemployment rate does not include those who are not looking for jobs. Low unemployment rate means nothing if few participate in the labour market, either as employed or are searching for jobs. Poor labour market participation means that discouraged by the dimming prospects of the labour market, people may withdraw from it altogether. Labour market participation in the state is high and stands at 76%, meaning among the eligible workforce, 3 out of 4 are either employed or are looking for jobs. However, at a more disaggregated level, labour market participation at 57% is much lower in urban Meghalaya. Despite being a matrilineal society, the female labour force participation in the urban areas (57.85) varies significantly from the rural labour force participation (75%). Urban Meghalaya has not only witnessed lower female labour force participation but also reported a very high unemployment rate at over 20%, which is higher than any North Eastern state and compares poorly with national average of 8.7%.
At over 5% unemployment rate overall, Meghalaya has reported unemployment rates higher than national average in both rural and urban areas. However, the situation is particularly alarming in the urban areas. At 14.3% of unemployment rate, urban Meghalaya has reported much higher unemployment rates than any other North eastern state and compares poorly with the national average of 6.7%.
Quality of jobs is another dimension of the labour market. There are three types of jobs in the labour market– self employment, regular/ salaried work and casual work. Typically, regular / salaried jobs are considered better, followed by self employment and the worst in the category is casual work. Self-employment is itself a heterogeneous category as someone may just work in their own account enterprise or simply as a helper. Share of workers engaged as self employed is much lower in both urban (32.1%) and rural areas (56 %) of Meghalaya compared to any other state in the North East or overall all India level which reports corresponding figures of 48.7 and 64.2% respectively. However, the poor condition of the labour market in the state manifests in a very high level of casualization in both rural and urban areas in the state. Casual labour accounts for 31.5% of the urban jobs and 19% of rural jobs in the state, much higher than both all India average and any state in North East India.
The dipping economic fortunes of the state and the poor condition of its labour market have translated into high poverty rates. A NITI Aayog discussion paper titled ‘Multidimensional Poverty in India since 2005-06’ released in early 2024 reported that with 27.8% multi-dimensionally poor, the state ranks next to only Bihar and Jharkhand. High labour force participation in the state has to be also taken with a pinch of salt as the poor can’t afford to remain at home, waiting for a better job.
When the labour market performs as poorly as one in Meghalaya, it is not surprising to see the frustration and anger among the youths taking its ugly turn towards outsiders who are often portrayed as the cause of all the maladies in the every-day life of ordinary citizens in the state. Given the situation, the State Government has its hands full. It not only needs to perform well in terms of better growth, but also needs to take initiatives to record job rich growth – growth that translates into good quality jobs that give its citizens mobility in their lives.
(Dr. Rajib Sutradhar teaches at the Department of Economics, North Eastern Hill University, Shillong Campus.)