Like other parts of the world agriculture and allied activities like farming, cattle rearing, fishing etc has been the mainstay of the people of Jammu & Kashmir. Before partition, Jammu and Kashmir with a geographical area of 222,870 Sq Km was the largest princely state of British India. But this large area was inhabited with only 39 towns and 8903 villages. The total population in 1947 was estimated at about 40 lakh compared to 1.39 Crore in 2017. Agriculturists and shepherds during lean period would normally visit urban centres and towns for work. The demand for labour in the state was therefore easily met by state's domestic rural and tribal work force across the year. This helped in retaining a healthy money circulation within the system and also catalysed smooth flow of money from urban to rural areas creating a much needed monetary balance.
Government service and other salaried jobs were normally taken up by a small portion of comparatively educated Kashmiri Pundits. Majority of population comprising of Muslims were more involved in skill driven arts and crafts. The prolific growth in home based artisan enterprises in cities and towns provided source of livelihood and employment to generations after generations. Dignity of labour was associated with craft and both men and women were actively involved in these home-based businesses throughout the year. Utilization of labour at different layers was therefore smoothly distributed among, urban, rural, skilled, unskilled, educated and uneducated classes. With change in time and growth in population, the demographic changes in the state resulted in a paradigm shift with unfavourable repercussions. Dignity of labour in farming, sheep rearing, handicrafts etc is a thing of past. This has tilted the scale in such a fashion that we are slowly and gradually getting buried under a pile of unemployed youth and an army of money sucking migrant workers.
From labour economics point of view, those who work and gain the capability are included in the labour force of a region as well as those who are unemployed and searching for the job or work. There are many factors that determine how labour is consumed and to what extent they are paid for their services. It is a matter of fact that unemployment rate in Jammu and Kashmir is higher than average national unemployment rate, with J&K having 24.6 percent population in the age of (18-29 years) unemployed which is far more than All India unemployment rate of 13.2 percent. Ironically, J&K provides job to around 5 Lakh migrant workers from different parts of India.
There are some interesting insights vis-à-vis J&K's labour scenario. According to 2011 census, the number of total workers in J&K stood at 43.23 lakhs. The labour force can be classified based on the activity pursued by them. In J&K state, as per activity classification in the age group of 18-29 years, self-employed persons are 32.2 percent compared to national average of 40.8 percent, casual works are only 28.8 percent compared to national level of 36.2 percent, wage/ salaried employed are 31.5 percent compared to national average of only 17.8 percent and contract works are 7.5 percent compared to national average of 5.2 percent. There is a clear indicator which shows that a major chunk of our labour force is engaged in wage / salaried employment and there is huge gap in casual works which is currently getting filled by migrant workers. Another important parameter for labour force assessment is Labour Force Participation Rate (LFPR). It is the proportion of the working age population that engages actively in the labour market, either by working or seeking for work. It provides an indication of the relative size of the supply of labour available which can be engaged in the production of goods and service. In case of age group 18-29 years, the all India average of LFPR is 47.3 percent whereas the state of Jammu & Kashmir has lowest i.e. 29.3 percent only.
Although J&K Government has established an institutional mechanism for planning and management of state's labour force and also for implementation of various legislations through various institutions like the State Labour Department, Provident Fund Organization, State Insurance Corporation (ESIC) and Jammu and Kashmir Building and Other Construction Welfare Board, however, the situation on ground is very grim. A very unorganized and out of control situation has aroused wherein locals are starving for work and outsiders are getting absorbed with ever increasing pace. The reasons are manifold ranging from changing perception towards dignity of labour to mismatch between skill requirement by markets and those imparted by our vocational education system.
Although there are numerous central and state govt. legislations, which are supposedly being enforced for safety and protection of labour rights, however, what is equally important is providing direction to the unorganized sector with a long term objective of reducing unemployment. There is an immediate need to adopt globally used policies of labour economics in order to recognize the dynamics and functions of the labour markets. Labour economics can assist in understanding the pattern of income, employment and wages by regulating employee employer exchanges. There is no doubt that J&K has a very serious unemployment problem, which is only growing bigger. The need to understand and reform our labour issues is therefore of utmost importance. In addition to employment there is a vast scope for improving the productivity of our state. Labour reforms can address both i.e. improve employment profile of the state as well as drastically improve the much needed productivity.