technological progress. they are what make the “ lump of labour ” a fallacy. which of these two effects – displacement or compensation – wins out? ultimately, this is an empirical question and we have several hundreds of years of empirical evidence as a testbed. perhaps unusually, these historical data tell a remarkably consistent story. • since 1750, there has been a steady and continuous stream of labour - saving technologies which have boosted economy - wide productivity, as measured by output per unit of labour inputs ( chart 9 ). on average since 1750, growth in uk labour productivity has been around 1. 1 % per year. that means the productivity of our economies has improved by around a third each generation, a massive leap forward. • this improvement in labour productivity has not, over the medium term, caused any reduction in employment. in the uk, the employment rate today as a proportion of the total population is around 50 %, very similar to levels in the early 19th century ( chart 10 ). over time, the employment share has fluctuated around a stationary average. the same is true in other countries. • the effects of technology have been felt, at least to some degree, in hours worked, as keynes predicted back in the 1930s. in the uk, the average working week has fallen from 50 hours a century ago to around 30 hours today ( chart 11 ). nonetheless, this fall - off has fallen well short of keynes ’ prediction of a 15 - hour week. the “ leisure classes ” are no more numerous today than a century ago. • shifts in population – through changes in birth / death rates or through immigration – have also had no obvious impact on employment. the relationship between population growth and the employment share is, if anything, positive ( chart 12 ). this, too, is evidence of the compensation effects of population growth – higher output and demand – outweighing any displacement effects in the jobs market. • as technology has boosted productivity and incomes, its fruits have been harvested by workers, typically in the form of higher wages. since 1750, the upwards march of productivity has largely been matched by the upwards march of real wages ( chart 13 ). since the industrial revolution, the former has risen on average by 1. 1 % per year, the latter by 0. 9 % per year. bis central bankers ’ speeches • the same pattern was evident prior to the industrial revolution. then, the absence of technological progress led to productivity flat - lining. the real incomes of workers similarly flat

the metropolitan areas into the lead banks scheme. about 700 financial literacy centres have been set up by banks. there are rural self - employment training institutes ( r - seti ), working towards capacity building for taking up self employment ventures. rbi ’ s policy initiatives to foster financial inclusion 12. let me now turn to some of the supporting policy initiatives that rbi has taken to further the financial inclusion in the country. ( a ) reach ( i ) branch expansion in rural areas branch authorisation has been relaxed to the extent that banks do not require prior permission to open branches in centres with population less than 1 lakh, which is subject to reporting. to further step up the opening of branches in rural areas, banks have been mandated to open at least 25 per cent of their new branches in unbanked rural centres. in the annual policy statement for 2013 – 14, banks have been advised to consider frontloading ( prioritizing ) the opening of branches in unbanked rural centres over a three year cycle co - terminus with their fips. this is expected to facilitate the branch expansion in unbanked rural centres. ( ii ) agent banking – business correspondent / business facilitator model in january 2006, the reserve bank permitted banks to utilise the services of intermediaries in providing banking services through the use of business facilitators and business correspondents. the bc model allows banks to do “ cash in – cash out ” transactions at a location much closer to the rural population, thus addressing the last mile problem. ( iii ) combination of branch and bc structure to deliver financial inclusion the idea is to have a combination of physical branch network and bcs for extending financial inclusion, especially in geographically dispersed areas. to ensure increased banking penetration and control over operations of bcs, banks have been advised to establish low cost branches in the form of intermediate brick and mortar structures in rural centres between the present base branch and bc locations, so as to provide support to a cluster of bcs ( about 8 – 10 bcs ) at a reasonable distance of about 3 – 4 kilometers. bis central bankers ’ speeches ( b ) access relaxed kyc norms know your customer ( kyc ) requirements have been simplified to such an extent that small accounts can be opened with self certification in the presence of bank officials. rbi has allowed “ aadhaar ” to be used as one of the eligible documents for meeting the kyc requirement for opening a bank account. roadmap for banking services in un