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India's Jobless Growth in Recent Times:: Name: Kunal Thakre Roll No: 2020BLP031

Kunal Thakre's roll number is 2020BLP031. India has experienced jobless growth in recent times where GDP growth over 7% for a decade and a half failed to generate sufficient employment. While the service sector drove growth, it employs less than 30% and is not employment intensive. Agriculture employs 45% but contributes only 15% to GDP. Unemployment has risen in recent years despite GDP growth, with only 1 million jobs added annually from 2004-2010 during 8.43% growth. Solutions include improving skills training to match demand, decentralizing jobs and skills planning, and developing employment-friendly manufacturing.

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Akshay Mishra
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39 views

India's Jobless Growth in Recent Times:: Name: Kunal Thakre Roll No: 2020BLP031

Kunal Thakre's roll number is 2020BLP031. India has experienced jobless growth in recent times where GDP growth over 7% for a decade and a half failed to generate sufficient employment. While the service sector drove growth, it employs less than 30% and is not employment intensive. Agriculture employs 45% but contributes only 15% to GDP. Unemployment has risen in recent years despite GDP growth, with only 1 million jobs added annually from 2004-2010 during 8.43% growth. Solutions include improving skills training to match demand, decentralizing jobs and skills planning, and developing employment-friendly manufacturing.

Uploaded by

Akshay Mishra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Name: Kunal Thakre

Roll No: 2020BLP031

India's jobless growth in recent times:

In recent times India’s GDP growing more than 7% for the last decade and a half but the economy could
not generate enough employment.
In India growth is attributed to service sector whereby both employment and wages have seen a rise. But
as figures say, the biggest employing sector in India is the Agriculture sector, employing 45% of the
population but contributing 15% to the GDP, whereas Service sector is the biggest contributor to the GDP
but employs less than 30%. IT and Financial services are drivers of service sector growth in last 2 decades
however both of these sector are not employment intensive. Thus contributing to jobless growth in India.
As per 66th round of the National Sample Survey Office (NSSO) data on employment in 2011 revealed that
between 2004-05 and 2009-10, only 1 million jobs were added per year in a period when the economy
averaged a record 8.43% growth annually.
An Indian Labour Bureau survey of 2015 showed that 2,000 companies in eight sampled industries
generated all of one lakh jobs, a fall from the four lakh generated in 2014 even though growth in 2014 was
lower than in 2015.
A HDFC Bank report on India’s tapering jobs growth says that “employment elasticity” in the economy is
now close to zero – for every one point rise in GDP, jobs grow only 0.15. Fifteen years ago, it was 0.39.
According to data compiled by the Centre for Monitoring Indian Economy (CMIE) the unemployment rate
rose to 7.2% in February 2019, the worst in 28 months. Meanwhile, the labour force is down 25.7 million
since September 2016 and the number of employed persons has declined by 18.3 million in the same
period.

India’s GDP growth rate in different sectors is shown below.


Reasons for which the unemployment in India is increasing despite of continuous GDP
growth:
1)Indian Government since the second five-year plan focussed more on higher education rather than basic
education. In order to create mass scale manufacturing jobs, the workforce should have some basic skills
however in India because the focus was on higher education, we failed to create enough basic skilled
workforce required for labour-intensive manufacturing unit.
When India adopted economic reforms in 1991, We had a pool of highly educated workforce but we had a
shortage of labour force with basic skills,
2) A worrying trend of the Indian job market is that informalisation is gradually taking over the formal job
markets as well. The share of informal jobs in public sector increased from 30% to 35% within a span of five
years between 1999-00 and 2004-05 while in the formal private sector this has decreased from 69% to
63%.
3) Slow Infrastructure Development: Lack of backward and forward linkages between agriculture, industry
and service sector has failed to create jobs.
4) The nature of Indian manufacturing is not employment-friendly. Most of them are automated and any
employment is highly skilled. Thus they Have contribute to growth, but not necessarily to employment.
5) Agriculture is no longer supporting half the population, and the fresh pressure on jobs is becoming
apparent from rural to urban migration in search of employment.
6) Industrial Disputes Act has lowered employment in organized manufacturing by about 25% (World Bank
Study).
7)Literacy rate is increasing but the level of education system is below average due to which people are
unable to create to grab the jobs in India.
8)The falling labour participation rate implies that lower proportion of the working age population is willing
to work.
Unemployment rate in last 8 years.

Solutions:
1.Improving the labour market information system where emerging demand for skills are spotted quickly
and the necessary training and certifications for the same are created.
2. Quick improvements in public-private partnership in capturing demand for skills and following through
with quick investments in skill-building to match demand with supply.
3. Jobs and skills planning should be decentralized and it has to be done at state and district levels, where
there is granular information on education, skills and job options.
4.Implementing a new model of manufacturing which is high-skilled and where high-end cottage
manufacturing can create employment at the small scale level.
5.If urbanization is good and well planned, then job growth will be positive. Government should
concentrate on the development of towns and narrow areas and service it with good infrastructure to
generate employment alongside development.
6.Government should concentrate on skill development of human resource which is suitable as per the
demand of the market.
7.Millions of jobs will be displaced by artificial intelligence (AI), robotics, and automation in near future,
but new jobs can be created if the balance between human workers and machines can be maintained.
8.If government starts spending on public goods (schools, hospitals, dams, roads etc) instead of spending
on freebies (deep subsidies on food, farm loan waivers etc) the capacity of government to create
employment increases.

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