Introduction
The 1991 economic reforms accelerated India's gross domestic product (GDP) growth, averaging 6% to 7% annually over subsequent decades. However, this expansion was accompanied by jobless growth—with employment elasticity dipping below 0.1—which disproportionately strained the informal workforce and vulnerable socio-economic groups.
Impact on the Informal Sector and Vulnerable Sections
- Informalization of Labour: Capital-intensive growth predominantly bypassed low-skilled labour. Consequently, around 58.4% of the workforce remains engaged in insecure self-employment and informal arrangements (PLFS 2023-24), while modern expansion has fueled unregulated gig and contract work.
- Widening Economic Inequality: Growth adopted a K-shaped trajectory, leading to acute wealth concentration where the top 1% holds roughly 40% of the national wealth (World Inequality Report). Concurrently, marginalized communities such as Scheduled Castes (SCs) and Scheduled Tribes (STs) faced disruption of traditional livelihood systems.
- Disproportionate Vulnerability of Women and Tribals: Women have largely entered low-paying, precarious informal jobs with negligible social security. Furthermore, rapid industrialization and resource extraction frequently led to tribal displacement without adequate rehabilitation or statutory forest rights protection.
- Agrarian Distress: Small and marginal farmers were directly exposed to volatile international markets without commensurate domestic safety nets or adequate trade safeguards.
Corrective Measures for Inclusive Growth
- Promoting Employment-Elastic Manufacturing: Restructure industrial policies and Production-Linked Incentive (PLI) schemes toward labour-intensive sectors like textiles, leather, and food processing to productively absorb surplus agricultural labour.
- Universalizing Social Security: Expeditiously operationalize the Code on Social Security to extend health, pension, and life benefits to gig, platform, and unorganized workers. Adopting apprenticeship-linked models, such as Germany's dual vocational education framework, can facilitate formal upskilling.
- Strengthening Human Capital: Enhance social sector allocations through systemic capacity building, ensuring full implementation of the Right to Education Act, 2009, and expanding Ayushman Bharat PM-JAY coverage to drastically lower out-of-pocket healthcare expenditures.
- Revitalizing Rural Livelihoods: Upgrade rural employment guarantees into productivity-enhancing programs focusing on climate-resilient natural resource management, water conservation, and rural micro-enterprises.
Conclusion
Transitioning toward a truly inclusive Viksit Bharat demands shifting from pure output-driven metrics to holistic structural transformation. Prioritizing formal job creation, progressive redistributive policies, and social safety nets will ensure that the benefits of economic growth reach the bottom of the socio-economic pyramid.