Model Answer
0 min readIntroduction
The Indian economy has experienced significant GDP growth in recent decades, particularly post-liberalization. However, a persistent concern is whether this growth has translated into commensurate employment opportunities. The term ‘jobless growth’ describes a situation where economic expansion occurs without a substantial increase in employment. This phenomenon has gained prominence in the Indian context, fueled by concerns over declining labour force participation rates and the quality of jobs being created. The question of whether India’s recent economic growth is truly ‘jobless’ requires a careful examination of employment trends alongside economic indicators.
Understanding ‘Jobless Growth’
‘Jobless growth’ isn’t necessarily zero employment growth, but rather a situation where employment growth is significantly lower than the rate of GDP growth. This implies that the economic expansion is not sufficiently inclusive, failing to generate enough jobs for the growing workforce. Several factors contribute to this, including technological advancements, skill mismatches, and a shift towards capital-intensive industries.
Arguments in Favour of ‘Jobless Growth’
- Declining Labour Force Participation Rate (LFPR): The LFPR, which represents the percentage of the population actively participating in the labour force, has been declining in India. According to the Periodic Labour Force Survey (PLFS) data (2017-18 to 2022-23), the LFPR for women remains particularly low, indicating a significant portion of the population is not even seeking employment.
- Slow Employment Growth Compared to GDP Growth: Between 2011-12 and 2019-20, India’s GDP grew at an average annual rate of around 6.7%, while employment growth was significantly lower, averaging around 2.1%. This disparity highlights the disconnect between economic expansion and job creation.
- Informal Sector Dominance & Job Quality: A large proportion of employment in India is concentrated in the informal sector, characterized by low wages, lack of social security, and job insecurity. While the informal sector provides livelihoods, the quality of these jobs is often poor.
- Automation and Technological Disruption: Increasing automation in manufacturing and service sectors is displacing low-skilled workers, contributing to unemployment and underemployment. The rise of Artificial Intelligence (AI) and Machine Learning (ML) poses further challenges.
- Capital-Intensive Growth: Growth in sectors like finance and IT, while contributing to GDP, are often capital-intensive and do not generate a large number of jobs relative to their output.
Counter-Arguments & Employment Generation
Despite the concerns, it’s important to acknowledge areas where employment has been generated:
- Construction Sector: The construction sector remains a significant employer, particularly for migrant workers. Government infrastructure projects like Bharatmala and Sagarmala have boosted employment in this sector.
- Service Sector Growth: Certain segments of the service sector, such as healthcare and education, have witnessed employment growth.
- Self-Employment & Entrepreneurship: Government initiatives like the Pradhan Mantri Mudra Yojana (PMMY) aim to promote entrepreneurship and self-employment, creating livelihood opportunities.
- PLFS Data Nuances (2022-23): The PLFS data for 2022-23 showed a slight increase in employment compared to the previous year, suggesting some recovery post-pandemic. However, this needs to be viewed cautiously, considering the base effect and the nature of employment generated.
Sectoral Analysis
| Sector | GDP Contribution (approx. 2022-23) | Employment Share (approx. 2022-23) | Employment Growth Trend |
|---|---|---|---|
| Agriculture | ~18.8% | ~45.8% | Stagnant/Declining |
| Industry | ~24.6% | ~24.7% | Slow |
| Services | ~56.6% | ~29.5% | Moderate |
Conclusion
The characterization of India’s economic growth as ‘jobless’ is largely accurate, particularly when considering the disparity between GDP growth and employment generation, the declining LFPR, and the prevalence of informal employment. While certain sectors have witnessed employment growth, it hasn’t been sufficient to absorb the growing workforce. Addressing this requires a shift towards labour-intensive industries, skill development initiatives aligned with market demands, and policies that promote inclusive growth and improve the quality of employment. A focus on creating decent work opportunities is crucial for realizing the full potential of India’s demographic dividend.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.