NEW DELHI: A study by Indian Institute of Management (IIM), Lucknow in collaboration with researchers from Birla Institute of Technology and Science (BITS), Pilani, and the ministry of agriculture and farmers welfare, reveals that despite India’s impressive
economic growth
from 2004-05 to 2017-18,
employment generation
has lagged the country’s growing working-age population.
The study notes an employment decline starting in the 1990s, recovering in 2004–05, reaching near-stagnation in 2011–12.
As per the study, despite a remarkable economic growth phase from 2004–05 to 2017-18,
job creation
remained lacking, leading to a period of ‘jobless growth,’ where workers remained underutilized despite the increased working-age population (ages 15 to 64), as the analysis suggested a key policy intervention – a conscious effort to make the manufacturing sector more labour-intensive for inclusive growth. It also stated that recent improvements in health and education in India may positively influence the conversion of unemployed youth into a high-quality and skilled workforce.
The study – Discerning the Long-Term Pace and Patterns of Employment in India – published in the Indian Journal of Labour Economics while calling attention to identifying
labour-intensive manufacturing sector
stated that the slowdown in employment rate is primarily due to sectors with good potential registering lower employment growth and that despite an increase in the number of people that can work, economic growth has caused in net labour displacement.
Analyzing data from the National Sample Survey Office (NSSO) Employment and Unemployment Survey, and Periodic Labour Force Survey Dashboard, the researchers found that the agricultural sector, though employing the most youth, contributed low value-added to the overall economy, resulting in significant employment challenges. Non-farm sectors, with greater economic potential, exhibited a lower inclination to hire, despite their capacity to uplift the economy.
The research was led by Prof D Tripati Rao, senior professor of economics, business environment area, IIM Lucknow, Dr T Triveni, ministry of agriculture and farmers welfare, and Prof Balakrushna Padhi, BITS Pilani.
Rao said: “Apparently, economic growth, rather than creating more jobs, has resulted in net labour displacement. Alongside the number of jobs created, it is equally important to examine the quality and decency of jobs, as there is a strong linkage between productivity and job decency.”
On stagnation in employment generation despite economic growth, the research finds various reasons as contributing factors, “including a high percentage (55%) of self-employed workers in India compared to 33% in the US. Gender disparity in employment patterns persists, and unemployment is growing among highly educated youth.”
Another key reason Rao said is that the “new employment structure relies on non-standard types like casual, contract, and fixed-term employment, intertwined with social hierarchy and discrimination, resulting in new forms of precariousness and extending general disparity in the labour market.”
While as per NITI Aayog, the short-term gig and platform economy are growing, and expected to reach 23.5 million by 2030, the workers lack job security in the informal sector, the study found.
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