The nature of economic growth in India in recent times is often described as jobless growth. Do you agree with this view? Give arguments in favor of your answer. [UPSC, 2015]
Published: December 31, 2017
Yes, India’s economic growth has been jobless growth in recent times mainly due to the negative / almost zero employment elasticity. Most economic sectors in India have employment elasticity close to zero except few such as construction. During 2004-14, India saw some of the highest rates of gross domestic product (GDP) but it did not translate into jobs in most sectors. The number of workers did not only decrease in farm sector but also manufacturing. The government explained this by quoting that labour intensive technology has been replaced by capital intensive technology and more and more labour force has been accommodated in unorganized sectors or new jobs in the informal sector, with many others went converted into successful small scale entrepreneurs. This is used to explain that the highest employment elasticity has been shown by the Construction and utilities sector (which includes energy, water and waste management).
The possible solutions to suggest include: resolving pernicious problems of the farm sector to make farming attractive; skill enhancement to improve quality of jobs along with numbers; giving a boost to manufacturing, particularly, MSME sector which if flourish can work as employment engines.
Model Questions Category: 060 - Economic Growth Development