Q1. 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 favour of your answer. 

Model Answer:

Introduction

The phenomenon of jobless growth refers to a situation where an economy experiences significant economic growth but without a corresponding increase in employment opportunities. In the context of India, this term has been frequently used to describe the nature of its economic development in recent years. 

Body

Economic Growth Trends in India

1. Rising GDP with Slow Employment Growth: India’s GDP has grown rapidly, yet job creation has lagged. Unemployment rates have remained high, showing growth is concentrated in sectors with limited employment generation.
2. Service Sector Dominance: The services sector contributes over 55% of GDP but employs less than 30% of the workforce, causing a mismatch between economic growth and employment creation.
3. Manufacturing and Agrarian Stagnation: Manufacturing contributes only 25% to GDP, and agriculture, despite employing nearly half the population, has low productivity, limiting job opportunities in both sectors.

How India's Growth is Jobless Growth

1. Low Employment Elasticity: Growth in capital-intensive sectors like IT and finance has reduced the employment elasticity, meaning job creation has not kept pace with economic growth.
2. Automation and Technological Advancements: Increased automation in manufacturing and services has limited the need for human labour, leading to fewer jobs in sectors traditionally reliant on manual work.
3. Informal Employment: A large portion of India’s workforce is in the informal sector, contributing little to formal growth. Most new jobs are in the gig economy, lacking security and benefits.
4. Underemployment and Disguised Unemployment: Many workers, especially in agriculture, are underemployed or working in low-productivity jobs, meaning they do not contribute significantly to overall economic output.
5. Declining Female Labor Force Participation: Despite growth, the participation of women in India’s workforce has declined, reflecting societal barriers and a lack of adequate job opportunities for women.

The Way Forward

1. Boosting Manufacturing Sector: Focusing on labour-intensive manufacturing industries like textiles and electronics can generate jobs. Initiatives like “Make in India” should be strengthened to increase the manufacturing sector’s contribution.
2. Skilling and Education: Enhancing vocational and digital skills through initiatives like Skill India will improve the employability of the workforce, aligning their skills with modern market demands.
3. Reviving MSMEs: MSMEs are key employment generators. Promoting easier access to credit, infrastructure, and markets will help these enterprises create more jobs, especially in rural areas.
4. Agricultural Productivity and Rural Employment: Investing in agricultural technology and infrastructure will improve productivity, reducing disguised unemployment in rural areas and creating more meaningful employment opportunities.
5. Promoting Formalization of the Economy: Encouraging businesses to formalize, improving compliance costs, and providing social security to informal workers will bridge the gap between economic growth and job creation.

Conclusion

India's growth has exhibited characteristics of jobless growth, driven by capital-intensive sectors. A comprehensive policy focus on labour-intensive sectors, skilling, and rural employment is crucial for inclusive development. 

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