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.

GS 3
Economy
2015
12.5 Marks

Subject: Economy

Answer:

India's economic trajectory has sparked debates about the correlation between GDP growth and job creation. The recent data challenges the notion of jobless growth, with employment elasticity of 1.11 between 2017-23, indicating that every 1% increase in GDP led to a 1.11% rise in employment, marking a significant improvement from the near-zero elasticity during 2011-16.

Evidence Against Jobless Growth

  • Robust Job Creation: The economy generated 46.7 million new jobs in FY 2023-24, expanding total employment to 643.3 million, reflecting a substantial 6% growth rate.

  • Sectoral Transformation: Agriculture sector's employment share increased from 44.1% in 2017-18 to 46.1% in 2023-24, indicating structural changes in employment patterns.

  • Formal Sector Expansion: The growth in formal sector employment, coupled with rising GST registrations, suggests improved job quality and formalization of the economy.

Challenges in Employment Generation

  • Manufacturing Sector Decline: The sector's employment share decreased from 12.1% to 11.4% between 2017-18 and 2023-24, raising concerns about industrial job creation.

  • Services Sector Contraction: Employment in services reduced from 31.1% to 29.7%, despite being traditionally considered a major employment generator.

  • Quality of Employment: Rising agricultural employment might indicate disguised unemployment and lower productivity jobs.

Way Forward

  • Skill Development: Implementation of schemes like Pradhan Mantri Kaushal Vikas Yojana to enhance employability.

  • Manufacturing Push: Strengthening initiatives like Production Linked Incentive (PLI) scheme to boost manufacturing employment.

  • Services Sector Reform: Focus on emerging sectors like digital services and e-commerce to create high-quality jobs.

Current data suggests that India's growth is not jobless but requires qualitative improvements. With projected GDP growth of 6.5% for FY 2024-25 and continued policy support through initiatives like National Skill India Mission and Make in India, the economy shows potential for sustained job creation across sectors.

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