What is jobless growth? Jobless Growth in India

Everyone is affected by the possibility of a jobless growth economy. Investors, employees, and industries must adjust to the new economic order as the economy grows without corresponding increases in the number of jobs. When the economic expansion is accompanied by significant unemployment, the economy is undergoing structural changes. For some, this structural upheaval presents an opportunity; for others, it presents unpleasant decisions.

What is jobless growth? 

As the population of the country is expanding, people need to work to financially support their families and themselves. To employ all individuals looking for work, an expanding economy is required. People looking for jobs will be unable to find them if the economy does not grow sufficiently. Individual workers with employable abilities will be the first to obtain work in any economic situation. If work prospects are plentiful, those with less desirable skill sets will have more opportunities.

Even if the economy grows in a jobless growth economy, unemployment remains stubbornly high. This usually occurs when a big number of people lose their jobs, and the subsequent recovery is insufficient to absorb the unemployed, underemployed, and those just entering employment

Jobless Growth in India 

Jobless growth occurs when the economy can create more products and services without increasing employment possibilities at the same time. Because India has the largest youth population, this demographic dividend must be fully utilized. During the 12th five-year plan, India experienced a period of jobless growth (2021-2017).

For eg: Although agriculture contributes very little to the country’s overall GDP, a larger percentage of the people is involved in it. Similarly, the tertiary sector provides the most to India’s overall GDP; nevertheless, the jobs created by this sector are primarily of the official variety, limiting the participation of the informal workers.

What is jobless growth? Jobless Growth in India
What is jobless growth? Jobless Growth in India 3

Past Trends in India 

  • Job creation is the single most pressing issue faced by our country this decade. India possesses the world’s largest youth population. This demographic dividend, however, must be taken advantage of.
  • According to an ILO analysis, India’s unemployment rate increased from 1.7 to 1.8 million in 2018, and the country’s ’employment elasticity’ declined to 0.15 percent, implying that a 1% increase in GDP only created 0.15 percent of jobs. This means that the country’s unemployment rate has been continuously increasing over the last ten years.
  • The jobless rate increased from 3.9 percent in April 2017 to 6.1 percent in February 2018, according to data from the Center for Monitoring Indian Economy (CMIE).
  • Because the country is working hard to achieve Make in India, the manufacturing sector has the potential to create jobs for a big portion of the country’s semi-skilled workforce. In manufacturing, specific industries or manufacturing enterprises, such as garments, footwear, furniture, toys, and other similar light manufacturing operations, must be prioritised. For eg:  the textile industry contributes about 15% of the overall GDP. Light industries, in this way, can expand GDP while also producing a big number of jobs with a relatively modest investment.
  • Switching to these light manufacturing operations has two advantages for India. First and foremost, these industries have the potential to employ a huge portion of India’s unskilled and semi-skilled workforce. Second, because China is turning toward more wage-earning businesses, there is a vacuum in these areas. China was previously the top contributor, notably in the garment industry.
  • Aside from all of these advantages, these light sectors are also helping to close the gender gap in employment. Women are employed in great numbers in light industrial industries, according to statistics.

Related: 4 Possible Reasons for Youth Unemployment in Many Countries

The relation between job and economic growth 

  • The importance of focusing on jobs is evident. However, higher economic growth, on the other hand, will not solve the job shortage.
  •  The movement of labour from informal sectors like agriculture to more formal sectors like manufacturing and service sectors can result in job creation.
  • As some Southeast Asian countries discovered the hard way in the late 1990s, such rapid growth can lead to stagnation once the available supply of informal labour is depleted. Growth, on the other hand, can be achieved without significant job creation in the formal economy, but rather through increased productivity.

What should India do then?

India should strive for growth that is fueled by both increased productivity and the modernization of its workforce, especially as improved jobs are critical to improving the lives of millions of people who are engaged, or underemployed, in low-salary farm occupations. Ironically, attaining both of these goals will necessitate labour reforms, which can both increase labour mobility within the formal sector and lower the hurdles that businesses encounter when hiring workers. However, labour reforms will not be effective unless they are accompanied by an increase in government spending on asset and job-creating areas like infrastructure, which will encourage private investment. Thus, job creation must be a central axis in the formulation of economic and social policies.

Author: Admin

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