Jobless growth

18 Jun Jobless growth

GS PAPER-3, GROWTH

SOURCE-pib

Context-

• Jobless growth is an economic phenomenon in which a macroeconomy experiences growth while maintaining or decreasing its level of employment.
• The Indian growth experience of the last decade can be called jobless growth as the rate of employment growth is less than population growth.

The following aspects can be highlighted regarding this:

• While the share of employment has largely declined in the Agriculture sector, the Service and Manufacturing sectors have failed to absorb all the people shifting from the agriculture sector.
• The rapid rise of employment opportunities in the informal or unorganized sector in recent years is another aspect of employment generation in India, which further marginalizes labor.
• While the IT or Service Sector has been the spearhead of economic growth in India after the advent of globalization, they can’t absorb any significant labor. Because the sector requires highly skilled people only.
• During 2005-10, only 1 million net jobs per annum were generated in the organized sector, whereas 60 million people entered the labor market of India.
• Large scale unemployment among engineering graduates, postgraduates like MBA and doctorates are other examples of jobless growth. This is the reason why lakhs of students including engineers, MBA or Ph.D. students applied for only 300 posts of peon in Uttar Pradesh.

Way Forward-

• The answer to jobless growth lies in policy initiatives that will promote the manufacturing and services sector. Reforms in labor laws, provision of infrastructure, encouragement of small-scale industries, and promotion of export-oriented light industries that are manpower intensive are some of the policy initiatives that are required.
• The experiences of developed countries have demonstrated that the growth of smaller businesses can drive employment generation.
• Further education and skill development is the need of the hour to increase employment with economic growth by harnessing the potential of demographic dividend.
  

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