STRUCTURE
Introduction – A short introduction to Jobless growth (15 words)
Body – Explain relation between Economic growth and jobless growth(220 words)
Conclusion – Mention a short conclusion (15 words)
ANSWER
Jobless growth can be defined as an economic condition in which a macro economy experiences growth while maintaining or decreasing its level of employment. The term was coined by the economist Nick Perna in the early 1990s.
The recent report of the Periodic Labour Force Survey has led to two major conclusions regarding India’s current growth – the labour force is shrinking and unemployment is rising. Though the present number of 6.1% might not indicate much, the fact that it is the highest unemployment rate since 1971-72 would represent the gravity of the situation. Between 2016 and 2017 about 1.5 million jobs were lost only in the BSIF, IT and Telecom Sector due to consolidation.
This does not mean that Indian economy is not growing. India’s GDP growth rate is unprecedented with a 5 year average of 7.5 %. But, the World Bank has said that India has to create 13.5 million jobs to catch up with similar income level countries. Further, India is experiencing rise in unemployment in both location and gender dimensions.
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 The government explained this by quoting that labour intensive technology has been replaced by capital intensive technology and more and more labour force has been accommodated in unorganized sectors or new jobs in the informal sector, with many others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.
