Jobless Growth in India

Context:

• The study by IIM Lucknow highlights a shift in India’s economic growth pattern – a surge in job creation pre-2004 followed by jobless growth.
• Even premier institutions struggle with student placements, indicating a skills gap.

Key Findings:

• Unemployment is significantly higher among highly educated youth (graduates and above) compared to the less educated.
• Gender disparity persists – female labor force participation is much lower than males.

What is Jobless Growth?

• It’s a situation where economic growth doesn’t translate into new jobs.
• This can happen during economic recovery or periods of expansion.

Factors Causing Jobless Growth in India:

• Global Slowdown: A sluggish global economy can force workers into lower-paying jobs with fewer benefits.
• Focus on Limited Sectors: Growth in sectors like finance, IT, and real estate doesn’t generate enough jobs.
• Skill Mismatch: The education system might not equip graduates with the skills employers demand.
• Underutilized Resources: Industries might not operate at full capacity due to machinery or raw material shortages, hindering job creation.
• Informal Sector Reliance: A large rural population depends on irregular, often hazardous, informal jobs.
• Stagnant Agricultural Sector: Though employing many young people, agriculture offers low value-added contributions, hindering job creation.

Impacts of Jobless Growth:

• Underutilization of labor and human resources leads to lower productivity.
• This can exacerbate poverty, malnutrition, and lower per capita income.
• Falling employment and earnings hinder India’s ability to create jobs for its growing population.

Indian Initiatives to Improve Employability:

• National Skill Development Corporation (NSDC): Finances and oversees various skill development programs.
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY): Offers short-term, industry-relevant skill training programs.
• Digital Skilling Programs: Equip individuals for the digital economy.
• Apprenticeship Programs: Encourage industry participation in on-the-job training.

Suggestions and Way Ahead:

• Focus on mass education, quality teachers, and labor-intensive manufacturing.
• Create a safer work environment for women to increase female workforce participation.
• Increase government investment and diversify the agricultural sector for higher productivity and job creation.
• Offer on-the-job training and employment subsidies to improve existing employees’ skills and job satisfaction.

Mains Practice Question:

Why does jobless growth happen? Discuss India’s recent economic performance and its impact on job creation.