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Why is India’s economic growth rate now being called jobless growth? How then is India’s economy growing now?

Why is India’s economic growth rate now being called jobless growth? How then is India’s economy growing now?

Key Trends in Job Creation in Last Few years;
• During the last decade (2001-11), the growth rate of the labour force (2.23 per cent) was significantly higher than the growth rate of employment (1.4 per cent), which itself was several-fold less than the growth rate of the economy. According to Census 2011, the average growth rate of the economy was 7.7 per cent per annum, when it was only 1.8 per cent for employment.
• 66th round of the National Sample Survey Office (NSSO) data on employment in 2011 revealed that between 2004-05 and 2009-10, only 1 million jobs were added per year; in a period when the economy averaged a record 8.43% growth annually.
Trilok Singh, On the one hand, “In the eight Labour-intensive sectors, Only 1.55 Lakh new jobs were created in 2015. That rose to 2.31 Lakh in 2016. On the other hand, 4.19 Lakhs new jobs in 2013 and 4.21 Lakhs new jobs in 2014 were created”…. 2017-On wards?? (We can say, JOBLESS GROWTH ORDER???), The Biggest failure of so called, Present Modi’s Development Model, Government Of India ….
• An Indian Labour Bureau survey of 2015 showed that 2,000 companies in eight sampled industries generated all of one lakh jobs, a fall from the four lakh generated in 2014, even though growth in 2014 was lower than in 2015.
• A HDFC Bank report on India’s tapering jobs growth says that “employment elasticity” in the economy is now close to zero – for every one point rise in GDP, jobs grow only 0.15. Fifteen years ago, it was 0.39.
Reasons behind the Jobless growth
• In India, growth is attributed to service sector, whereby both employment and wages have seen a rise. But as figures say, the biggest employing sector in India is the Agriculture sector, employing 45% of the population but contributing 15% to the GDP, whereas Service sector is the biggest contributor to the GDP but employs less than 30%. IT and Financial services are drivers of service sector growth in last 2 decades however both of these sector are not employment intensive.Thus contributing to jobless growth in India.
• Labour –intensive manufacturing sector did not become the engine of growth in India. In fact, it was the knowledge-intensive services sector which along with some segments of capital intensive manufacturing was the engines of growth in India. But these sectors by their nature were not employment-intensive.
• Stagnation in manufacturing output and employment and contraction of labour-intensive segment of the formal manufacturing sector: (Due to)
(a) Excess rigidity in the formal manufacturing labour market and rigid labour regulationshas created disincentives for employers to create jobs
(b) Industrial Disputes Act has lowered employment in organized manufacturing by about 25% (World Bank Study)
(c) Stringent employment protection legislation has pushed employers towards more capital intensive modes of production, than warranted by existing costs of labour relative to capital
Therefore, the nature of the trade regime in India is still biased towards capital-intensive manufacturing.
• The nature of Indian manufacturing is not employment-friendly. Most of them are automated and any employment is highly skilled. Thus they Have contribute to growth, but not necessarily to employment.
• The labour intensity of MSME is four times higher than that of large firms. – but they are not treated well in India they have poor access to credit and they are plagued by many serious problems which has limited there growth potential.

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