ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Jayan Jose ThomasSubscribe to Jayan Jose Thomas

The Demographic Challenge and Employment Growth in India

The working-age population of India is growing in size, the labour force is shifting away from agriculture and, with higher education, workers are also seeking better-quality non-agricultural jobs. However, the trends between 2004-05 and 2011-12 indicate that employment generation in the country has been inadequate to meet this challenge. Construction has virtually become the only source of incremental employment in rural India. In the urban areas, men have been able to obtain a disproportionate share of high-productivity employment.

India's Labour Market during the 2000s

The growth of gross domestic product in every sub-sector of the Indian economy accelerated during the second half of the 2000s, compared to the first half of the decade. However, employment growth in most sectors except construction decelerated. This jobless growth was partly the result of positive changes such as the reduction of "distress employment" in agriculture, created during the previous half-decade, and an expansion in the population of students. Rural wages rose and average educational levels of the workforce improved. Government interventions in rural India since the mid-2000s, particularly the Mahatma Gandhi National Rural Employment Guarantee Act, seemed to have aided these positive transformations. However, manufacturing employment in the country fell and employment growth slowed down in most constituents of the services sector. The new jobs generated were predominantly in rural construction. The slow progress in the diversification of India's employment structure has led to large-scale withdrawal of women from the labour force, with the number of women thus "missing" being as large as the population of Brazil.
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