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Faltering Manufacturing Growth and Employment
Declining growth and a stagnating employment share of manufacturing in a high-growth regime in India are disconcerting, given the pride of place assumed by manufacturing as the "engine of growth." The sustainability of high growth is linked intrinsically to a trajectory that creates gainful employment. This paper argues that the manufacturing sector, which recorded declining employment elasticity in the organised sector, will not be able to mend the gap between growth and employment. Rather the goal of rejuvenating manufacturing has to be contextualised in a larger strategy of full employment with interventions related to demand structures, technology, size structure of firms, as well as a calibrated engagement with the global market.
The author would like to thank the anonymous reviewer for comments and suggestions. This is a revised version of the paper presented in the national conference on “India’s Industrialisation: How to Overcome the Stagnation?” held at ISID, New Delhi.
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