Jobless Growth in India during the 12th Five Year Plan (2012-2017)

Abstract

Creation of jobs outside of agriculture is one of the biggest challenges that confront the policymakers trying to achieve ‘faster, sustainable and more inclusive growth’. The Indian economy has been growing at unprecedented rates but it has been characterized by jobless growth and informalization of job opportunities in the organized sector. The paper tries to inquire into the reasons for jobless growth in India during the 12th Five Year Plan (2012-17), with the objective of providing policy recommendations to the government to increase employment. This is achieved by assessing structural changes in employment in India over the past decade and conducting gender-wise employment comparisons along with comparison with other developing countries. The paper finds factors such increase in investment in technology and automation, increased reliance on high skilled labor, sectoral inefficiencies, labor market rigidities behind India’s recent jobless growth. It is recommended that the government set up institutions to provide training to unskilled workers so as to absorb them in the formal sector. Further the government must undertake campaigns to increase awareness about girl child education to reduce female unemployment. Institutions should be set up that primarily focus on review of education and skill development to align the needs of workers with those of big businesses. It is also recommended that the government move towards relaxing some of the rigid labor laws in the Indian labor market.