Sher Singh Verick, deputy director, ILO Decent Work Team for South Asia and Country Office for India, strives to unravel India’s high but “jobless” growth mystery. Excerpts from an e-mail interview:
On high growth, low jobs
Economic growth through investment, consumption and exports generally results in more jobs, but the relationship isn’t linear: the nature of growth will also impact the number and quality of jobs.
In India’s case, a big puzzle for the government and academics was picture created by labour market data covering the 2000s. In particular, the National Sample Survey data indicated a net increase in employment of just 1.1 million from 2004-05 to 2009-10. Many commentators see this as evidence of “jobless growth” and, indeed, taken at face value, labour market figures from the second half of the 2000s do give that impression. But digging deeper reveals a far more complex story. During the 2000s, employment did grow strongly in India, but this was more concentrated in urban areas and for men.
It is often forgotten that employment grew very strongly during the end of this period, with total employment in India increasing from 459 million in 2009-10 to 472.9 million in 2011-12. Thus, compared to the increase of just 1.1 million over a five-year period (2004-05 to 2011-12), employment rose, in net terms, by almost 13 million in just two years.
Therefore, looking at aggregate figures for India is misleading, especially because data has been infrequent.
On job trends
One positive trend is the falling share of unorganised sector workers, from 86.3 per cent in 2004-05 to 82.2 per cent in 2011-12. It shows the average Indian enterprise is getting bigger. Another positive trend is the rising share of regular-wage/salaried workers in the labour market, now accounting for 17.9 per cent of it.
One disconcerting trend is the rise in the share of informal workers in the organised sector because of a greater use of contract and other forms of casual labour.
On contract labour
The wage disparities faced by contract workers is well-known and has been a source of industrial unrest. For employers, excessive reliance on contract labour poses major challenges in terms of increasing productivity and efficiency in production, which requires a stable workforce and investment in workers’ skills.