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As many as five million jobs were lost between 2004-05 and 2009-10 — paradoxically during the time when India’s economy grew at a fast clip — an Assocham study said.
This has put a question mark on whether economic expansion should be linked to job creation, according to the study.
Moreover, it observed that an over-emphasis on services and a neglect of the manufacturing sector are mainly responsible for this “jobless growth” phenomenon. Even as about 13 million youth are entering labour force every year, the gap between employment and growth widened during the period, the study noted.
“The Indian economy went through a period of jobless growth when five million jobs were lost between 2004-05 and 2009-10, while the economy was growing at an impressive rate,” Assocham said.
Quoting Census data, it said the number of people seeking jobs grew annually at 2.23% between 2001 and 2011, but growth in actual employment during the same period was only 1.4%.
“This large workforce needs to be productively engaged to avoid socio-economic conflicts,” Assocham Secretary General D S Rawat said.
The changing demographic patterns, he said, suggest that today’s youth is better educated, probably more skilled than the previous generation and highly aspirational.
“In a service-driven economy, which contributed 67.3% (at constant price) to GDP but employed only 27% of total workforce in 2013-14, enough jobs will not be created to absorb the burgeoning workforce,” Assocham added.
Experts argue that the growth of manufacturing will be key for growth in income and employment for multiple reasons.
For every job created in the manufacturing sector, three additional jobs are created in related activities.
In 2013-14, manufacturing contributed 15% to GDP and employed about the same percentage of total workforce, a sign that the sector has a better labour absorption compared with services.