"Economic growth in the recent past has been led by increase in labour productivity." Explain this statement. Suggest the growth pattern that will lead to creation of more jobs without compromising labour productivity.
Indeed, the statement accurately reflects India's recent growth trajectory, often termed "jobless growth." This has been driven by a significant increase in labour productivity, where each worker produces more output. This surge comes from capital-intensive industries and the services sector, especially IT and finance, which have adopted automation and technology. As a result, the Gross Value Added (GVA) has increased substantially without a proportional rise in employment. While high productivity is desirable, it has left a large section of the workforce in low-paying, informal jobs, as sectors like manufacturing failed to absorb surplus labour from agriculture.
To foster a growth pattern that creates more jobs without sacrificing productivity, a two-pronged strategy is essential.
First, we must aggressively promote labour-intensive sectors that also have scope for productivity gains. These include:
- MSMEs: Supporting them with credit, technology, and market access.
- Textiles and Apparel: Leveraging schemes like PLI to become a global hub.
- Tourism and Hospitality: Building infrastructure to create local jobs.
- Food Processing: Linking farms to factories to generate rural employment and add value.
Second, we must invest in skilling, reskilling, and upskilling the workforce. A skilled workforce can adapt to new technologies, ensuring that the jobs created are not only numerous but also of high quality. This balanced approach, focusing on both high-tech and high-employment sectors, can ensure that economic growth is both productive and inclusive.
Answered By:
Sarvesh Jha
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Important Questions from GS3
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What were the factors responsible for the successful implementation of land reforms in some parts of the country? Elaborate.
