Due to opening up of the Indian economy, services sector boomed in India.

This led to high

growth rate. But, services sector cannot absorb labour as much as industrial sector or
agricultural sector does. Hence, jobs were not created in proportion of growth. Therefore, the
name jobless growth.

Also, labour force increased after 1990s, earlier women were not in the labour force but
following globalisation, women started searching for jobs. But Indian economy was not
creating enough jobs.

India seems to have the biggest pools of unemployed people in the world. The prospect of
getting a job for those who are unemployed will be an important issue in the General
Elections 2019. According to CMIE (Centre for Monitoring Indian Economy),
unemployment rate in October in India rose to 6.9 per cent. The number of unemployed
which fell to 14 million in 2017 is now at nearly 30 million. This leads one to wonder
what is wrong with the economy which fail to absorb the unemployed.

One of the main reasons is that the Indian economy is not witnessing a sustained rate of
high growth because investment is subdued and the manufacturing sector, which creates
the maximum jobs, is growing at a snail’s pace. The Industrial Index of Production that
includes manufacturing growth was at 4.2 per cent last month. The slowdown in industrial
and infrastructure sectors, especially the construction sector, and the low volume of IT
growth of exports have led to only 1.9 per cent year on year hiring.

It seems that jobs in both the private and public sectors are shrinking. Corporate India is
hiring less because of slower than expected recovery. The growth of employee count of
India Inc. has been the lowest in 2017-18 in the last 3 years. According to one report
(Capitaline companies’ annual report), at the end of 2018, only 3.5 million persons were
employed by top 171 listed companies that are part of the BSE 200 index.

Around 6 out of 10 new corporate jobs were due to industrial hiring. But due to the slow
growth in major industries in the last three years, the headcount has been up by only 0.5
per cent.

Also non-banking finance companies and retail banks that were top job creators in the last
three years are faced with the present liquidity crisis which will force them to hire less.

public sector jobs are frozen. In general, after liberalisation, the public sector has shrunk
due to its withdrawal from many economic activities. Jobs in banks have shrunk due to
IT.
Millions of youth have applied for an online recruitment test conducted by the India n
railways. It received more than 24 million applications for roughly 120,000 vacancies.
Even persons with PhDs are applying for low end government job vacancies. It shows the
extent to which people are desperate for public sector jobs because of social se curity and
higher minimum wages.

In the agricultural sector, young people wanting to leave farming and work in towns and
cities are getting more and more disappointed thus increasing pressure in nn farm sectors.
This is particularly severe in the northern States. They lack the skills to be employed in
jobs that would provide a decent living wage.

Women on the other hand have been unemployed in large numbers in rural areas because
of the mechanisation of farming operations like sowing, weeding, winnowing an d
harvesting. More and more rural women are unemployed because in MNREGA, none of
the States give women 100 days of work. Stagnation of real wages and the government’s
inability to ensure timely and reliable wage payments is discouraging rural women to sta y
away from one of the biggest employment scheme.

In urban areas, women in secretarial jobs and other low paying jobs are losing out to
automation. According to the World Bank, the use of automation in India will lead to the
loss of 69 per cent of jobs in the future. Automation is responsible to a large extent to the
jobless growth in India.

India also has mostly poor quality jobs and hence training is needed for people to get
better jobs. Skill certification is needed as well as a focused industrial policy and a
national employment policy. There is also need to foster domestic competition and protect
domestic industries against foreign competition. This is necessary because many of our
small scale industries have been destroyed by the huge influx of C hinese products. The
government has to promote vigorous export promotion and undertake some import
substitution.