India experienced jobless growth in reform years

India experienced jobless growth in reform years

Paromita Shastri
Updated21 Feb 2007, 12:11 AM IST

New Delhi: Anew study by the International Labour Organization (ILO) has just confirmed what we already suspected: India’s remarkable growth in the nineties, widely held as reform years, has been mostly a jobless one.

In that period, the rate of India’s employment grew far more slowly than the rate of the economy.

Total employment growth in India fell from over 2% per year in the eighties to just under 1% in the nineties.

The rate of growth of gross domestic product was 6.42% in the last decade, while it was lower at 5.05% two decades ago when more jobs were created. India’s economic reforms were put in place in 1991.

The fall in job generation was across organized and unorganized sectors. In the organized sector, a downsizing of the public sector contributed to job losses, while in the unorganized sector, casual employment grew well, though not enough to meet the needs of this dominant sector.

Less than 10% of India’s workforce is included in the organized sector.

Looking at the larger global picture, the study says that the lack of expanding employment opportunities was the main reason why countries were unable to bring down poverty levels significantly, despite their speed of growth equalling, as in the case of India, the growth record of East Asian countries.

In India, labour is defined as a worker aged above 15 years up to the age of 60.

The trend is common to eight Asian countries, said the study titled ‘Asian Experience on Growth, Employment and Poverty’, conducted jointly with the UN Development Programme centre in Colombo. These include Cambodia, Indonesia, Malaysia, the Philippines, Sri Lanka and Thailand.

However, the study admits, despite the negligible growth in jobs, poverty went down slightly faster in the post-reform period, at 3.8% every year in rural India from 0.3% during the pre-reform period. Urban India fared much better. From a rise of 0.7% in the number of poor people, poverty reduction increased to 2.2% in the nineties.

The study, however, does not explain whether this happened because of a rise in self- employment or other reasons.

Another positive outcomein rural India was a strong growth in real wages for casual agricultural labourers and workers in rural informal employment, indicating fewer farm and rural workers are available in India’s villages. This could be a result of more potential workers spending time in school.

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First Published:21 Feb 2007, 12:11 AM IST
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