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India’s economic growth has moved from not just being a jobless regime but to being a ‘job-loss’ one, suggests new research. In a study published in the Economic and Political Weekly, K.P. Kannan and G. Raveendran break down the latest Periodic Labour Force Survey (PLFS) findings to suggest that the Indian economy is losing its ability to absorb new entrants to the work-force with less-educated rural women suffering the most.

Combining historical National Sample Survey (NSS) employment data with the recently-released PLFS survey, the authors find that the ability of the Indian economy to absorb its growing working-age population has been steadily decreasing. In 2004-05, 58% of the population entering the workforce in the previous two decades were absorbed into the workforce but by 2011-12 this figure had fallen to 15% in 2011-12. In 2017-18, this figure turned negative (-5%) suggesting that some of the working-age population actually left the workforce. And all this has happened even while India recorded positive aggregate growth.

They estimate that the economy lost 6.2 million jobs between 2011-12 and 2017-18. Breaking down jobs by location, gender, education and sectors, they find that it was mostly the less educated (below secondary level) who lost jobs. Within this cohort, it was rural women who suffered the most (rural women's employment fell by 24.7 million).

Sectoral analysis of the data shows that the net job loss stems from losses in sectors such as agriculture, quarrying, mining and manufacturing. Taken together, job losses in these sectors accounted for 95% of the total job loss. According to the authors, this jobs crisis is a result of several structural and policy failures in agriculture, rural-to-urban migration and education.

Also read: From Jobless to Job-loss Growth: Gainers and Losers during 2012–18

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