DMPQ- Explain the reasons why India’s growth is called ‘growth without employment.’

Today, employment share of three sectors of economy is roughly – industry (17%), agriculture (57%) and  services (26%).

Unemployment is mainly of two types – disguised unemployment and open unemployment. Disguised  unemployment is also called under-employment. It is a situation in which a person is not contributing  fully to his potential for example, a task which could have been done by 2 people, is done by 3. It  happens when a field is over-crowded and everyone gets something out of it instead of getting full of it.  Agriculture sector in India is marked by such unemployment.

Factors behind unemployment and under-employment conditions in India:

  • Failure of industrial sector to absorb workforce. Indian industrial sector is capital intensive and less labor intensive. Unlike other developed countries, India failed to make a transition from  agrarian economy to industrial economy and is directly making a shift to service economy.
  • Skill mismatch and underskilled population. Quality of education and skill development is poor in Indian institutions which affect the employability of the youth.
  • Agriculture has become over-crowded and burgeoning population has no other alternatives as well.
  • With liberalization, there is an increasing casualization of the workforce and it is also leading to increase in incidences of under-employment and disguised employment.
  • Poor infrastructure and incentive also deter people from going into self-employment. There is an acute shortage of vocational courses and government support. Access to credit is difficult to start a new venture.


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