[Answered] India is targeting to become a $5 trillion economy by 2025, but the past experience of jobless growth is a headache for Indian intelligentsia. In light of this, discuss various causes of jobless growth in India in past. Give some measures to create job opportunities in India.

India has grown at about 7-8 % in recent years. But data and facts shows that Indian growth was jobless and not inclusive. According to Census 2011, the average growth rate of the economy was 7.7 per cent per annum, when it was only 1.8 per cent for employment. 66th round of the National Sample Survey Office (NSSO) data on employment in 2011 revealed that between 2004-05 and 2009-10, only 1 million jobs were added per year; in a period when the economy averaged a record 8.43% growth annually.

Reasons behind the Jobless growth:

1. Service sector driven growth- The biggest employer in India is the Agriculture sector, employing 45% of the population but it contributes only 15% to the GDP, whereas Service sector is the biggest contributor to the GDP but employs less than 30%. IT and Financial services are drivers of service sector growth in last 2 decades however both of these sector are not employment intensive. This is contributing to jobless growth in India.
2. Failure of manufacturing sector- Manufacturing sector is labour–intensive. But it did not become the engine of growth in India. Rather the knowledge-intensive services sector which is less labour intensive along with some other segments of capital intensive manufacturing was the engines of growth in India. These sectors did not lead to much employment generation.
3. India’s focus on higher education- Since the second five-year plan India has focussed more on higher education rather than basic education.  We failed to create enough basic skilled workforce required for labour-intensive manufacturing. Thus, contribution of less labour intensive service sector increased significantly in India’s GDP.
4. Import-oriented economy- Excessive imports have been damaging Indian manufacturing industry. India has failed to witness a strong growth in the labour-intensive segment of the manufacturing sector, as it did not move from the import to an export-oriented development strategy. If India had followed Labour intensive goods export-led model like Southeast Asian countries, it would have created many jobs in the MSME sector.
5. Stagnation in manufacturing output and employment contraction- Less jobs were created due to stagnant manufacturing output and contraction of labour-intensive segment of the formal manufacturing sector. This is due to excessive rigidity in the manufacturing labour market andrigid labour regulations has created disincentives for employers to create jobs. According to world bank study Industrial Disputes Act has lowered employment in organised manufacturing by about 25%.
6. Automation- The nature of Indian manufacturing is not employment-friendly. Most of them are automated and any employment is highly skilled. Thus it has contribute to growth, and not generated much employment.
7. Infrastructure Bottlenecks– Infrastructural bottlenecks (especially in access to electricity), lack of backward and forward linkages between agriculture, industry and service sector has failed to create jobs and also hindered growth of labour intensive sectors.
8. MSME problems– The labour intensity of MSME is four times higher than that of large firms. But they face many problems. They have poor access to credit and are plagued by many serious problems which has limited there growth potential.
9. Skill Mismatch- Indian labour is not skilled as per industrial demands. Lesser skill levels of workers limit them the job opportunities. Also various programs by government like Skill India and stand up India are launched recently only. Industry focussed skills are needed to be inculcated.

Some measures to increase jobs and employment-

1. Labour reforms- Labour Laws should be reformed as due to the stringent Labour Laws Corporates  in India are preferring Capital intensive mode of Production in a country where labour is abundant.
2. Strengthen education system- The education system needs to be revamped to create the desired skill-sets. At present, the education system is failing in delivering. Thus a closure look at education system is needed with emphasis on skills and basics.
3. Promoting labour Intensive sectors– Labour intensive sectors like food processing industry, leather industry, apparel, electronics, gems and jewellery, financial services, and tourism etc. should be encouraged. Appropriate subsidies and tax incentives should be given to incentivise them. Make in India initiative a great step forward which will boost the manufacturing.
4. Strengthening MSME- MSME sector should be promoted and supported. Easing regulations, subsidies will help. Also easy available of credit should be the priority. MUDRA has a potential to create required jobs in India.
5. Implementing Niti Ayog action agenda– The Action Agenda has provided several good ideas for job creation, including labour law reforms at the state level. The report emphasizes the role of exports in job creation and recommends establishing coastal employment zones (CEZs), similar to China’s special economic zones (SEZs). This agenda must be implemented in letter and spirit.
6. Entrepreneurship- The focus of economic policy must be on creating an enabling policy for youth to take up entrepreneurship and create more jobs in the market. India does not need five companies worth 5000 crores turnover but needs 5000 companies of 5 crore turnover.

With higher growth rates not having translated into more jobs, the government should formulate a National Employment Policy that takes these trends into account. Expansion of public employment and a national skilling programme could boost employment.