[Answered] Examine the paradox of ‘visible progress and invisible exclusion’ in India’s economic trajectory. Analyze whether a growth model prioritized on ‘clinical efficiency’ is structurally marginalizing the labor force, and evaluate strategies required to ensure truly inclusive and job-led development.

Introduction

India’s 7% growth, record capex and Digital Public Infrastructure contrast sharply with persistent informality, a youth NEET rate near 25%, and widening wage–productivity gaps, revealing a paradox of progress without inclusion.

Visible Progress: The Architecture of ‘Clinical Efficiency’

Capital-Intensive Growth and Technological Precision

1. India’s post-pandemic growth model prioritises capital formation as the organising principle of fiscal policy.
2. Public capex has risen from about 12% of total expenditure in 2020–21 to over 22% by 2026–27, aligned with infrastructure-led productivity gains.
3. Digital Public Infrastructure—Aadhaar, UPI, ONDC—and AI-enabled governance have delivered ‘frictionless efficiency’ in service delivery, tax compliance and financial inclusion, reinforcing macro-stability and ease of doing business.

Industrial Policy Bias toward Automation

1. Production Linked Incentive (PLI) schemes in electronics, semiconductors and pharmaceuticals have boosted output and exports, but these sectors are inherently capital- and technology-intensive.
2. As the ILO (Global Employment Trends) notes, such sectors exhibit low employment elasticity, generating fewer jobs per unit of investment compared to textiles, food processing or leather.

Invisible Exclusion: Labour at the Margins of Growth

Jobless Growth and Weak Employment Elasticity

1. Despite high GDP growth, labour absorption remains sluggish. CMIE and PLFS data show that construction employment elasticity declined from 0.59 (2011–19) to about 0.42 post-COVID, even as infrastructure spending peaked.
2. Simultaneously, agriculture has reabsorbed labour, with employment elasticity rising to over 1.5—signalling distress-driven fallback rather than structural transformation, contrary to Lewis and Kuznets models of development.

Informality, Gig Work and Social Security Deficits

1. Formalisation through GST and digital compliance has often squeezed labour-intensive MSMEs, pushing workers into informal self-employment or the gig economy.
2. Platform work offers flexibility but lacks pensions, health insurance and wage security, rendering labour ‘statistically efficient but socially invisible’, as noted in NITI Aayog’s gig economy reports.

Wage–Productivity Divergence

1. Annual Survey of Industries data reveal that net value added per worker has grown much faster than average emoluments.
2. Efficiency gains from infrastructure and automation are captured as profits rather than labour income, exacerbating inequality and constraining mass consumption demand.

Is ‘Clinical Efficiency’ Structurally Marginalising Labour?

Growth without Breathing Employment

1. The current model treats employment as a residual outcome of growth, not a co-equal policy objective.
2. As Amartya Sen argues, development divorced from livelihoods undermines capability expansion.
3. Persistently high NEET rates among youth (15–29 years) indicate that the demographic dividend risks turning into a demographic liability.

Towards Human-Centric and Job-Led Development

1. Reorienting Industrial and Fiscal Incentives: India must complement PLI with Employment-Linked Incentives (ELI) to reward firms that generate quality jobs.  Labour-intensive sectors—textiles, food processing, tourism—require targeted credit, technology upgradation and export support, as seen in Vietnam’s manufacturing-led employment strategy.
2. MSME and Agro-Processing Revival: Strengthening MSME clusters through easier compliance, patient capital and logistics integration can raise labour absorption. Agro-processing and allied activities can create non-farm rural employment, aligning with the World Bank’s ‘farm-to-firm’ transition framework.
3. Investing in the Care and Green Economy: Health, education, childcare, eldercare and climate-resilient infrastructure are inherently labour-intensive and generate a ‘social wage’. OECD evidence shows such sectors combine inclusion with productivity spillovers.
4. Skill–Technology Alignment: Skilling must move beyond certification to firm-linked apprenticeships, as recommended by the Economic Survey, ensuring youth are employable in Industry 4.0 without excluding the semi-skilled.

Conclusion

As Mahatma Gandhi warned against growth without employment, India must align efficiency with dignity of work; only labour-centred development can convert headline growth into ‘Viksit Bharat’, echoing UN SDG-8.