economy | IST

Economy is growing but failing to add jobs, Azim Premji University’s report says

The rate of unemployment in India is at its highest in 20 years, and higher economic growth has had no corresponding increase in employment, a study conducted by the Centre for Sustainable Employment, Azim Premji University revealed.
According to the study, “Higher growth has raised aspirations of people but has failed to generate the kind of jobs that will allow people to fulfill those aspirations. A 10 percent increase in GDP now results in less than 1 percent increase in employment.”
The biggest disadvantaged are the urban, educated youth. The report said more than 60 percent of those looking for jobs are in the 15-25-years age group.
Apart from unemployment, India’s problems are also related to the quality of jobs and poor wage growth. Despite an increase in organised manufacturing, India has not seen a corresponding increase in jobs.
A lot of jobs created in the organised manufacturing space is of informal nature, says Amit Basole, lead author of the report. “Contract workers have grown since 2000s, and till 2015, in organised manufacturing, nearly 30 percent of all workers are contractual. Lack of labour reforms have somewhere given way to this.”
The report highlights that in 2015, 67 percent Indian households earned less than Rs 10,000 a month, whereas the minimum salary recommended by seventh pay commission is Rs 18,000 per month.
Adjusted for inflation, wage rates have grown in most sectors at 3 percent per year whereas the organised manufacturing has seen a mere 2 percent wage growth.
A focused National Employment Policy is required to give a ‘mission-mode’ push to job creation in the country, the report said.
“90% of industries in organised manufacturing pay wages below the CPC minimum,” Basole added.
next story

Market Movers