The fact, as has
become clear, is that while economic liberalisation pushed up the growth rate,
it did not achieve as much in reversing the secular decline in the employment
rate output since the early 1970s. Going by estimates provided by T S Papola and Partha Pratim Sahu in a paper done for the
Indian Council of Social Science Research, the average annual employment growth
was about 2.4% in the 1970s. In the 1993-94 to 2009-10 period, it averaged
around 1.65%. According to National Sample Survey Office (NSSO) data, the
employment rate has actually declined in the five-year period ended 2009-10 to
39.2% from 42% in 2004-05. In fact, the latest available employment rate is
actually lower than the 39.7% reported in 1999-2000 by NSSO.
The first stint of the
Congress-led United Progressive Alliance (UPA) generated a mere 400,000 jobs a
year, compared with 12 m jobs annually during the tenure of the Bharatiya
Janata Party (BJP)-led coalition, the National Democratic Alliance (NDA).
During the period 2004-05 to 2009-10, growth in the economy averaged 8.43%,
delivering the politically uncomfortable message: jobless growth. The one major
change during the UPA regime was the huge transfer of resources to rural
welfare schemes, especially NREGA and farm loan waivers. The one thing NREGA
did for sure is create a wage-price spiral. It pushed more farmers to opt for
farm mechanisation. But it did little for job creation.
These employment
statistics do point to a bigger picture. There is a need to recognise the fact
that without changes in the economic structure, growth does not guarantee jobs.
Inclusive growth is not about cash transfers or job guarantees for unproductive
jobs. Instead, it is about ensuring that the growth process itself absorbs more
workers in productive jobs.
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