The two important indicators of structural transformation in any economy are rates of growth and changes in the structural composition of output and the workforce. India has experienced fairly consistent changes in the first indicator, especially after the 1991 reforms, but the trend in employment has not revealed any consistent or clear pattern. Though the Periodic Labour Force Survey (PLFS) shows increment in worker to population ratio and narrowing of the gender gap in employment in recent past, the unemployment scenario of India still remains disappointing.
The growth rate of the economy (measured by Gross Value Added (GVA) at constant prices) accelerated from 4.27% in the 20 years before the economic reforms to 6.34% in the 20 years following the reforms and to 6.58% between 2010-11 and 2019-20 at 2011-12 prices. This growth trajectory was accompanied by a steady decline in the share of agriculture from 30% in 1990-91 to 18% in 2019-20 and a steady increase in the share of non-agriculture output in total economic output.
Steps Can Be Taken
- The rising share of industry and services in national income without a sizable increase in employment puts a serious question mark on the relevance of conventional models of economic growth and development. Perhaps, there is a need to rethink the conventional economic development models and their applicability for emerging economies like India.
- An optional approach can be to rethink our strategy of striving for an industry-led growth model and explore a more relevant agri-centric model of economic transformation to create more attractive, more remunerative and more satisfying employment in and around agriculture.
- Generating Employment in Manufacturing and Services: There is also an urgent need to generate much more employment in the manufacturing and services sector compared to the number of jobs they have offered in the recent past.
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