Which of the following best captures the structural reasons behind the phenomenon of 'jobless growth' in India, particularly in the post-1991 reform period?
Show answer & explanation
Correct answer: C
Explanation
Solution: The correct answer is A growth model led by capital-intensive and service sectors with limited employment elasticity.
Explanation:
☛ 'Jobless growth' refers to an economic condition where gross domestic product (GDP) grows, but the rate of employment generation remains stagnant or falls behind.
☛ In post-1991 India, economic growth was primarily driven by the services sector (like IT, telecommunications, financial services) and capital-intensive manufacturing, rather than labor-intensive manufacturing.
☛ Employment elasticity (the percentage change in employment associated with a 1% change in GDP) declined sharply across major sectors during this period.
☛ India experienced a structural transition skipping the traditional phase of manufacturing-led labor absorption, moving directly from agriculture to high-skill services.
Extra Exam-Relevant Facts:
☛ Employment Elasticity: A measure that reflects the responsiveness of employment generation to economic growth; a low or declining elasticity indicates jobless growth.
☛ Structural Transformation Theory: Put forward by economists like Arthur Lewis and Simon Kuznets, stating that labor should transition from low-productivity agriculture to labor-intensive secondary sectors.
☛ Unorganized/Informal Sector: Over 80% of India's total workforce remains employed in the informal sector, which lacks social security and job stability.
☛ Periodic Labour Force Survey (PLFS): Released by the National Statistical Office (NSO) under MoSPI to measure key employment and unemployment indicators annually.
Important One-Liners for Upcoming Exams:
☛ Which term describes economic growth occurring without a corresponding increase in jobs? → Jobless Growth
☛ What measures the responsiveness of employment growth to GDP growth? → Employment Elasticity
☛ Which sector contributes the highest share to India's GDP? → Services Sector (Tertiary Sector)
☛ Which agency conducts the Periodic Labour Force Survey (PLFS) in India? → National Statistical Office (NSO)
☛ Which curve illustrates the relationship between economic inequality and economic growth over time? → Kuznets Curve