Question

Do you think that in the last 50 years, employment generated in the country is commensurate with the growth of GDP in India? How?

Answer 1

1. Economic growth implies growth in the GDP, i.e., growth in the aggregate output produced during an accounting period within the domestic territory of an economy.
2. The increased output level is achieved by generating more employment opportunities and through employing better technology.
3. During the recent past, India has witnessed jobless economic growth that raised the aggregate output level without the proportionate rise in the employment opportunities and, consequently, unemployment continued to exist.
4. The reason is that the rise in GDP is caused by employing modern and improved technology that substituted labour for machines. This failed to generate new employment opportunities in the industrial and the tertiary sectors.
5. Thus, the industrial and the tertiary sectors failed to absorb the excess labour from the agricultural sector.
6. As a result, disguised unemployment in the agricultural sector continued along with low levels of productivity and massive poverty.
7. In addition to this, MNCs that played an important role in India’s economic growth provided employment only to the educated and specialised workforce. These MNCs aimed at achieving higher output levels by employing better technology rather than generating greater employment opportunities.

Answer 2

• During the six decades of planned development, India’s GDP grew faster than its employment.
• Not only that, but in the late 1990s, employment growth slowed even as GDP growth increased. Currently, the gap between GDP growth and employment growth has grown.
• This suggests that we can produce more goods and services without creating employment. Scholars describe this phenomenon as jobless growth. The use of new technology in production is largely responsible for the increase in joblessness.