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Employment Growth during the Post-Reform Period

The employment performance of the Indian economy during the post-reform period has been a subject of debate and controversy for various reasons. The admirers and detractors of economic reforms had projected different employment scenarios following reforms and have interpreted the emerging employment situation by using their own different prisms. Nevertheless, it is a fact that employment growth has slowed down during the post-reform period and has decelerated with a progressive acceleration in the rate of growth of GDP. The most intriguing part of the employment growth story during the post-reform period has been a virtual stagnation in employment during the period 2004-05 to 2009-10. This period is also noted for the highest-ever GDP growth of over 9 per cent per annum, a reversal of the declining trend in organised sector employment, and a significant increase in both the ‘regular’ worker category, and in the real earnings of workers. A significant part of the increase in the participation rate in 2004-05 was distress-driven and occurred in employments of poor quality. This, however, needs to be examined further. A rebalancing of the economy with an emphasis on the growth of the manufacturing industry and greater domestic orientation appears to be necessary to ensure employment-oriented growth.

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