The Growth Employment Paradox and How to Address it

India remains the fastest growing major economy in the world, but open unemployment is also growing rapidly. Besides, India’s huge poorly educated, low skilled workforce cannot be transformed overnight. This article first describes some blind spots in the PLFS data which may be underestimating the extent of underemployment but also underestimating the employment of temporarily migrant workers. It then goes on to suggest a three pillar strategy to address India’s employment challenge. It consists of incentives to strengthen growth of a select group of large, employment intensive industries and services outside agriculture; incentives to promote irrigation, R&D and high value added production to raise agricultural productivity and a massive skilling program, with employers – who know the skill gaps – in the driver’s seat, to produce a high skill, high productivity Indian workforce of the future over the medium-to-long term.