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Generating Employment in India: A Suggestion

In: Analytical Issues in Growth & Structural Change, Macroeconomy, Security, and Sustainability of India's Economic Development

Author

Listed:
  • Ambar Ghosh

    (Jadavpur University, Economics)

  • Dipti Ghosh

    (Jadavpur University, Economics)

Abstract

Unemployment is a burning issue in India. In the post-reform period, employment had been more or less stagnant in the organized sector even though average annual growth rates of both GDP and value added of the organized sector at constant prices were quite high. Using a macro model that hopefully captures the salient features of the Indian economy, this paper suggests a way out. It derives the result that the larger the stock of infrastructure capital in the unorganized sector, the larger will be the levels of output and employment in both the sectors. It also shows that, if the government invests in infrastructure in the unorganized sector and finances it by taxing capitalists’ income, employment will go up significantly. The policy will also heap considerable benefits on the poor. However, if the government finances its investment expenditure by imposing indirect taxes, employment and output levels are likely to contract in both the sectors.

Suggested Citation

  • Ambar Ghosh & Dipti Ghosh, 2026. "Generating Employment in India: A Suggestion," India Studies in Business and Economics, in: Biswajit Chatterjee & Asim K. Karmakar (ed.), Analytical Issues in Growth & Structural Change, Macroeconomy, Security, and Sustainability of India's Economic Development, pages 89-117, Springer.
    • Handle: RePEc:spr:isbchp:978-981-95-5242-9_6
    DOI: 10.1007/978-981-95-5242-9_6
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    Keywords

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    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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