DMPQ- Explain the reasons why India’s growth is called ‘growth without employment.’

Today, employment share of three sectors of economy is roughly – industry (17%), agriculture (57%) and services (26%).

Unemployment is mainly of two types – disguised unemployment and open unemployment. Disguised unemployment is also called under-employment. It is a situation in which a person is not contributing fully to his potential for example, a task which could have been done by 2 people, is done by 3. It happens when a field is over-crowded and everyone gets something out of it instead of getting full of it. Agriculture sector in India is marked by such unemployment.

Factors behind unemployment and under-employment conditions in India:

Failure of industrial sector to absorb workforce. Indian industrial sector is capital intensive and less labor intensive. Unlike other developed countries, India failed to make a transition from agrarian economy to industrial economy and is directly making a shift to service economy.
Skill mismatch and underskilled population. Quality of education and skill development is poor in Indian institutions which affect the employability of the youth.
Agriculture has become over-crowded and burgeoning population has no other alternatives as well.
With liberalization, there is an increasing casualization of the workforce and it is also leading to increase in incidences of under-employment and disguised employment.
Poor infrastructure and incentive also deter people from going into self-employment. There is an acute shortage of vocational courses and government support. Access to credit is difficult to start a new venture.

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