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Despite economic boom, India's job growth has shrunk

Raising questions over the government's slogan of inclusive growth, an official report has said the rate at which new jobs were added to India's labour force had declined between 1993 and 2005 despite an economic boom. The annual growth rate of employment declined to 1.85 percent from 2.03 percent between 1993 and 2005 despite higher aggregate growth, said the report released here by the National Commission for Enterprises in the Unorganised Sector.

'The net growth in employment has also been mostly of an informal kind,' the commission said in the report titled: 'Challenges of Employment in India: An Informal Economy Perspective'. 'The national agenda of inclusion would be deficient were it not to provide a life of dignity and security to the poor and vulnerable in India, constituting over 75 percent of the population. Employment, then, becomes the central objective.'

Equally alarming was the finding that the growth rate of wages under all categories of workers, including casual labourers, also declined during the period under review. 'Instead of creating a level playing field, policies have focused on creating special playing fields for large corporate entities, undermining micro and small enterprises that provide productive employment to the growing labour force,' it said.

'Informal sector lacks access to credit, technology, marketing, skills and incentives,' said the commission, which was set up in September 2004 to review the status of employment in India's unorganised or informal sector.

This section of the labour force constitutes a whopping 93 percent of India's labour force, which is estimated at 538 million as in 2007, equalling the country's entire population in 1971.

The commission also said that the share of government and public sector in the country's total workforce declined from 5.4 percent in 1983 to 3.9 percent in 2005, while it shrank from 2.5 percent to just 1.8 percent for private sector.

'Despite the private sector constituting merely 2 percent of the workforce, it receives inordinate attention and preferred treatment,' says the commission, listing the incentives as cheap credit, access to overseas funds and export sops.

'Instead of bailing out big companies, the government should now shift attention to more local markets and rural areas,' K.P. Kannan, member of the commission, told IANS, soon after presenting the report to Prime Minister Manmohan Singh.

'If the current trends continue, the comparative deficit in education and skills in regions of the country that will contribute to a major part of the growth of the labour force will be even more glaring in the future,' Kannan added.

Looking ahead, the commission has projected the country's labour force at 502 million by 2012 and 551 million by 2017 - a number that is greater than the country's population of 548 million in 1971.

It, accordingly, says that were the Indian economy to grow at 9 percent per annum during the period, some 488 million jobs will be created, leaving an unemployment level of 2.5 percent by 2012.

But if the economy grows at just 5 percent during the period, job creation will be around 465 million, leaving an unemployment level of a little over 7 percent.

Nevertheless, it says that if the economy expands by 9 percent per annum, there would be no unemployment by 2017. But on the flip side, if economic growth is just 5 percent, the unemployment level will be over 10 percent. (IANS)

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