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Employment Growth and Industrial Policy: The Challenge for Indian States

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  • Jayan Jose Thomas

    (Indian Institute of Technology Delhi)

Abstract

The nature of and the future potential for economic growth will vary across Indian States because of their differences in the rates of demographic transitions. The growing population of the young in some of the States in the east and north of the country, notably Bihar and Uttar Pradesh, opens up a huge economic opportunity. It is also a serious policy challenge—to create new opportunities that meet the rising expectations of the job aspirants. At the same time, for States such as Kerala and Tamil Nadu, which have an ageing population, there are limits to future growth based on labour-intensive sectors. Across Indian States, during the period between 2005 and 2018, labour absorption into industry, construction and services lagged way behind the increase in the potential supply of workers into these sectors. The mismatch between labour demand and potential labour supply widened after 2012, leading to an increase in unemployment rates and a large-scale withdrawal of women from the labour market. For reviving employment growth, India requires a mix of social, employment and industrial policies. The States should have greater financial and functional autonomy to implement these policies in a way that suit their specific stages of development.

Suggested Citation

  • Jayan Jose Thomas, 2023. "Employment Growth and Industrial Policy: The Challenge for Indian States," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 66(1), pages 113-129, March.
    • Handle: RePEc:spr:ijlaec:v:66:y:2023:i:1:d:10.1007_s41027-022-00423-4
    DOI: 10.1007/s41027-022-00423-4
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    References listed on IDEAS

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    1. Alakh N. Sharma, 2022. "Youth Employment and Unemployment in India: Issues and Challenges," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 65(2), pages 237-267, June.
    2. Ghose, Ajit K., 2016. "India Employment Report 2016: Challenges and the Imperative of Manufacturing-Led Growth," OUP Catalogue, Oxford University Press, number 9780199472574.
    3. Amit Basole, 2022. "Structural Transformation and Employment Generation in India: Past Performance and the Way Forward," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 65(2), pages 295-320, June.
    4. Nayyar, Deepak, 2013. "Catch Up: Developing Countries in the World Economy," OUP Catalogue, Oxford University Press, number 9780199652983.
    5. Jayan Jose Thomas & M. P. Jayesh, 2016. "Changes in India's Rural Labour Market in the 2000s: Evidence from the Census of India and the National Sample Survey," Journal, Review of Agrarian Studies, vol. 6(1), pages 81-115, January-J.
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