The Great Disconnect: India’s Story of Growth without Decent Employment

There seems to be a ‘great disconnect’ between India’s remarkable growth and decent employment. In this keynote address I summarise the main features of this great disconnect that have several manifestations. These are (i) persistence of informal employment covering close to 90 percent of the workforce, (ii) low employment content of growth especially for the less educated, (iii) a slow but steady exclusion of women from the labour market, (iv) below subsistence wages for a majority of wage workers, (v) persistence of a high share of self-employment, and (vi) absence of either employment or social security for an overwhelming share of working people. The larger global context is one of an unrelenting process of ‘creative destruction’ a la Schumpeter in the advanced economies including China. Such a process in India has largely bypassed the less educated in accessing new employment. Further technological changes that are now knocking at the door in the form of frontier technologies are certain to bypass the less educated more aggressively than in the past. Will this great disconnect then become a perpetual trap in the Indian economy? Are there policy options for a more inclusive process of employment generation especially to the less educated in rural and urban areas who could also benefit by the advances in technological progress sweeping across the country. I argue for a policy shift to focus on addressing the developmental deficits mainly in rural areas while making a conscious policy choice to apply the technological advancements to benefit the hitherto neglected sectors as well as people.