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Explaining the ‘jobless’ growth in Indian manufacturing

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  • Jayan Thomas

Abstract

In Indian manufacturing, which accounts for only 12.2% of the country's workforce, a few technologically advanced sectors coexist with a vast informal sector. The growth of Indian manufacturing is characterized by ‘joblessness’, and during the post-1991 years, by large yearly and industry-wise variations. While a few capital- and skill-intensive industries recorded fast rates of growth of value added, employment generation occurred largely in the unorganized sector, mainly in export-oriented industries such as garments and textiles. The frequently cited argument that the major barrier to manufacturing-employment growth in India is the ‘rigidity’ in the country's labour regulations rests on very thin empirical evidence. With the rising share of contract workers even within the organized segments of manufacturing since the 1990s, the very argument that India's labour market is rigid is questionable. Power shortages, insufficient availability of credit and the volatility in exchange rates and raw material prices are some of the important factors that constrained the growth of Indian manufacturing, especially the small-scale sector.

Suggested Citation

  • Jayan Thomas, 2013. "Explaining the ‘jobless’ growth in Indian manufacturing," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 18(4), pages 673-692.
    • Handle: RePEc:taf:rjapxx:v:18:y:2013:i:4:p:673-692
    DOI: 10.1080/13547860.2013.827462
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    References listed on IDEAS

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    1. Kochhar, Kalpana & Kumar, Utsav & Rajan, Raghuram & Subramanian, Arvind & Tokatlidis, Ioannis, 2006. "India's pattern of development: What happened, what follows?," Journal of Monetary Economics, Elsevier, vol. 53(5), pages 981-1019, July.
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    Cited by:

    1. Sandeep Kumar Kujur, 2018. "Impact of Technological Change on Employment: Evidence from the Organised Manufacturing Industry in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 61(2), pages 339-376, June.
    2. Francis Kuriakose & Deepa Kylasam Iyer, 2020. "Job Polarisation in India: Structural Causes and Policy Implications," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(2), pages 247-266, June.
    3. Ghani,Syed Ejaz & Kerr,William Robert & Segura,Alex, 2015. "Informal tradables and the employment growth of Indian manufacturing," Policy Research Working Paper Series 7206, The World Bank.
    4. Rashmi Venkatesan, 2019. "The UN Framework on Business and Human Rights: A Workers’ Rights Critique," Journal of Business Ethics, Springer, vol. 157(3), pages 635-652, July.
    5. Nithyashree, M.L. & Pal, Suresh, 2020. "Rising Capital Intensity and Employment Potential of Indian Food Processing Industry," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 0(Number 4), December.
    6. Sakshi Aggarwal & Debashis Chakraborty, 2020. "Labour Market Adjustment and Intra-Industry Trade: Empirical Results from Indian Manufacturing Sectors," Journal of South Asian Development, , vol. 15(2), pages 238-269, August.

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