Good evening!

Today, I will be speaking against the motion “India is facing severe jobless growth”-
which means that I will be downplaying and perhaps refuting the premise that the jobless growth we
are facing is a severe problem. The premise that we are facing a jobless growth is derived from the
fact that despite our economy growing consistently every year, with our growth rate rising from
4.5% in 1970 to the most recent growth rate of 8.2% from the month of April-June, the elasticity of
employment has reduced from 0.40 in 1999 to 0.02 in 2014. What does that mean? It basically
implies that economic growth brings less than commensurate growth in employment. What makes
the problems that India faces in comparison to other countries unique is that we had made the jump
from an agricultural to a service dominated economy without becoming a manufacturing
powerhouse- a traditional route taken by the UK, Germany, US, Japan, and China. This means that
excess labour that normally moves from farms to factories is now moving towards service jobs.
However, there is no demand to meet this large supply. This results in swathes of people moving
into unskilled work. This is precisely the phenomenon that has led to a rise in employment in
platform economy jobs such as that of an Ola or Uber driver.

Despite the rise in growth, why has employment remained stagnant? After all, growth is determined
by increase in inputs such as labour or capital. The question moves to why there hasn’t been growth
in the manufacturing sector. The answer to that lies in the fact that there have always been rigid
labour laws. The industries disputes act is said to have reduced employment in manufacturing
organisations by 25%. This is exactly the sort of difficulties that have only given a boost to capital
intensive methods of manufacturing, completely counter productive to a country where anywhere
between 4.75-12 million people enter the workforce every year. So how do we tackle falling
employee elasticity?

Firstly, we should accept that India has missed the manufacturing train. We cannot make do with
large scale low-end manufacturing. However, changing labour laws to be less stringent and smarter
can allow us to capture industries leaving China such as the making of apparels, as even a
hypothetical 9% increase from 11-20% creates a 100 million jobs. We should create a proper
database to collect employment data every year, the last time the NSSO collected data about
employment generation was in 2012. We should promote Entrepreneurship, as mom and pop stores
are the drivers of growth and employment in a nation and already contributes 40% of manufacturing
output, it can also absorb people that are unskilled. The teaching of skills should place emphasis on
the need to know just how to adapt. The Agricultural sector should be enhanced to increase
productivity and thus reduce the out flow of labour (Institutional and Technological changes).

Why do I think the problem is not as severe? It is because the roots of the argument that we are
facing jobless growth comes from the quarterly employment survey, which is only limited to
enterprises with more than 10 jobs and in only 8 sectors. A payroll count estimated by looking at the
EPFO (employees provident fund organisation), data from the employee state insurance corporation
and the pension fund regulatory and development authority- which looks at job creation in even the
informal sector, projected 3,500,000 new jobs, as compared to the 600,000 jobs projected by the
QES. We have seen job growth in sectors that 10 years ago didn’t even exist. If the efforts to fix the
economy succeed, we will be opening up new avenues for unskilled labour. Automation will also
lead to creation of jobs the same way that new technologies like the internet had before. The
education system has changed. today government schools are performing better than private ones,
and both of them have seen an improvement in enrolment rates and results. Thus, we are seeing a
complete upheaval from the grassroots, which will only benefit us in the long-term creation of
human capital. Thank you.