Jobless Growth

The latest National Sample Survey (NSS) estimates of employment and unemployment in the country indicate that in an overall complex employment picture the rate of job creation during the years of rapid growth has been poor. The estimates in the recently released NSS report on the 64th round (2007-08) are the first ones after the UPA government took over in 2004 and the first such numbers after the last quinquennial round of 2004-05. The 2004-05 NSS survey had suggested that 12 million jobs had been created every year or a growth of 2.85% a year between 1999-2000 and 2004-05, which even exceeded the growth rate of the population. It was this high growth in employment which was reflected in the government’s first “Annual Report on Employment” released last July, when it credited itself with creating enough jobs in the economy. However, the results of the 64th round not only suggest that the high GDP growth during the 2004-07 period failed to create enough jobs, they also confirm the earlier consensus that the high growth of employment during 1999-2005 was essentially distress-driven and a result of push factors operating due to the agrarian crisis and a deceleration in real wage growth.

The latest NSS results show that the total employment created, according to the usual status, between 2005 and 2008 was only 2.4 million, which was just 0.8 million per year or a mere fraction of the 12 million created per year between 1999-2000 and 2004-05. The total number of workers increased from 457.9 million in 2004-05 to 460.2 million in 2007-08, a growth rate of just 0.17% per year as against the 2.85% per year growth rate achieved between 1999-2000 and 2004-05. This is the lowest rate of employment generation in the last three decades, even lower than the previous spell of jobless growth of 1993-2000 when employment increased by less than 1% per year.