Is India’s Economic Growth Creating Equal Opportunities?

Source – Azim Premji University

Is India's Economic Growth Creating Equal Opportunities?
Source – Azim Premji University

Azim Premji University with the Institute for What Works to Advance Gender Equality (IWWAGE) has released a report ‘State of Working India 2023: Social Identities and Labour Market Outcomes’. This report examines how the growth of the economy and structural changes have impacted the persistent social inequalities. 

India’s economic journey has had its share of successes and challenges. On the positive side, the economy has been expanding rapidly since the 1980s, leading to the migration of millions of workers away from agriculture. There’s been an increase in people having stable jobs with regular wages, while casual employment has decreased. However, the manufacturing sector has yet to grow as expected, and most new jobs are in construction and informal services. The connection between economic growth and the creation of good jobs remains weak. 

This article provides a detailed analysis of the report’s findings.

Highlights from the Report 

Upward mobility has increased 

In 2004, more than 80% of sons of casual wage workers also ended up in casual jobs, regardless of their caste. However, by 2018, this trend changed. For non-SC/ST castes, the percentage dropped from 83% to 53%, and there was an increase in obtaining better-quality work like regular salaried jobs. While this percentage also decreased for SC/ST castes, it was to a lesser extent, going from 86% to 76%.

Earnings disparities based on gender

In 2004, women in salaried jobs earned only 70% of what men earned. However, by 2017, this gap had decreased, with women earning 76% of men’s earnings. This ratio remained stable from 2017 to 2021-22.

Link between economic growth and the creation of quality jobs

Since the 1990s, the year-on-year growth of non-farm GDP and the growth of non-farm employment have not shown a strong correlation. This suggests that policies aimed at boosting economic growth may not necessarily result in the creation of more jobs. However, between 2004 and 2019, on average, economic growth did lead to the generation of decent employment. This positive trend was disrupted by the pandemic, which led to a greater increase in distress employment.

Levels of Unemployment

Following the COVID-19 pandemic, the unemployment rate is lower than what it was before the pandemic, across all educational levels. However, it still exceeds 15% for graduates, and more alarmingly, it reaches a staggering 42% for graduates under the age of 25.

Traditional gender norms influencing women’s employment

When husbands’ income rises, women are less likely to work. In urban areas, once the husband’s income surpasses ₹40,000 per month, the likelihood of wives working increases. The presence and employment status of a mother-in-law also impact married women’s employment: if the mother-in-law is present but not employed, women are 20-30% less likely to work, whereas if the mother-in-law is employed, daughters-in-law are 50-70% more likely to work.

Lower-caste entrepreneurs remain uncommon

Even in the smallest businesses, SC and ST owners are underrepresented when compared to their share in the overall workforce. More notably, SC and ST owners are almost absent in businesses with over 20 employees. Conversely, the overrepresentation of upper castes increases with business size.

India’s economic progress is evident in increased upward mobility and reduced gender-based earnings disparities, yet challenges persist in the weak link between growth and quality job creation. Gender norms continue to shape women’s employment, especially in relation to the presence and employment status of mothers-in-law. Additionally, the underrepresentation of lower-caste entrepreneurs, particularly in larger businesses, underscores the need for targeted policies. While India has made strides, addressing these challenges is crucial for a more inclusive and equitable future.

Read the full report here!

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