Question

Critically comment on the quality of growth that the Indian economy has experienced in recent decades. What has been the implication of this growth phenomenon for employment and real wages? Can we call this growth lopsided?

Answer 1

Indian economy is a developing mixed economy. By purchasing power parity the nation is the third largest and by nominal GDP seventh largest economy global wide. The per capital GDP of the nation in year 2018 ranked 139th with $2,134. The service sector of the economy is growing fast since 2001 with an annual growth rate above 9% that contributed in year 2012–13 nearly 57% of GDP. However the agricultural sector has declined its contribution in GDP.

In India the unemployment is characterised by disguised unemployment. The schemes by government has sent millions of unskilled and poor people into urban areas in an attempt to search for livelihood by providing financial assistance for starting businesses, setting up public sector enterprises, honing skills, government reservations etc. Due to the decline in public sector's role after liberalisation there is a fall in organised employment. But for the last decade and a half, despite growing at more than 7% the country could not generate enough employment. During the period 2013–14 to 2015–16 there was an absolute fall in employment. The real wage in the nation had almost doubled between 1993-94 and 2011-12.

The economic growth in country can be considered lop-sided wherein the clusters of activities in economy are concentrated in a few highly dense megacities. The high proportion population segment lack formal social security cover, and is facing the persistent chronic deprivation