Is growth improving employment quality in India? Evidence of widening subnational inequality

Abstract

One of the biggest challenges faced by India today is to generate quality employment. Even in areas of rapid per capita income growth, typified by the Gujarat model of neoliberal state-sponsored technological development, there is a substantial and increasing decent work deficit. Across India more generally, the decent work deficit is, in fact, growing along several dimensions, leading to ‘growth without development’ or ‘non-inclusive growth’. This article analyses quality of employment in India across subnational spaces – among states and between rural and urban locations – using three International Labour Organisation decent work dimensions: ‘employment opportunity’, ‘social security benefits’ and ‘social dialogue’. The analysis is based on published government data, for the period 1993–1994 to 2011–2012 – the period covered by the liberalisation experiment. The conclusion is that economic growth has not contributed significantly to employment quality. Although employment opportunity is significantly higher in the developed states, coverage of social security benefits and scope for social dialogue among regular salaried/wage workers are significantly less in these areas than in underdeveloped regions. Indeed, employment opportunity is significantly higher in rural areas, and the condition of workers in urban areas is not significantly better than in rural locations. Furthermore, over time, the difference in quality of employment across subnational spaces has either increased or remained stagnant.

JEL Codes: J00, J81, J21, 018.