SECTION B
Essay
125 marks
Near jobless growth in India: An anomaly or an outcome of economic reforms.
WRITE IN
90 min
1,000–1,200 words
Reading the topic
The topic asks whether India's growth with weak job creation is an accident or a result of its reform path. The examiner expects analysis of how growth led by services and capital-intensive sectors bypassed labour-intensive manufacturing, why agriculture still holds surplus workers, and how reforms and labour laws shaped this.
ThesisIndia's weak job creation is less an anomaly than an outcome of a reform path that favoured skill- and capital-intensive sectors without building labour-intensive manufacturing.
Dimensions to cover
- 1Structure: services and capital-heavy industries grew fastest but employ relatively few low-skilled workers
- 2Manufacturing: India's manufacturing share of GDP has stayed modest, unlike East Asian economies that absorbed farm labour into factories
- 3Labour laws: rigid laws and contract labour shaped firms' choices, discouraging large hiring
- 4Informality: most workers remain in informal or self-employment, so growth adds output but not decent jobs
- 5Skills and youth: educated young people face high unemployment, showing a mismatch between education and jobs
- 6Technology: automation and global supply chains make it harder for late developers to create factory jobs
Counter-view
- Some argue jobs have grown, especially self-employment, and recent surveys show falling unemployment. The essay should note this but question the quality of such jobs and their low earnings
Open and close
- Open: Open with an engineering graduate from Bihar delivering food on a two-wheeler in Gurugram, past the glass towers of firms whose revenues grew far faster than their headcount
- Close: Conclude that growth will create jobs only when policy deliberately backs labour-intensive manufacturing, skills and small firms
Where marks usually go
- Treating the question as either-or without showing how reforms shaped outcomes
- Citing unemployment rates without dates or sources
- Ignoring quality of jobs and focusing only on numbers
Examples that fit
- ThinkerDani Rodrik's work on premature deindustrialisation shows developing countries peaking in manufacturing employment at lower incomes than earlier industrialisers.Dani Rodrik, 'Premature Deindustrialization', Journal of Economic Growth, 2016
- DataThe ILO and Institute for Human Development found that youth made up most of India's unemployed, with educated youth worst affected.ILO and IHD, India Employment Report 2024
- CaseBangladesh built millions of garment jobs, many for women, showing what labour-intensive export manufacturing can do.World Bank, Bangladesh Development Update
- CurrentThe Production Linked Incentive schemes, launched from 2020, aim to boost manufacturing, though critics note many favour capital-intensive sectors.Department for Promotion of Industry and Internal Trade, PLI scheme documents
- ThinkerW. Arthur Lewis's dual-sector model explained growth through moving surplus farm labour into industry, a shift India has only partly achieved.W. Arthur Lewis, 'Economic Development with Unlimited Supplies of Labour', 1954