EMPLOYMENT INTENSITY OF SECONDARY SECTOR IN INDIA: TRENDS, PATTERNS AND DETERMINANTS

Expansion of the secondary sector in India is marked by the inability to achieve prolonged spells of its rapid growth, though it has shown relatively stable employment elasticity. The analysis of the nature of employment growth with output growth in the sub-sectors indicates that while historically India’s secondary sector employment was driven by manufacturing sector, in recent years, it is the phenomenal rise in construction sector that is contributing considerably towards employment creation. Negative employment elasticity in this sub-sector may, however, indicate very low labour productivity leading to poor quality of employment. There has been destruction of productive jobs in organised manufacturing as the informal employment is on the rise. The study identifies labour productivity, GDP growth, share of services to GDP, investment and foreign trade as the macroeconomic factors determining employment intensity of the secondary sector in India.