NEW DELHI: India’s recent economic growth has not translated into meaningful job creation, said Jayati Ghosh, professor of economics at University of Massachusetts Amherst. She said that the country’s development pattern has produced an unusual combination of high growth with weak employment generation.
“If you are growing at six to eight per cent over a long period, you should see at least some employment growth,” Ghosh said in a lecture organised by BML Munjal University. Instead, she noted that formal employment has shown little to no growth over the past decade, even during periods of relatively strong GDP expansion.
Ghosh’s remarks come amid an ongoing debate among economists about whether India’s growth has generated sufficient employment opportunities. While official data has pointed to improvements in labour force participation in recent years, concerns remain about the quality of jobs and the pace of formal employment creation.
Ghosh said employment growth remained weak even during the high-growth phase between 2011–12 and 2017–18. She added that formal employment has seen virtually no expansion between 2012 and 2023–24, while women’s paid employment declined and real wages stagnated.
This pattern, she said, makes India a global outlier. In most countries at a similar stage of development, rapid economic growth is usually accompanied by rising employment and higher participation of women in the workforce.
“When countries at our per capita income level grow this fast, you normally see more women entering the workforce,” she said, noting that India instead experienced a prolonged decline in women’s paid employment.
On recent official data pointing to rising female employment she said much of the increase reflects a surge in unpaid helpers in family enterprises rather than paid jobs.
According to the Periodic Labour Force Survey released by the Ministry of Statistics and Programme Implementation, the female labour force participation rate rose from 21.1 per cent in 2017–18 to 35.6 per cent in 2023–24. Quarterly estimates placed it at 34.9 per cent in October–December 2025, up from 33.7 per cent in the previous quarter, largely driven by higher participation among rural women.
“More than 80 per cent of the increase in women’s employment comes from unpaid helpers in family enterprises,” Ghosh said, adding that such work is not typically counted as formal employment in many countries.
India’s labour market is also dominated by informal work. More than 90 per cent of the workforce is engaged in the informal economy, which accounts for roughly half of the country’s GDP, according to government estimates.
Economists have long argued that greater participation of women in paid employment is critical for sustaining India’s economic growth. India’s female labour force participation remains among the lowest in the G20, and expanding women’s access to formal work will be key to improving productivity and long-term growth, according to a report by Axis Bank.
Ghosh argued that weak job creation stems from the concentration of economic gains among the top 10 per cent of the population. This pattern of demand, she said, limits employment generation because consumption by wealthier households tends to be more import-intensive and less labour-intensive domestically.
“When demand is concentrated in a relatively small group, you don’t get economies of scale,” she said, adding that businesses are less likely to expand production if the purchasing power of the broader population does not grow.
Source: Business Standard
