The growth process has undoubtedly brought about significant changes in the structure of the Indian economy. Defying somewhat the conventional paradigm of development, the share of services had touched 51 per cent of GDP at a relatively early stage of development. However, the employment shift had lagged behind shift in output. The share of services in employment has been only around 22-25 per cent. The last decade had thus seen a decline in the aggregate sectoral employment elasticities. This is in part a reflection of increased productivity. In aggregate, the growth rate of employment had lagged behind the growth rate of labour force.
Accelerating growth is therefore central to expanding employment opportunities. We need actions both from the demand and supply sides in order to achieve higher levels of employment. Sectoral employment elasticities too have an important bearing upon the employment trends that emerge in the economy. The process of globalization and the labour laws that exist in the economy too play a very important role in determining the employment trends. Thus any programme aimed at expanding employment opportunities must focus on three factors- growth, productivity of labour and the external factors having a bearing on employment rates that exist in the economy.
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