“Economic growth in the recent past has been led by increase in labour productivity.” Explain this statement. Suggest the growth pattern that will lead to creation of more jobs without compromising labour productivity.

India's recent growth has been driven substantially by rising labour productivity, more output per worker, rather than by a proportionate expansion of employment. This helps explain the paradox of jobless or job-light growth alongside a healthy GDP.

Explaining the statement

• Productivity rose through capital deepening, automation, technology adoption and a shift toward capital-intensive, high-value services and organised manufacturing.
• Growth thus came largely from existing workers producing more, not from many more workers being absorbed, leaving the employment elasticity of growth low.
• A large workforce remains stuck in low-productivity agriculture and the informal sector, while high-productivity sectors like IT and organised industry employ relatively few.
• Rising output with stagnant job creation widens inequality and leaves demographic-dividend potential underused.

A growth pattern that creates jobs without sacrificing productivity

• Promote labour-intensive sectors: textiles, leather, gems and jewellery, food processing, construction, tourism and MSMEs that generate mass employment.
• Strengthen manufacturing: use Production Linked Incentive schemes and Make in India to build labour-absorbing value chains and reverse premature deindustrialisation.
• Invest in human capital: skilling, apprenticeship and quality education raise employability so productivity and jobs rise together.
• Tap the care and green economy: renewables, care work, and rural and urban infrastructure create jobs with rising output.
• Ease formalisation: smooth labour-code implementation, credit, and market access for MSMEs to convert informal work into productive formal jobs.
• Shift surplus farm labour: move underemployed agricultural workers into agro-processing, allied activities and rural non-farm enterprise where productivity is higher.

The goal is productive employment, growth that raises both output per worker and the number of decent, well-paid jobs. This is achieved not by resisting technology but by balancing its adoption with labour-intensive expansion, structural transformation of the workforce, and continuous skilling so that India can harvest its demographic dividend.