The failed promise of employment C. P. Chandrasekhar

As election 2019 approaches, the Modi government, damaged by agrarian distress, is also being challenged by evidence that its record on employment generation has been extremely poor. To recall, in its campaign during the 2014 election which brought it back to power, the BJP-led National Democratic Alliance (NDA) promised to create 10 million jobs every year. The best source of information on employment we currently have is the privately conducted (and heavily priced) Consumer Pyramids Household Survey undertaken by the Centre for Monitoring the Indian Economy (CMIE). These figures are available from 2016 from a sample of more than 170,000…

A Curious Divergence C.P. Chandrasekhar and Jayati Ghosh

As is widely recognised, India’s economic growth since the 1990s has largely been on account of an expansion of the services sector, in which exports are seen as having played an important role. The rise in the share of services in GDP was particularly sharp after 1996-97 amounting to 6.8 percentage points over the subsequent ten years as compared with just 1.9 percentage points during the previous ten years. In the event, services as a group came to dominate the Indian economy, accounting for more than half its GDP. The official Economic Survey 2013-14 noted that: "India has the second…

India’s Electronics Manufacturing Sector: Getting the Diagnosis Right Smitha Francis

The Indian government has announced several policy measures aimed at promoting domestic electronics manufacturing as part of its “Make in India” initiative (2014). A casualty of incoherent policy regimes for nearly three decades, the electronics industry appears to be receiving some focused attention. The efforts began after the National Policy on Electronics (NPE), drafted by the Department of Electronics and Information Technology (Deity) in 2012, highlighted the abysmally low level of value addition in domestically produced electronic products, which ranged just between 5% and 10% in most cases at the time (NPE 2012). Instead, electronics manufacturers appear to prefer importing…

Changes in the Structure of Employment in India Yoshifumi Usami and Vikas Rawal

Slow growth of employment has been a remarkable feature of economic change in India during the post-liberalisation period. Economic growth over this period has been highly uneven across different sectors and regions. The rate of growth of agriculture and manufacturing sectors has been sluggish for most part of the postliberalisation period. Growth, even in periods during which it increased, was driven primarily by the service sector. It has been primarily located in urban, particularly metropolitan, areas. Trade and foreign investment have played only a marginal role as drivers of economic expansion. Benefits of economic growth have accrued differently across classes,…

Factory workers in India C. P. Chandrasekhar and Jayati Ghosh

Recent data from the Annual Survey of Industries, covering up to 2015-16, provide some interesting insights into the changing nature of industrial employment in India. In the decade up to 2015-16, there was a significant increase in the number of factory workers, by around 40 per cent. This expansion can be dated from around 2005-06 onwards and especially up to 2011-12. This is to be expected, given that that was the period of India’s economic boom, in which both construction and manufacturing industry showed higher rates of investment and output growth. While the aggregate numbers still remain low for an…

Evolution of Technology in the Digital Arena: Theories, firm-level strategies and state policies Smitha Francis

This paper analyses the evolution of technology, encompassing the characteristics and dynamics of innovation and technological change, as well as their interactions and interrelations across diverse technical areas that generate organisational changes and systemic socio-economic changes. It provides a brief overview of the various theoretical approaches that have examined technological evolution at different analytical levels, which is followed by a detailed discussion of Carlota Perez‟s techno-economic paradigm. Evolution_Technology (Download the full text in PDF format) (This study was commissioned by the Centre for WTO Studies (CWS), IIFT, New Delhi,  and carried out by the author as an independent consultant)

The So-called “Consumers’ Interest” Prabhat Patnaik

In the wake of the take-over of Flipkart by Walmart, one is once again hearing an argument which one has often come across before, namely that having a large multinational in this sphere, which can do global sourcing for its products, will make goods cheaper for buyers and therefore be in the “consumers’ interests”. This argument is so old that it even goes back to the colonial times, when it was argued by many that imports from Britain, which had caused domestic deindustrialization by outcompeting the local craftsmen, had cheapened goods for the consumers and were therefore in the “consumers’…

Technological Change and Impoverishment Prabhat Patnaik

The fact that the socio-economic effects of technological change depend upon the property relations within which such change occurs is obvious but often not appreciated. Consider a simple example. Suppose on a certain area 100 labourers were engaged for harvesting the crop at a total cost of Rs.5000; but the capitalist-landlord decides to use a harvester combine instead. Then the labourers’ income goes down by Rs.5000. The capitalist-landlord’s wage-cost goes down by Rs.5000, which accrues therefore as an addition to his profits. But suppose the harvester combine were to be owned by a collective of the workers. Then they can…

Indian IT hits a Speed Dump C. P. Chandrasekhar and Jayati Ghosh

A sharp deceleration in growth and restricted employment expansion in the IT sector, India’s post-liberalisation showpiece, has implications beyond the industry’s boundaries. Indian_IT_Speedbump (Download the full text in PDF format) (This article was originally posted in the Business Line on November 20, 2017.)

Why workers lose C.P. Chandrasekhar

A long-acknowledged feature of global development since the 1970s is that in many countries—advanced and poor—those at the bottom of the income pyramid have benefited little, if at all, from whatever growth has occurred. One empirical outcome of that tendency has been a decline in the shares of labour in national income over time. While this has been noted earlier, it has become the focus of attention recently because of evidence of a popular backlash against globalisation as reflected in the Brexit vote in the United Kingdom, the Donald Trump victory in the United States, and the rise of Far-Right…