Employment problem in India and the phenomenon of the missing middle

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dc.contributor.authorMazumdar, Dipak
dc.contributor.authorSarkar, Sandip
dc.date.accessioned2010-11-24T14:03:07Z
dc.date.available2010-11-24T14:03:07Z
dc.date.issued2008
dc.descriptionDraft paper for the Canadian Economic Conference 2008, Vancouver June 6-8en
dc.descriptionDue to copyright restrictions, this item cannot be shareden
dc.description.abstractEconomic growth in India, which has accelerated in recent years, has been characterized by some disturbing characteristics—which seem to set the pattern out of line with international experience of sustained economic development. These include three critical ones; First, the growth process seems to have been led by the tertiary sector—both in terms of value added and employment, rather than manufacturing; Second: while the expectation in labor-abundant economy might be that the tertiary sector had disproportionately absorbed labor displaced from agriculture at low levels of earnings, the data seems to suggest that this has not been so. Earnings level in the tertiary sector has been significantly above those in manufacturing, suggesting that growth in the tertiary sector has been productivity-led rather than employment led. Third: the manufacturing sector in India has been characterized by the persistence in “dualism”. There has been a strong bi-modal distribution in employment—even when we confine our attention to the non-household sub-sector in manufacturing—with strong concentration of employment at the small and large size-groups of establishments, with a conspicuous ‘missing middle’. A related point is that the productivity (and wage) gap between the two extreme size groups is much larger in India than in even other Asian economies. It is our contention that these three phenomena are inter-related. It is the ‘dualism’ in the manufacturing sector which has slowed down the expected dynamic role of this sector in the growth of the economy. The bias towards the tertiary sector in the growth a pattern and the productivity gap in its favor can also be traced to the persistence of dualism in manufacturing. Section I of the paper documents the empirical evidence of the bias towards the tertiary sector in Indian development in the context of international experience. In section II we set out the evidence on dualism in the manufacturing sector—again stressing the extreme position of India compared top other Asian economies. Section III develops the argument as to why this type of ‘dualism’ is a problem and a drag on the growth experience. Section IV explores some hypotheses about the origins and persistence of dualism in Indian manufacturing.en
dc.formatTexten
dc.format.extent1 digital file (16p. : ill.)en
dc.identifier.urihttp://hdl.handle.net/10625/45238
dc.language.isoen
dc.subjectECONOMIC GROWTHen
dc.subjectVALUE ADDEDen
dc.subjectSMALL ENTERPRISESen
dc.subjectLARGE SCALE INDUSTRYen
dc.subjectINDUSTRIAL SECTORen
dc.subjectEMPLOYMENTen
dc.subjectLABOUR MARKETen
dc.subjectINDIAen
dc.subjectSUSTAINABLE DEVELOPMENTen
dc.titleEmployment problem in India and the phenomenon of the missing middleen
dc.typeConference Paperen
idrc.docdelivLink sent to requester : https://munkschool.utoronto.ca/downloads/pdfdoc/DualismAndEconomicGrowthInIndia.pdfen
idrc.dspace.accessIDRC Onlyen
idrc.project.componentnumber104437001
idrc.project.number104437
idrc.project.titleFormal and Informal Employment Growth in Manufacturing (India and Bangladesh)en
idrc.rims.adhocgroupIDRC SUPPORTEDen

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