1) Low Employment Elasticity of Growth

• Employment elasticity has steadily declined from ~0.4 in the 1990s to less than 0.2 in the 2000s.
• Example: Between 2004–05 and 2011–12, GDP grew at ~8%, but employment increased by only 1.4% annually (NSSO data).

2) Service-led Growth

•  India’s growth is dominated by the services sector, contributing ~55% of GDP, but employing only ~28% of the workforce.
• IT, finance, and communication are skill-intensive and create limited jobs compared to their output.

3) Stagnation in Manufacturing

• The manufacturing sector—traditionally labour-absorbing—has underperformed.
• Despite programmes like Make in India, the sector’s share in GDP remains ~16–17%.
• Adoption of automation and capital-intensive technologies further restricts job creation.

4) Agriculture’s Disguised Employment

• Agriculture employs ~42% of India’s workforce (PLFS 2022–23), yet contributes only ~15–16% of GDP.
• This indicates underemployment and low productivity rather than meaningful job creation.

5) Youth Unemployment & Skill Mismatch

•  Educated youth face high unemployment (16–18% among graduates as per CMIE 2023).
• Skills imparted by the education system are often misaligned with market demand.

6) Rise of Informal and Precarious Jobs

• Over 80% of jobs are in the informal sector with low wages, no social security, and high vulnerability.
•  The gig economy provides work but not stable employment.