Growth without good jobs

India today wears its growth numbers with confidence. GDP expansion remains among the fastest in the world, capital expenditure is rising, infrastructure creation is visible across highways, railways and urban projects, and global investors increasingly see India as a relative bright spot in a slowing world economy. In international forums, India is often cited as proof that large emerging economies can still grow at scale. Yet beneath this headline success lies a persistent weakness that economic debate too often skirts around. India’s growth story is strong, but its jobs story is not.

This is not an argument against growth. It is an argument about what kind of growth matters, and for whom. In a country where the working-age population continues to expand and millions enter the labour market each year, employment outcomes cannot be treated as a secondary benefit that will automatically follow output expansion. Employment quality must be the anchor of economic assessment, not an afterthought trailing behind GDP charts.

The core issue is not merely job creation in numerical terms, but the nature and durability of jobs being created. India has added employment in recent years, but a significant share of this expansion has been concentrated in informal, low-productivity and insecure work. Self-employment accounts for a large part of labour absorption, often reflecting limited formal opportunities rather than genuine entrepreneurial choice. Many such jobs are characterised by low and volatile incomes, little scope for skill progression, no social security and high vulnerability to economic shocks. These jobs keep people occupied, but they do not reliably lift households out of precarity.

This mismatch between output growth and labour outcomes reflects a structural feature of India’s economy. Growth has been driven disproportionately by capital-intensive and skill-intensive sectors, while the bulk of the labour force remains low-skilled or semi-skilled. Manufacturing, long expected to be the engine of mass employment, has expanded in output but not in labour absorption to the extent required. Services growth has been robust, but much of its income and productivity gains are concentrated at the top end of the skill spectrum, leaving large sections of the workforce unable to access its benefits.

As a result, India’s labour market looks active on the surface but fragile underneath. Labour force participation rates remain uneven, particularly among women. Youth unemployment and underemployment persist despite rising educational attainment, pointing to a disconnect between degrees and demand. Real wage growth has been weak for large segments of workers, especially in rural areas and informal urban employment. These are not marginal indicators or temporary distortions. They shape the everyday experience of growth for a majority of households.

The problem is reinforced by how economic success is measured and communicated. GDP offers a clean, single number, convenient for comparison and political messaging, but it says little about distribution, job security or economic mobility. When GDP becomes the dominant lens, policy incentives tilt towards capital formation, large projects and financial metrics, while labour outcomes are expected to improve indirectly. India’s experience suggests that this sequencing cannot be assumed. Growth without a deliberate employment strategy does not automatically translate into broad-based prosperity.

Employment quality matters not only for social cohesion but for economic resilience itself. Low-quality jobs suppress consumption demand, weaken household balance sheets and increase dependence on informal credit. When incomes are uncertain, households save defensively rather than spend, blunting the demand impulse that growth depends on.

 Weak job security also constrains productivity growth. Workers trapped in low-wage roles have little incentive or capacity to invest in skills, while firms operating on thin margins in informal conditions rarely invest in technology or training. The economy risks settling into a low-productivity equilibrium even as headline growth remains respectable.

There is also a political economy dimension that cannot be ignored. Persistent job insecurity erodes trust in economic narratives, particularly among younger cohorts. When growth is visible in skylines and balance sheets but not in stable livelihoods, public confidence weakens. This disconnect fuels scepticism towards reform and amplifies social tension, even in periods of macroeconomic stability.

Anchoring economic debate around employment quality requires a shift in both policy focus and institutional priorities. India must place greater emphasis on sectors that combine scale with labour absorption. Labour-intensive manufacturing, construction linked to affordable urban housing, care services, logistics and segments of the green economy offer such potential. Realising this potential, however, requires coordinated policy support, including access to land and credit, skills alignment and market linkages, rather than fragmented schemes operating in isolation.

Labour market reform must also move beyond flexibility alone. Formalisation cannot be achieved simply by easing compliance burdens if wages remain low and productivity stagnant. Workers will not move into formal employment unless it offers tangible advantages. Portable social security, predictable contracts, basic workplace protections and access to health and pension benefits are essential. Employment quality improves when formality delivers security and dignity, not just regulatory compliance.

Skill policy, too, needs recalibration. India has invested heavily in training programmes, but outcomes remain uneven. Too many initiatives prioritise certification over employability, with insufficient attention to local labour market needs. Skill development should be treated as economic infrastructure, closely linked to regional industry clusters and evolving demand, rather than as a standalone welfare intervention.

Women’s employment requires targeted and sustained attention. Low female labour participation is not only a social failure but a macroeconomic constraint. Addressing it demands investments beyond generic growth, including safe transport, childcare infrastructure, flexible work arrangements and credible enforcement of workplace protections. Unlocking women’s participation would significantly improve both employment quality and household resilience.

Finally, measurement itself must evolve. Employment surveys need to be timely, transparent and sufficiently granular. Indicators of job quality, including wages, stability, hours and access to benefits, should feature more prominently in public debate. A growth model that cannot demonstrate consistent improvement in these areas remains incomplete, regardless of its headline numbers.

India’s growth trajectory offers genuine opportunity. But growth that sidelines employment quality risks becoming brittle and socially contested. The question is not whether India is growing fast enough, but whether it is growing in a way that expands dignity, security and upward mobility for its workforce. GDP can tell us how large the economy is becoming. Employment quality tells us how sustainable that growth truly is, and who it ultimately serves.

If India wants its economic success to endure, it must put jobs, not just output, at the centre of its economic story.

The writer is a policy analyst focusing on employment, demographics, and economic development. He writes on the intersections of workforce trends, technology, and industrial policy