This paper argues that despite the fact that informality in work has barely declined in the last two decades since India's GDP growth rate increased sharply, other favourable labour market developments have been afoot that bode well. Since 2004-05 the structural shifts in employment, significant increase in rural wages, increase in per capita consumption expenditure and therefore a sharp decline in absolute numbers of the poor as demonstrated by the National Sample Surveys of 2009-10 and 2011-12 have initiated an underlying process that has promoted inclusive growth. Post 2004-05, when a revis
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This paper argues that despite the fact that informality in work has barely declined in the last two decades since India's GDP growth rate increased sharply, other favourable labour market developments have been afoot that bode well. Since 2004-05 the structural shifts in employment, significant increase in rural wages, increase in per capita consumption expenditure and therefore a sharp decline in absolute numbers of the poor as demonstrated by the National Sample Surveys of 2009-10 and 2011-12 have initiated an underlying process that has promoted inclusive growth. Post 2004-05, when a revised national (Tendulkar) poverty line raised the absolute and relative poverty estimates, the absolute number of poor fell from 407 million in 2004-05 to 356 million in 2009-101 and further to 269 million in 2011-12 (a total fall of 138 million). What is of concern is that there is a diverging trend between the structure of output and the structure of employment in the last decade, with non-agri employment growth slowing down post-2012, even though GDP growth remained high (though slowing since 2018). This paper is organized as follows: Section 1: Explains the very high share of informal workers in India's workforce. Section 2: Attempts to explain the employment trends in the labour market: men or women; the self-employed, casual or regular workers; the organized or the unorganized segment workers, especially in the non-agricultural sectors. But more importantly, it notes that a number of positive developments have occurred in India's labour market, which have tended to mitigate the widespread and chronic effects of informality. Section 3: Concludes.
Published abstract.
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