A new report finds that the great majority of labour in India works in one form or the other of informal employment, allowing those who pay them to dodge labour laws. In India, as elsewhere, the predominant view of policy makers is firmly rooted in the belief that the primary vehicle for creating decent employment opportunities is economic growth. Relatively high economic growth in the past decade has not, however, met these ‘trickle down’ expectations. Very few jobs have been added, mostly of low quality, whereas employment opportunities in public enterprises, the formal private sector, and agriculture have actually declined. While Gross Domestic Product growth in the past two decades accelerated to 7.52% per annum, employment growth during this period was just 1.5%, below the long-term employment growth of 2% per annum, over the four decades since 1972. Just 2.7 million jobs were added in the period from 2004-2005 to 2009-2010, compared to over 60 million during the previous five-year period. This refutes the assumption that economic growth necessarily leads to growth in employment. In fact, employment growth has been above the long run average when GDP growth has been flat or lower, for example between 2000 and 2005.

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