Missing Middle

The story of the jobless growth in India.

India currently is at a stage of demographic dividend , where almost half of its youth is under
30 years of age and as per Center for monitoring Indian economy (CMIE) to reap the
benefits of this dividend India needs to create 20 Million Jobs per year in accordance to
increase in GDP and the job seekers. However , we are only able to create 10% of the
required jobs which is why the Indian economy is in the state of Jobless Growth, a state
where the economy recovers from the shock but is unable to provide jobs, which means The
growth is either technology driven or is driven by a handful of players.

In any economy the Industrial sector is the largest provider of jobs , however the Indian
economy suffers from the missing middle which means our Industrial sector never growed as
compared to the other countries and the remaining two sectors. The reason behind this is the
monopoly of the Indian Government in the Industrial sector through Licencing , Permit and
Quota Raj till 1980's which suppressed the industrial spirits of the Indian citizens. After 1980
, the government started giving little relaxation which culminated in the Liberalisation,
Privatisation and Globalisation policy of 1991. Which brought and developed the tertiary
sector in India along with the foreign industries, therefore only providing 10 years to Indian
Industries to grow. Furthermore, the benefits of LPG Reforms were limited to certain sections
and areas only , which led to regional disparity and masses were not able to take advantage of
this due to low skill level among Indians as per CMIE still less than 50% of the graduates
have necessary cutting edge skills to get jobs in current market. Over the years this
characteristics of the Indian economy led to an extensive burden on the primary sector which
became the highest employment providing sector with decreasing contribution to GDP.
All these issues were created due to the lack of a developed industrial sector and skill base in
India. To counter this, the Indian government has focused on developing the Industrial sector,
especially the MSMEs as they are the largest job provider in the secondary sector in India ,
through various schemes such as Production linked incentives, MUDRA yojana and Startup
India to stimuli the industrialists and entrepreneurs of India. Furthermore, to improve the skill
base of the Indian youth ,the government has started the Skill India mission and brought out
the New Education Policy to make Indian youth job ready and desirable for the job market.