India’s employment growth since the

India’s employment growth since the mid-1980s has not mirrored that of output,
either in terms of pace or composition (table 1). From 1983 to 2005, total employment
rose just over 2 percent at an annual rate, about matching the pace of the slower-growth
1970s.2
On a per capita basis, the contrast is starker; output per capita has almost tripled
since 1983, while employment per capita is little changed.3
Moreover, there is only a
weak tendency for Indians to leave agriculture for higher productivity work elsewhere.
Employment growth in the industry and services sectors has actually slowed since 1980,
while that in agriculture held steady. As a result, the booming services sector accounts
for only ¼ of current employment, and the agriculture sector still employs over half of
the Indian workforce. The combined share of manufacturing and services employment in
India’s total employment is also low relative to China and Korea, reflecting their stronger
employment growth in services and weak or negative growth in agriculture.