Growth Without Jobs Is a Warning
The India Commentary view
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By Our Editorial Team
First publised on 2026-10-15 06:43:08
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The India Commentary view
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India's economy is rising, but its workforce is not rising with it in any durable way. That gap is the real story behind the 7% forecast. A growing economy that cannot absorb its young into secure, productive work is growing unevenly, and the government should say so plainly.
The IMF, the World Bank and the RBI have all raised their projections. Investment is strong and exports have held up. Yet none of these figures tells us how many people found a decent job this year. Output can rise while good employment stands still. When that happens, the headline improves and the household does not.
Infrastructure is central to this question. Roads, housing and other construction generate real employment, and much of it reaches workers who badly need it. But that work is largely temporary and ends when the project does. The test is what follows. A highway creates jobs while it is built, and it creates lasting jobs only if factories, warehouses, farms and services grow along it. Policy should therefore measure the permanent employment that public investment produces, not only the wages paid during construction.
The gap is widest where it matters most. Every year, millions of young Indians enter the job market. Too many end up in informal work, in self-employment born of necessity, or in unpaid labour in a family enterprise. Employment figures count all of them as employed. They do not tell us whether the work is secure, whether it pays enough, or whether it uses the worker's training. The problem arises when educated workers are pushed into low-paid or insecure work because suitable openings do not exist. For some, such work is a temporary bridge. For many, it becomes a permanent ceiling.
Current conditions add pressure. International oil and energy prices have risen, and that raises the import bill and feeds inflation. Both retail and wholesale inflation exceeded expectations last month. The RBI has raised interest rates, and further tightening is possible if price pressures persist. Costlier credit can hurt small firms in particular, depending on their debt, their cash flow and their access to finance. Small firms employ a large share of Indian workers, so any squeeze on them reaches the workforce quickly.
The remedies must therefore be specific, and they must be accountable. Employment-linked incentives should reward additional, sustained jobs, not the headcount on a payroll at one moment. Otherwise firms can qualify by relabelling existing staff or by creating posts that vanish when the subsidy ends. Skilling programmes should be judged by placement, retention and earnings, not by enrolment or certificates issued. The government must also publish timely and credible employment data, because a policy that is not measured cannot be corrected.
India deserves credit for growing in a difficult year. But a nation does not live on a forecast. It lives on wages, and wages need work. Until job creation keeps pace with growth, the 7% figure is an achievement for the balance sheet and an unfinished promise to the young.
