Abstract

Worsening joblessness in India is put forward here from the multiple and interconnected
argumentative lens of formal-informal dichotomy by labour productivity differential,
market size constraint, labour market flexibility, capital inflows, political constraint,
corporate industrialization and welfare economic implications. In the process, the limitations
of the classic developmental ideas of Kuznets, Lewis and Schumpeter are critiqued.
Thereafter, an alternative policy framework is proposed to achieve economic development
focused on employment, equity and environmental uplift. The paper shows how the massive
unemployment problem can be managed in India’s democratic set up by departing from conventional
wisdom about industrialization.

JEL Classification: D6; D62; D72; E6; E12; E24; E26; H41; J08; J21; J64; J83; N5; O1;
O2; O11; O14; O17.