Are Labour-Intensive Industries Generating Employment in India? Evidence from Firm Level Survey

This study attempts to address the issue of declining labour intensity in India’s organised manufacturing in an attempt to understand what constrains employment generation in labour-intensive sectors. Using primary survey data covering 252 labour-intensive manufacturing–exporting firms across five sectors—apparel, leather, gems and jewellery, sports and bicycles—for the year 2005-06, an attempt is made here to discern the factors which constrain the generation of employment in labour-intensive firms. This study shows several constraints in the path of employment generation in the labour-intensive sectors—non availability of trained skilled workers, infrastructure bottlenecks, low levels of investment, tedious labour rules and regulations, and non-competitive export orientation. The study suggests a set of policy initiatives to improve the employment potential of these sectors