India's macroeconomic policy regime and challenges of employment

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Eradicating poverty and promoting decent work hinge on sustained, inclusive economic growth rather than mere high growth rates. Achieving this requires interventions across multiple fronts, including providing adequate macroeconomic space for national governments and fostering equitable multilateral trading systems. Key elements of a coordinated macroeconomic policy framework include investments in physical and social infrastructure, especially in rural areas, necessary structural reforms, and supportive fiscal and monetary policies that benefit micro, small, and medium enterprises. Since the early 1990s, India has undergone a significant shift in the State-Market relationship, driven by a policy reform program leading to substantial economic liberalization. However, this transition has lacked essential macroeconomic interventions for inclusive growth and decent work. Despite official figures indicating accelerated growth since the 1990s, labour market outcomes remain troubling. Employment generation has not kept pace with GDP growth, and the elasticity of employment concerning output has declined. Organized manufacturing and services have contributed minimally to job creation, with expectations of significant employment opportunities from neo-liberal policies largely unmet. Instead, most new jobs are in casual and self-employment, which carry adverse social and distributional implications. Overall, important labour market out