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The Employment Potential Of Labor Intensive Industries In India's Organized Manufacturing

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Executive Summary

This paper attempts to identify and examine labor intensive industries in the organized manufacturing sector in India in order to understand their employment generation potential. Using the data from the Annual Survey of Industries (Government of India, various issues), the labor intensity for 97 industries at the 4-digit disaggregate level was computed for the period 1990-91 to 2003-04. The paper identifies 31 industries as 'labor intensive industries' within India's organized manufacturing sector. The paper finds that labor intensity has declined not only for capital intensive industries but also for labor intensive industries during the selected time period. The increase in output failed to generate enough employment growth resulting in a significant decline in employment elasticity.

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