EMPLOYMENT ELASTICITY IN POST-LIBERALISATION INDIA A SECTORAL COMPARISON WITH A FOCUS ON CONSUMER GOODS MANUFACTURING
DOI:
https://doi.org/10.29121/granthaalayah.v13.i10.2025.6515Keywords:
Employment Elasticity, Consumer Goods Manufacturing, Post-Liberalisation India, Labour Absorption, Structural ChangeAbstract [English]
This paper examines how the employment elasticity of consumer goods manufacturing compares with other major sectors of the Indian economy during the post-liberalisation period. Using India KLEMS data for 1991–92 to 2019–20, the study estimates sector-specific employment elasticities with a log–log regression framework and assesses whether the elasticity of each sector differs statistically from that of consumer-goods manufacturing. The study focuses on two sub-periods, 1991–92 to 2002–03 and 2003–04 to 2019–20, which reflect the transition from a partially liberalised regime to a more fully liberalised one. The results show that in the 1990s, the employment potential of consumer goods manufacturing was broadly similar to other manufacturing and service sectors. After 2003, however, its elasticity becomes negative and significantly lower than that of most other sectors. These findings suggest a clear weakening in the employment responsiveness of consumer goods manufacturing in the later post-reform period and provide evidence of a widening divergence in sectoral employment performance.
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