Input-Output Linkages across Sectors and Employment Challenge in Indian Economy

While Indian economy has performed well in terms of growth, especially during the last decade, employment generation for the population has remained a major challenge. This is particularly so, as several growth generating sectors (especially belonging to the services sector) are mostly capital-intensive and not labour-intensive. To identify the employment generating sectors within an economy, a linkage based analysis is useful as it shows the creation of employment within the sector concerned as well as in the related sectors through its direct and indirect linkages. This paper attempts to identify the employment generating sectors in terms of their employment linkages in the Input-Output framework for 2003-2004 and 2007-2008. Further, it examines whether a high output linked sector is also employment generating or not. Identification of such sectors has implications for inclusive growth for an economy.