Analysing Growth Paths and Employment Performance of Indian Food Processing Industry: Uncovering Dynamics at the Sub-sectoral Level

Abstract

Against the backdrop of a potential productivity-employment trade-off, the performance of the Indian Food Processing Industry (FPI) and its sub-sectors on key employment-related indicators was assessed over two decades (1998-99 to 2017-18). Based on ASI's 4-digit level dataset on FPI's 18 sub-sectors, the patterns of output growth were analysed and categorised into extensive, intensive, stagnant and virtuous growth paths. Pooled panel regression-based employment elasticities were estimated across subsectors to determine prospects of employment generation. Despite declining employment elasticities for aggregate FPI, prospects for future employment creation were found in the rapidly growing subsectors, which exhibited relatively higher employment elasticity of growth. The exploration of sub-sectoral dynamics highlights the need for adequately reflecting on the heterogeneity in employment-related parameters across growth paths and suitably inform policy interventions ing at a juncture when the Government of India has renewed emphasis on boosting employment in the organised manufacturing segment.