Labour Productivity Contributes to Economic Growth

Labour Productivity Contributes to Economic Growth

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The total volume of output (measured in terms of GDP) produced per unit of labour (measured in terms of the number of employed workers or hours worked) over a specific time reference period is referred to as Labour Productivity, according to the ILO or, the International Labour Organization. India has recently experienced economic growth fueled by a rise in labour activities. This progress has been influenced by a number of important causes. Since the Covid-19 pandemic began, the prominence of work-from-home opportunities has been one of the most significant drivers. Working from home has made it possible for people to devote more time to their various economic endeavours and vocations, which has increased labour activity and, as a result, productivity.

Additionally, during this time, industries like ed-tech and other digitally-driven disciplines have prospered and helped to raise labour activity, productivity, and ultimately economic growth. Additionally, the government's initiative in implementing numerous significant programmes (Skill India) intended to upskill the workforce and support the start-up ecosystem (Startup India) has led to the development of a trained and well-equipped workforce. Additionally, the return to normal economic activity after nearly two years of lockdowns brought on by Covid has enhanced labour activity and productivity. Additionally, a number of actions can be made to establish a growth pattern that supports job growth without sacrificing labour productivity. To assure the generation of an acceptable number of employment without compromising labour productivity, manufacturing-intensive industries, the MSME sector, and start-ups should be encouraged.

Government can boost employment while preserving labour productivity by investing in capital projects. Additionally, it can start financially responsible programmes to increase government hiring as well as upskill the workforce. Another strategy for preserving labour productivity and ensuring economic growth is to concentrate on automation and introduce new, effective technology. A concerted effort should be undertaken to integrate those populations into the workforce who, up until now, have not been able to actively participate in labour activities.

As a result, higher labour activity, rising productivity and economic growth have all been significant aspects of the post-pandemic economy. Thus, it is crucial to have a growth pattern for the economy that guarantees its sustainability.