Introduction

Globalization has transformed India’s economy, promoting trade and investment but causing shifts in employment patterns. Formal sector jobs have declined, and informalization has risen, with over 90% of India’s workforce employed informally as of 2022, posing developmental challenges.

Body

1.Impact of Globalization on Formal Employment

i.Automation and Outsourcing: Adoption of advanced technologies and outsourcing of jobs have reduced labour-intensive formal employment in sectors like manufacturing. For instance, the manufacturing sector's contribution to GDP fell from 17% in 1995 to 14% in 2022, impacting formal jobs.

ii.Rise of Contractual Jobs: Global competition has led companies to prefer contractual and gig work, contributing to informal employment. The gig economy is growing at 15% annually, employing over 7.7 million workers in 2022.

iii.Decline of Small-Scale Industries: Liberalization exposed small industries to global competition, resulting in a 40% reduction in small enterprise jobs since the 1990s.

2.Impact of Increased Informalization