Role of FDI on Employment Scenario in India

Abstract

Employment generation is treated as an important stimulus for enhancing growth in the developing countries. It is quite easy to believe that FDI inflows can provide the solution for many economic issues in the economy, but in case of employment creation this effect is quite convoluted in India. The central objective of this paper is to find out the relationship between FDI inflows and employment generation in India during the period 1991 to 2018. This research paper uses secondary data from different published sources to analyse the influence of FDI on employment generation in India using the relevant descriptive analysis.FDI has both backward and forward linkages in employment creation in India. FDI shows a three times increase in growth rate in the second decade than in the first decade, i.e., during 2002 to 2012 in the service sector in India. Banking and insurance sector is the first in attracting major FDI proposals followed by the telecommunication sector, which is in second position in attracting FDI in India. In the service sector FDI generates highest job opportunities than any other sector in India. The result of this study shows that employment generation in India during the last two decades is quite detectable, but FDI inflows may not be regarded as a major factor for this growth rate. Thus the government of India should take some policy measures to captivate employment generation in India basically in organised sector.