The human-centred approach to increasing workplace productivity: Evidence from India

Abstract

India’s economy is currently the fifth largest in the world with a nominal GDP of US$2.94 trillion, having overtaken the United Kingdom and France in 2019. Its GDP in purchasing power parity (PPP) terms is US$10.51 trillion, exceeding that of Japan and Germany (World Population Review 2023a). Most of the country’s economic growth did not take place until after 1991, when it loosened its trade restrictions (India, NCL 2002). However, because of its large population of 1.42 billion, India’s GDP per capita stands at just US$2,170 (for comparison, in the United States of America it is US$62,794) (World Population Review 2023b). Nevertheless, owing to a declining dependency ratio, India entered the “demographic dividend” phase over two decades ago, that is, a situation where the working-age population is healthy, educated and gainfully employed. The working-age population (those aged 20–59 years) comprised 50.5 per cent of the overall population in 2011 and is projected to increase to about 60 per cent in 2041, while the share of older persons (those aged 60 years and above) will continue to rise steadily, nearly doubling from 8.6 per cent in 2011 to 16 per cent by 2041 (India, Ministry of Finance 2019). Despite having a young population, India has long been plagued by low labour productivity. Measured by GDP per hour worked (GDP constant 2017 international US dollars at PPP), the labour productivity of India in 2021 was US$8.47, compared with US$13.53 for China, US$74.15 for Singapore and US$16.62 for its South Asian neighbour Sri Lanka (ILO, n.d.; see also figure 3.1). This is because low-productivity employment dominates the labour market in both agriculture and other informal sectors such as construction (Gupta and Gupta 2020; IHD 2014).