Revision summary
Post-1991 opening grew formal jobs in IT, ITeS, retail, banks, and some auto and SEZ plants. SEZ Act 2005 and Make in India named the park-and-investment rails. Contract labour and fixed-term hiring informalised much factory work even when the unit was registered. EPFO, ESIC, labour codes, and Atmanirbhar Bharat Rozgar Yojana are the social-security response. Net: more white-collar formality, weaker shop-floor security.
Model answer
Introduction
Globalization after 1991 opened trade, foreign investment, and services. Formal-sector employment—EPFO- and ESIC-covered jobs—grew in some industries and thinned in others. An examination must hold both sides.
Body
Gains in organised employment
- Information technology, IT-enabled services, organised retail, banking, and automobiles hired graduates into EPFO-covered posts as FDI and export demand rose.
- Special Economic Zones under the SEZ Act, 2005, and later Make in India clusters added factory and logistics jobs with written contracts in some parks.
- Global capability centres and startups widened white-collar formal work in a few metros.
Informalisation and quality
- Many factories shifted to contract labour, fixed-term employment, and outsourcing, so the plant stayed formal while the worker did not get a stable EPFO trail.
- Jobless phases of growth and automation cut shop-floor hiring even when output rose.
- The four labour codes aim to widen social security, but coverage still lags; Atmanirbhar Bharat Rozgar Yojana tried to subsidise new EPFO enrolments after the pandemic shock.
The formal sector therefore grew in services and a few manufacturing niches, while much factory work became formal only on paper.
Flow diagram
flowchart TD G[Globalization 1991] --> I[IT ITeS FDI SEZ] G --> C[Contract fixed-term] I --> F[Formal EPFO jobs] C --> W[Thin job quality] L[Labour codes ABRY] --> F L[L] --> W[W]
Conclusion
Globalization expanded formal IT, finance, and some SEZ jobs, and simultaneously pushed contract and fixed-term work inside plants. EPFO, ESIC, and the labour codes are the named safety nets; they do not by themselves restore secure factory employment.
Quick related
Students also ask
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How does the strategy of inclusive growth intend to meet the objectives of inclusiveness and sustainability together? Explain.
Next question in the 2021 paper (Q3). View answer →
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Did globalization only destroy factory jobs?
No. It created large formal IT and service employment. Factory jobs often became contractual rather than disappearing entirely.
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Is a contract worker in a registered factory formal?
The unit is formal; the worker’s security depends on EPFO/ESIC enrolment and tenure, which contract chains often dilute.
Same topic · past papers
UPPSC has asked this before
These previous-year questions sit on the same topic. Open one to practise the earlier ask.
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2018 · Q1 · UPGS3 · 8 marks
Evaluate the effects of globalization on industrial development in India.
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