Though Indian economy grew at a rate of more than 8 percent in 2010, its employment sector has not yet recovered from the financial crisis. “We have seen the output recovery from the financial crisis, not the employment recovery,” said Jayati Ghosh of the centre for economic studies and planning at the Jawaharlal Nehru University (JNU) while releasing the Trade and Development Report, 2010 in New Delhi.

The report focusing on 'Employment, Globalisation and Development' was released by the United Nations Conference on Trade and Development (UNCTAD) on Tuesday. It did not present any India-specific data.

“The employment and wage rates in India have not recovered to the pre-crisis time,” Ghosh commented. “Sustainable recovery would only be guaranteed when job creation is also supplemented by a wage increases,” she added.

The report says unemployment rates are at the highest in 40 years and estimated that that 210 million people are out of jobs. "Unemployment," said UNCTAD, "is the most pressing social and economic problem of our time, not least because, especially in developing countries, it is closely related to poverty... Therefore, employment creation needs to be made a priority in economic policy," the Trade and Development Report 2010 said.

The report mentioned, “In China and India, despite the rapid growth of GDP and exports, and employment creation in modern services and manufacturing industries, a large portion of the labour force in still employed in low-productivity and informal activities.”

The UNCTAD annual report also warned the developing countries stressing on export led growth. “Exports-led growth ambitions will meet with increasing constraints now that the debt-financed consumption boom in the United States has ended,” the report pointed.

“India must focus on creating domestic demand, with job-generation and wage hikes, since export-led growth seems an unviable option for the moment,” Ghosh said.

She also added that global recovery is still very slow. “We are still in midst of extreme volatility. Banks remain extreme fragile in the developed world.”

The report also talked about India, China and Brazil as three countries at the vanguard of world recovery from the financial crisis. According to the report, “The world economy would grow by about 3.5 percent in 2010 after a contraction of almost 2 percent in 2009, spearheaded by the three leading developing countries of China, India and Brazil.” But it said that "growth rates will probably decline again in most countries in 2011," and warned against early efforts to cut budget deficits.

UNCTAD also warned countries against reversing the stimulus package at this juncture. It also said that US is not the same economic power horse again. “The US economy will no longer serve as an engine of growth for the global economy and neither China nor the Euro area nor Japan is likely to assume this role in the foreseeable future.”

The report also mentioned that countries lack global coordination efforts in the process of recovery. “G-20 managed to agree at the peak of the global financial crisis but now global coordination is weakening,” Ghosh added.