The 1991 Census data on employment reveal that despite a significant acceleration of the industrial growth rate during the 80s, the share of manufacturing in total employment has declined. The employment elasticity in the manufacturing sector turns out to be as low as 0.2. Further, the employment growth in the private organised manufacturing has been negative during the 80s. Employment projections for the 90s based on the sectoral employment elasticities in the 80s reveal that there is a substantial addition to the volume of unemployment in the first two years of the structural adjustment programme. Even a very optimistic growth scenario fails to eliminate the backlog of unemployment by the end of this decade. This is mainly due to the dominance of the primary sector in the employment structure; whereas the major focus of the structural reform is on the growth of manufacturing sector.