Role of Information and Communication Technology on Employment Growth in the Case of Indian Manufacturing Sector

This study investigates the impact of Information and Communication Technology (ICT) expenses on employment growth in the Indian manufacturing sector. Using firm‐level data from the Centre for Monitoring Indian Economy (CMIE) Prowess, the analysis applies the panel System‐Generalized Method of Moments estimator to assess the relationship between ICT expenses and employment growth. The findings indicate a positive association between ICT expenses and employment growth, though the effect varies depending on the firm's technical intensity. Moreover, firm‐specific factors such as size, age, ownership structure, and export activity play a significant role in shaping employment growth. This study contributes to the existing literature by emphasizing the differentiated impact of ICT across firms with varying technological intensities. The results highlight the importance of ICT expenses tailored to firm characteristics to maximize employment growth. These insights offer valuable implications for policymakers and industry stakeholders seeking to enhance employment opportunities through digital transformation in the Indian manufacturing sector.