<p>A central paradox of India’s development trajectory is the persistent disconnect between rapid economic growth and low employment generation. This study investigates the structural dynamics underpinning this paradox over the period 1983–2023. Using the large-scale survey datasets from the NSSO Employment-Unemployment Surveys and the Periodic Labour Force Surveys, the study applies the canonical Shapley decomposition framework to disentangle the relative contributions of intra-sectoral productivity changes and inter-sectoral labour reallocations to per capita output growth. Furthermore, it also analyses the structural change index (SCI) and employment elasticity for India. This analysis reveals a pattern of variation in employment as well as gross value added between and within the sub-sectors of India. The results show that productivity plays a crucial role in driving per capita output growth, while the contributions of static and dynamic reallocation are minimal. In dynamic allocation, within-sectoral productivity plays a significant role, revealing that the agriculture and manufacturing sectors contribute the most to overall productivity growth, while sectors such as finance, real estate, and construction make only a minimal contribution. Moreover, the analysis confirms that output growth has not been accompanied by commensurate employment growth, suggesting a decoupling of economic expansion from job creation. The results indicate a persistent decoupling of output growth from employment expansion, reflecting a weak process of structural transformation. These findings underscore the need for targeted policy interventions to promote inclusive growth and generate decent employment opportunities.</p>