India must create 11.5 crore jobs in next six years as millions of youngsters enter workforce: Study
May 21, 2024, 11:34 IST
With more than half of its population under the age of 35, India boasts a demographic profile brimming with potential. This youthful demographic offers a unique advantage—a vast and energetic workforce ready to propel the nation forward in various sectors.
To harness this expanding workforce effectively, India needs to create 11.5 crore jobs by 2030, focusing on bolstering the services and manufacturing sectors to sustain economic growth, a study has revealed.
According to Trinh Nguyen, a senior economist at investment banking company Natixis SA, the country must generate 1.65 crore jobs annually, a sharp increase from the 1.24 crore jobs created each year over the past decade. Of these, about over one crore jobs should come from the formal sector, she noted.
“To achieve this herculean task, India’s growth engine needs to fire on all cylinders, from manufacturing to services in the next five years,” she said in a research note.
India’s economy, which is now Asia’s third largest, is anticipated to grow by more than 7% this year, making it one of the fastest-growing economies globally. However, this growth rate is still insufficient to provide jobs for its 140 crore population, particularly evident from the current high youth unemployment rates across the country.
Challenges around unemployment have also been a key issue in the ongoing Lok Sabha Elections where the ruling party led by the Prime Minister Narendra Modi seeks a third consecutive term in office. In a recent interview with PTI, PM Modi addressed the criticism regarding job creation, stating that his government has adopted a “comprehensive, multi-sectoral approach” to attract the world’s best opportunities to India.
He also asserted that his administration has been more effective than previous governments in creating opportunities for the youth.
Despite India creating 11.2 crore jobs over the last decade, only about 10% are formal jobs, Nguyen pointed out. The country's overall labour force participation rate is 58%, significantly lower than its Asian counterparts, according to the World Bank.
This aligns with the India Employment Report 2024, released in March by the International Labour Organisation (ILO) and the Institute for Human Development. The report indicates that India’s workforce is becoming more informal, and the quality of employment has deteriorated, particularly after the COVID-19 pandemic.
Nguyen noted that India’s services sector, which constitutes more than half of the gross domestic product, has limited potential for expanding headcount and labour quality. Therefore, India should focus on the manufacturing sector and leverage opportunities from firms and countries looking to diversify away from a China-centric supply chain.
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To harness this expanding workforce effectively, India needs to create 11.5 crore jobs by 2030, focusing on bolstering the services and manufacturing sectors to sustain economic growth, a study has revealed.
According to Trinh Nguyen, a senior economist at investment banking company Natixis SA, the country must generate 1.65 crore jobs annually, a sharp increase from the 1.24 crore jobs created each year over the past decade. Of these, about over one crore jobs should come from the formal sector, she noted.
“To achieve this herculean task, India’s growth engine needs to fire on all cylinders, from manufacturing to services in the next five years,” she said in a research note.
India’s economy, which is now Asia’s third largest, is anticipated to grow by more than 7% this year, making it one of the fastest-growing economies globally. However, this growth rate is still insufficient to provide jobs for its 140 crore population, particularly evident from the current high youth unemployment rates across the country.
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He also asserted that his administration has been more effective than previous governments in creating opportunities for the youth.
Despite India creating 11.2 crore jobs over the last decade, only about 10% are formal jobs, Nguyen pointed out. The country's overall labour force participation rate is 58%, significantly lower than its Asian counterparts, according to the World Bank.
This aligns with the India Employment Report 2024, released in March by the International Labour Organisation (ILO) and the Institute for Human Development. The report indicates that India’s workforce is becoming more informal, and the quality of employment has deteriorated, particularly after the COVID-19 pandemic.
Nguyen noted that India’s services sector, which constitutes more than half of the gross domestic product, has limited potential for expanding headcount and labour quality. Therefore, India should focus on the manufacturing sector and leverage opportunities from firms and countries looking to diversify away from a China-centric supply chain.
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“The incoming administration needs to jump on the manufacturing train and capitalise on demographic and geopolitical tailwinds. Even if the road forward is challenging, it is never too late to walk down the right path,” she said in the note.