As India continues to expand as one of the world’s fastest-growing large economies, it faces a huge task: the need to create 115 million jobs by 2030 to accommodate its workforce, according to a recent study cited by Bloomberg.
Research by Trinh Nguyen, chief economist at Natixis SA, reveals that India needs to significantly accelerate job creation to keep pace with the demographic demands of its 1.4 billion people.
The study indicates – according to Bloomberg – that the third largest economy in Asia should generate approximately 16.5 million job opportunities annually over the next decade, which exceeds the 12.4 million job opportunities created annually in the previous decade.
“To achieve this daunting task, India’s growth engine needs to activate all opportunities from manufacturing to services in the next five years,” Nguyen noted.
Despite the expected economic growth rate exceeding 7% this year – one of the highest rates in the world – India faces high unemployment rates among youth, according to Bloomberg, which poses a major challenge to Prime Minister Narendra Modi at a time when he is seeking a third term in the current general elections. In India currently.
Over the past decade, although the Indian economy was able to add 112 million jobs, only about 10% of these jobs are formal, and the country’s overall labor force participation rate, which stands at 58%, lags far behind its Asian counterparts, according to World Bank reports.
Nguyen underscores the limited capacity of India’s services sector, which accounts for more than half of GDP, in terms of the number of workers and the quality of labour, and suggests that India could boost its economic prospects by focusing on manufacturing, positioning itself as an attractive alternative for companies and countries looking to diversify. Far from the China-centric supply chain, as the agency indicated.
Nguyen advises India that “the next administration needs to jump on the industrialization train and take advantage of the demographic and geopolitical conditions,” stressing that “even if the path forward is difficult, it is not too late to get on the right path.”
