With the country being the fastest growing emerging economy and all key macroeconomic indicators pointing towards robust economic growth prospects, the data on Employment in the Annual Periodic Labour Force Survey (PLFS) conducted by the Ministry of Statistics and Programme Implementation (MoSPI) shows that unemployment rate (UR – percentage of persons unemployed among the persons in the labour force) on usual status for persons of age 15 years and above has decreased from 6.0% to 3.2% in 2023-24 as against 2017-18.However, on the other hand, one also needs to be aware that the country’s growing working age population, the Worker Population Ratio (WPR – percentage of employed persons in the population) has increased from 46.8% in 2017-18 to 58.2% in 2023-24. Rather, as per the Economic Survey 2023-24, the nation needs to create 78.5 lakh jobs on an annual basis in the non-farm sector to provide for its growing workforce.
Another case in point being: Data for July-September 2024 as per the PLFS, shows that the Labor Force Participation Rate (LFPR – percentage of persons in labour force i.e. working or seeking or available for work in the population) in urban areas for India during June-September 2024 was 50.4%, Male LFPR stood at 75% as against Female LFPR of 25.5% for the same time period. While Global Female LFPR for 2023 was just over 50%, for developed nations such as US, UK it was 56.5%, 58.3% resp., for China (an upper middle country) it was 60.5% as against India for which Female LFPR in 2023 was 32.7%.
Thus, to be a Viksit Bharat by 2047, the country not only needs to generate more jobs, but also needs to move the needle on the Female LFPR and encourage more women to be an integral part of India’s growth story.
Keeping the same in mind, in the recent meeting of the honorable Prime Minister with eminent economists and industry experts in December 2024, one of the keenly discussed issue was that of enhancing employment prospects for the burgeoning youth population, devising strategies aimed at developing the requisite skill set and suitably addressing the skill mismatch between industry and academia, thereby capitalizing on the country’s demographic dividend.
Thus, with an eye on bolstering employment generation in the country, schemes such as the Employment Linked Incentive Scheme announced in the Union Budget 2024-25, it is also imperative that the nation continues to keep a sharp eye on bridging the gap between education and industry requirements by aligning the curriculum with industry needs through partnership between academia and private enterprises.
Implementation of the new labour codes for greater job creation in the formal sector and focusing on labor intensive sectors is the need of the hour. It will not only create significant employment opportunities but will also ensure ease of doing business, thereby promoting and encouraging industry to increase private investments.
Government backed loans such as MUDRA Yojana giving increased credit access to MSME sectors, creating digital platforms to connect MSMEs with not only domestic but also international markets, promoting the startup ecosystem and encouraging rural entrepreneurship, supporting agri-tech and alternate livelihoods adoption such as fishery, animal husbandry etc, focusing on ‘Make in India’, upgrading and effectively implementing the MGNREGA 2.0, introducing the urban employment scheme focusing on low income urban population, building an effective framework for the gig economy are all steps in the right direction.
“Hundreds of small cities have a key role in achieving the resolve of a developed India by 2047”-Shri Narendra Modi. Renewed focus on building of smart cities and revamping and redesigning urban infrastructure will help drive long-term economic growth by fostering innovation and efficient resource management and will also serve to create employment opportunities and foster balanced regional development for the nation.
Urban planning and infrastructure development, particularly in the context of smart cities and enhanced transport and logistics systems is known to play a critical role in generating employment opportunities across various sectors such as construction and infrastructure development construction workers, civil engineers, architects etc), technology implementation ((IoT specialists, data analysts etc.), urban services management (urban designers, urban planners etc), jobs in transportation and logistics development.
Enhancing and scaling up programs such as the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) with a focus on emerging sectors such as Artificial Intelligence (AI), renewable energy, EV manufacturing, expertise in environmental sustainability etc.; increased investments in vocational training and other professional institutes will go a long way in not only generation of jobs but being quality jobs and higher in the value chain will also lead to more income in the hands of people and provide the requisite boost to living standards.
Higher paying innovative jobs will give the added benefit of the nation not being caught in the middle income trap (a state wherein the country having gone through a period of sustained growth, subsequently loses its competitiveness with other low-wage, low-income nations on one side, and has an inability to improve technology to compete with high-income, high-skill nations on the other, Kharas & Kohli, 2011).
Research has shown that factors such as technology innovation and increased female labor force participation rate can help solve the problems of the middle income trap. Thus, the development of new age contemporary skill sets which is not only essential in today’s evolving socio-economic and technological landscape, but will also enhance the nation’s economic growth trajectory and will drive multifaceted outcomes for nation building.
(The author is Area Chair, Economics & International Business, BIMTECH; Views are personal)
