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New Delhi: According to a report by Goldman Sachs, India will need approximately 10 million new jobs each year from FY25 to FY30 to achieve an average Gross Value Added (GVA) growth of 6.5 per cent annually.
One strategy for job creation includes incentivising affordable housing developments, which could significantly stimulate the real estate sector. This sector employs over 80 per cent of the labour force within construction, thereby creating numerous opportunities across various skill levels.
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The establishment of IT hubs in tier-2 and tier-3 cities, along with Global Capability Centers (GCCs) in smaller towns, would alleviate pressure on Tier-1 urban centres and generate job opportunities in underserved areas.
Focus on Labour-Intensive Manufacturing
Shifting fiscal incentives towards labour-intensive manufacturing sectors such as textiles, food processing, and furniture could also bolster job creation for low- to middle-skilled workers. Although the government’s Production-Linked Incentive (PLI) schemes have primarily benefited capital-intensive industries, Goldman Sachs highlights a positive trend towards more labour-intensive sectors, including textiles, footwear, toys, and leather goods. This approach aims to align India’s manufacturing sector with broader employment objectives, as approximately 67 per cent of manufacturing jobs are found in labour-intensive fields.
Employment Trends Over the Last Two Decades
Over the past two decades, India added around 196 million jobs, with two-thirds created in the last decade alone. A significant transition has been observed, with more workers moving from agricultural roles to construction and service sectors. Currently, construction is a key driver for employment in India, accounting for roughly 13 per cent of total jobs. Investment in real estate and infrastructure has not only facilitated job creation but also positively impacted income levels for low- to medium-income households.
The services sector, contributing about 34 per cent of total employment, has also experienced significant growth. The retail trade segment, in particular, has benefited from digital transformation as retailers shift to online platforms, generating new roles in inventory management, packaging, and delivery services.
Increased Labour Force Participation
India’s Labour Force Participation Rate (LFPR) has risen from 50 per cent in FY18 to 60 per cent in FY24, largely driven by increased female participation, particularly in rural areas. This rise is attributed to improved measurement practices, greater financial inclusion through targeted credit schemes for women, and expanded opportunities in small and micro-enterprises.
India’s demographic transition presents a unique 20-year opportunity to capitalise on a low dependency ratio, with a substantial working-age population set to enter the labour market. (ANI)
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