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Over the next five years, India needs to create 12-15 million jobs in non-agricultural sectors every year to address the gap in jobs, with more young people joining the workforce, a report said on Tuesday.
"Over the next five years, India will need to create 12-15 million non-agricultural jobs per year. However, between 2005 and 2012, only eight million such jobs were created. Hence, the gap of 4-7 million jobs a year needs to be addressed, which is likely to rise with the rise in young people joining the labour force," a joint report by Boston Consulting Group and the Confederation of Indian Industry (CII) said.
The report titled Growth and Jobs in the New Globalisation was unveiled here.
"By 2040, India is projected to have the maximum share of working-age population. Coupled with its historically low job creation, the situation begets the need for specific strategies that address both growth and jobs," the report said.
Historically, growth in India has not been met with the same pace of job creation, it said.
"Between 2004 and 2012, GDP growth was 8.1 per cent but job growth averaged only two per cent. Between 2000 and 2012, 355 million jobs should have been created in India; however, only 75 million jobs were created," it added.
According to the authors, India also faces the challenge in view of the global growth slowing down and is unlikely to exceed 3.5 per cent in the short to medium term.
"Protectionism is on the rise and industry is changing the costs and productivity of manufacturing, eroding the advantage held by low-cost labour intensive countries and reshaping global supply chains," it said.
"Against this backdrop, India will have to grow at 8 per cent or higher in order to go from being a lower-middle income country to an upper-income country in the next 20 to 30 years," it added.
The report also stresses on the urgency to seize the opportunities that are present in the light manufacturing sectors, taking advantage of the shifts from China, where costs in these sectors are on the rise.
"The services sector shows immense promise; the global export of services (especially digital services) has grown much faster than the export of manufactured goods since 2011. Further, in India, the contribution of services to domestic consumption has almost doubled in the last 25 years and is likely to continue increasing," it said.
Arindam Bhattacharya, Senior Partner and Director, BCG, said, "Much has been written about the adverse impacts of digitisation on jobs. In this report, we present a new paradigm, where these digital technologies will support in creating jobs and growth, in what we term as the 'new globalisation'."
"We are witnessing the immense potential in the impact of technology stacks in India, with India truly being at the forefront compared to other countries. What is needed now is a regulatory body that can oversee the building of the technology stacks across sectors and provide the necessary regulatory support," Bhattacharya said.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)