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Job creation rate not in sync with GDP growth a concern for India

While the country needs 15 million new jobs every year, only 7 million jobs are created annually

Rakesh Rao  |  Mumbai 

Though India has emerged as the second fastest growing of the world, it has failed to create enough jobs for aspiring population. “GDP growth levels and new in India have not been growing at the same rate. The scenario is changing, not just in India but globally - and India needs to make necessary changes to meet the new challenges,” said Dr Rajiv Lall, founder MD & CEO, IDFC Bank, at conference in Mumbai. 

Despite the global job crunch, India may have better success in creating new job opportunities. But, it will have to put to work the right resources and planning process for ensuring new meets the requirements. The creation of more and better jobs and livelihoods is today an imperative for policymakers everywhere. How and where in India are jobs going to be created and sustained?

Dr pointed out that things had changed, and India could not ensure it was future-ready unless it made necessary changes in not just the planning process, but also in understanding, defining the issues involved, as also work on solutions which would ensure to meet the growing number of job seekers.

Jamshyd Godrej, past president, and chairman & managing director, Godrej & Boyce Mfg Co Ltd, said, “The gap between numbers of jobs created and jobs required has widened despite strong GDP growth during the past few years. There is a need to recognise the situation; as regards the solution, we need more innovations and ideas to create more jobs.” 

is about the challenge for inclusive growth globally, said Arun Maira, former member, Planning Commission of India. Providing an overview on the issue, he said, “India is the country which faces the largest challenge in this regard.” Focusing only on the top line while evaluating statistics on GDP growth can be the wrong approach, if does not keep pace with the same, he said, adding that there was a need for companies to place human resources as assets on their balance sheets, while stressing on the need for continuing learning as also re-skilling to ensure human resources remained relevant to job requirements.

Times are changing, globally as also within India, and a systems-thinking approach and scenario formulations used by strategists and policy makers were not able to provide answers that would ensure was done as per required numbers.

“The real challenge lies in identifying the relevant drivers that will dramatically boost India’s potential. Every year, 10-12 million young Indians join the labour force, 5 million people leave agriculture to join the non-agriculture sectors. There is a total demand of 17-20 million jobs per annum,” opined Aparna Bijapurkar, project leader, Boston Consulting Group.

The impact of globalisation on India’s job scenario was best explained by statistics on GDP growth vis-a-vis job creation, wherein India posted 6 to 7 per cent GDP growth, while not being able to create sufficient new jobs to match the GDP growth rate. “India needs 15 million new jobs every year, 7 million jobs are being created annually. From a time when manufacturing was perceived as providing jobs while agriculture was the sector perceived to be creating about half of the new jobs, things had changed. With the rise in new digital economy, the ideal new strategy would be one where GDP growth and both, will be at similar levels. Ensuring a ‘future ready’ human resource would be the main challenge going ahead,” she said.

Detailing the changed circumstances, Dr Rajiv Lall, explained that bulk of India’s job creating businesses are in the informal sector - as per 2012 figures, the data suggested 92 per cent of enterprises that created jobs were from the informal sector, and the biggest stumbling block for these was lack of formal credit. The agriculture sector was reducing the number of new jobs being created, while sectors like construction and services had created new jobs. 

The emphasis on agro sector as a driver of growth for the Indian notwithstanding, new jobs created by the agriculture sector had declined over the past years. Rate of in the private sector was higher than that in the public sector, Dr pointed out. “Globally, large scale because of technology had reduced, while in India micro, small and medium scale enterprises have been creating more jobs – the scenario is changing, and we need to be prepared to make changes as would ensure that the declining employment elasticity of GDP growth is dealt with – and growth in continues on a positive note,” he added.

First Published: Fri, June 09 2017. 15:46 IST
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Job creation rate not in sync with GDP growth a concern for India

While the country needs 15 million new jobs every year, only 7 million jobs are created annually

While the country needs 15 million new jobs every year, only 7 million jobs are created annually
Though India has emerged as the second fastest growing of the world, it has failed to create enough jobs for aspiring population. “GDP growth levels and new in India have not been growing at the same rate. The scenario is changing, not just in India but globally - and India needs to make necessary changes to meet the new challenges,” said Dr Rajiv Lall, founder MD & CEO, IDFC Bank, at conference in Mumbai. 

Despite the global job crunch, India may have better success in creating new job opportunities. But, it will have to put to work the right resources and planning process for ensuring new meets the requirements. The creation of more and better jobs and livelihoods is today an imperative for policymakers everywhere. How and where in India are jobs going to be created and sustained?

Dr pointed out that things had changed, and India could not ensure it was future-ready unless it made necessary changes in not just the planning process, but also in understanding, defining the issues involved, as also work on solutions which would ensure to meet the growing number of job seekers.

Jamshyd Godrej, past president, and chairman & managing director, Godrej & Boyce Mfg Co Ltd, said, “The gap between numbers of jobs created and jobs required has widened despite strong GDP growth during the past few years. There is a need to recognise the situation; as regards the solution, we need more innovations and ideas to create more jobs.” 

is about the challenge for inclusive growth globally, said Arun Maira, former member, Planning Commission of India. Providing an overview on the issue, he said, “India is the country which faces the largest challenge in this regard.” Focusing only on the top line while evaluating statistics on GDP growth can be the wrong approach, if does not keep pace with the same, he said, adding that there was a need for companies to place human resources as assets on their balance sheets, while stressing on the need for continuing learning as also re-skilling to ensure human resources remained relevant to job requirements.

Times are changing, globally as also within India, and a systems-thinking approach and scenario formulations used by strategists and policy makers were not able to provide answers that would ensure was done as per required numbers.

“The real challenge lies in identifying the relevant drivers that will dramatically boost India’s potential. Every year, 10-12 million young Indians join the labour force, 5 million people leave agriculture to join the non-agriculture sectors. There is a total demand of 17-20 million jobs per annum,” opined Aparna Bijapurkar, project leader, Boston Consulting Group.

The impact of globalisation on India’s job scenario was best explained by statistics on GDP growth vis-a-vis job creation, wherein India posted 6 to 7 per cent GDP growth, while not being able to create sufficient new jobs to match the GDP growth rate. “India needs 15 million new jobs every year, 7 million jobs are being created annually. From a time when manufacturing was perceived as providing jobs while agriculture was the sector perceived to be creating about half of the new jobs, things had changed. With the rise in new digital economy, the ideal new strategy would be one where GDP growth and both, will be at similar levels. Ensuring a ‘future ready’ human resource would be the main challenge going ahead,” she said.

Detailing the changed circumstances, Dr Rajiv Lall, explained that bulk of India’s job creating businesses are in the informal sector - as per 2012 figures, the data suggested 92 per cent of enterprises that created jobs were from the informal sector, and the biggest stumbling block for these was lack of formal credit. The agriculture sector was reducing the number of new jobs being created, while sectors like construction and services had created new jobs. 

The emphasis on agro sector as a driver of growth for the Indian notwithstanding, new jobs created by the agriculture sector had declined over the past years. Rate of in the private sector was higher than that in the public sector, Dr pointed out. “Globally, large scale because of technology had reduced, while in India micro, small and medium scale enterprises have been creating more jobs – the scenario is changing, and we need to be prepared to make changes as would ensure that the declining employment elasticity of GDP growth is dealt with – and growth in continues on a positive note,” he added.
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Business Standard
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Job creation rate not in sync with GDP growth a concern for India

While the country needs 15 million new jobs every year, only 7 million jobs are created annually

Though India has emerged as the second fastest growing of the world, it has failed to create enough jobs for aspiring population. “GDP growth levels and new in India have not been growing at the same rate. The scenario is changing, not just in India but globally - and India needs to make necessary changes to meet the new challenges,” said Dr Rajiv Lall, founder MD & CEO, IDFC Bank, at conference in Mumbai. 

Despite the global job crunch, India may have better success in creating new job opportunities. But, it will have to put to work the right resources and planning process for ensuring new meets the requirements. The creation of more and better jobs and livelihoods is today an imperative for policymakers everywhere. How and where in India are jobs going to be created and sustained?

Dr pointed out that things had changed, and India could not ensure it was future-ready unless it made necessary changes in not just the planning process, but also in understanding, defining the issues involved, as also work on solutions which would ensure to meet the growing number of job seekers.

Jamshyd Godrej, past president, and chairman & managing director, Godrej & Boyce Mfg Co Ltd, said, “The gap between numbers of jobs created and jobs required has widened despite strong GDP growth during the past few years. There is a need to recognise the situation; as regards the solution, we need more innovations and ideas to create more jobs.” 

is about the challenge for inclusive growth globally, said Arun Maira, former member, Planning Commission of India. Providing an overview on the issue, he said, “India is the country which faces the largest challenge in this regard.” Focusing only on the top line while evaluating statistics on GDP growth can be the wrong approach, if does not keep pace with the same, he said, adding that there was a need for companies to place human resources as assets on their balance sheets, while stressing on the need for continuing learning as also re-skilling to ensure human resources remained relevant to job requirements.

Times are changing, globally as also within India, and a systems-thinking approach and scenario formulations used by strategists and policy makers were not able to provide answers that would ensure was done as per required numbers.

“The real challenge lies in identifying the relevant drivers that will dramatically boost India’s potential. Every year, 10-12 million young Indians join the labour force, 5 million people leave agriculture to join the non-agriculture sectors. There is a total demand of 17-20 million jobs per annum,” opined Aparna Bijapurkar, project leader, Boston Consulting Group.

The impact of globalisation on India’s job scenario was best explained by statistics on GDP growth vis-a-vis job creation, wherein India posted 6 to 7 per cent GDP growth, while not being able to create sufficient new jobs to match the GDP growth rate. “India needs 15 million new jobs every year, 7 million jobs are being created annually. From a time when manufacturing was perceived as providing jobs while agriculture was the sector perceived to be creating about half of the new jobs, things had changed. With the rise in new digital economy, the ideal new strategy would be one where GDP growth and both, will be at similar levels. Ensuring a ‘future ready’ human resource would be the main challenge going ahead,” she said.

Detailing the changed circumstances, Dr Rajiv Lall, explained that bulk of India’s job creating businesses are in the informal sector - as per 2012 figures, the data suggested 92 per cent of enterprises that created jobs were from the informal sector, and the biggest stumbling block for these was lack of formal credit. The agriculture sector was reducing the number of new jobs being created, while sectors like construction and services had created new jobs. 

The emphasis on agro sector as a driver of growth for the Indian notwithstanding, new jobs created by the agriculture sector had declined over the past years. Rate of in the private sector was higher than that in the public sector, Dr pointed out. “Globally, large scale because of technology had reduced, while in India micro, small and medium scale enterprises have been creating more jobs – the scenario is changing, and we need to be prepared to make changes as would ensure that the declining employment elasticity of GDP growth is dealt with – and growth in continues on a positive note,” he added.

image
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