Job creation is going to be one of the biggest challenges for the nation in the New Year as it is failing to keep pace with India’s impressive economic growth.
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Job creation is going to be one of the biggest challenges for the nation in the New Year as it is failing to keep pace with India’s impressive economic growth. India is lagging behind in terms of creating 10 million jobs in the formal sector every year which is required to match the growth rate. Beyond doubt, creating such a huge number of jobs is not an easy target, especially when uncertainties prevail worldwide amidst growing tariff war. Furthermore, India has opened its economy to attract foreign investment in the early nineties, discarding the mixed economic policy followed after Independence. As a result, the number of employment opportunities in public sector undertakings (PSUs) has reduced considerably due to the disinvestment policy followed by the government since the introduction of the new economic policy. The problem has further aggravated as the private sector has not made any substantial capital investment since the COVID pandemic despite availing various sopsoffered by the government from time to time. All these factors have made job creation more difficult in the formal sector.
So, the onus will be on our policymakers to accommodate the country’s workforce to bring down the unemployment rate further from the present 3.2 per cent. As per the economic survey 2024, India needs to create 7.85 million non-farm jobs per year till 2030 to maintain the present growth momentum. In such a situation, a proactive private sector can play an important role by making capital investments. But for reasons best known to them, the Indian private sector has not shown any inclination to make capital investment in the country during the last couple of years. Instead, it has chosen investor-friendly foreign locations for better return. It is time for the government to convince them to invest in the country so that the country’s impressive growth rate continues till it realizes its dream of becoming a developed nation.
At the same time, the policymakers should draw plans to make the existing industries more efficient and competitive to enable them to absorb more workforce. In this context, it should make enough provisions to impart training in skill development for the unskilled workforce; otherwise, a vast section of the Indian workforce will have to sit idle in absence of proper training. If they do not acquire skills, India’s unemployment rate will not come down sufficiently. It may be mentioned here that over the years the job market has undergone a sea change globally as it now requires persons with specific skills for employment, leaving very little space for the unskilled workforce to occupy. The situation has become more puzzling with the advent of artificial intelligence (AI) as the new advancement of science is threatening to shrink employment space even for the skilled labour force. Thus, India’s immediate challenge is to utilize its vast workforce properly to match the employment rate with the growth figures as jobless growth will not be able to take us to our desired destination.