To reduce its rate of underemployment and unemployment, India will need to create 10 million jobs per annum till 2030. As per a research report by Motilal Oswal, this roughly translates to 0.83 million or 830,000 jobs every month for the next 12 years.
The labour force in the Indian economy is estimated to increase by eight million per annum over the next 15 years. However, this is only a fraction of the total job requirement in the economy. Comprehensive estimates of annual jobs needed must include one’s assumptions about underemployment in the economy.
"Our calculations suggest that there are about 29 million underutilised workers in India, another four million discouraged females currently out of the labour force due to non-availability of work, and another three million workers looking to shift to a regular wage-paying/salaried job," the Motilal Oswal research report states.
Together, it said that these imply underemployment of about 36 million or around four percent of the population aged above 15 years.
This implies that if the economy wants to eliminate almost all underemployment by 2030, and its unemployment rate and labour force participation rate (LFPR) remains unchanged, the economy needs to create 10 million jobs per annum – or 0.83 million jobs per month – up to 2030.
As per the International Labour Organisation's projections, if LFPR remains unchanged at 53.9 percent in the future, the Indian economy will add about 8.8 million people to the labour force every year in the five years ending 2020, while it will fall to 7.6 million persons per year in the 20s.
The government itself targets creation of 100 million manufacturing jobs during the seven-year period ending 2022, implying annual jobs creation of about 14 million. However, the Motilal Oswal research report sees a requirement of more than one million jobs per month. This has become a rule of thumb, which seems difficult to achieve.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
