India Needs to Create 115 Million Jobs by 2030, Natixis Report Reveals

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A report released by Natixis SA on Monday highlights the pressing need for India to generate 115 million jobs by 2030 to accommodate its burgeoning workforce.

The report underscores the necessity for substantial growth in both the services and manufacturing sectors to sustain the country’s economic momentum.

The Job Creation Challenge

India’s growing population poses a significant challenge in terms of job creation. According to Natixis SA, Asia’s third-largest economy will need to produce 16.5 million jobs annually, a substantial increase from the 12.4 million jobs created each year over the past decade.

Trinh Nguyen, a senior economist at Natixis, emphasized that 10.4 million of these new jobs should come from the formal economy. “To achieve this herculean task, India’s growth engine needs to fire on all cylinders, from manufacturing to services in the next five years,” Nguyen wrote in her study.

Economic Growth and Youth Unemployment

Despite India’s expected economic growth rate of over 7% this year, one of the fastest globally, this pace may not suffice to provide employment for the nation’s 1.4 billion people.

High youth unemployment remains a significant issue for Prime Minister Narendra Modi, who is seeking a third term amidst ongoing national elections.

The Manufacturing Sector as a Key Solution

Nguyen pointed out that while the services sector contributes more than half of India’s GDP, it offers limited opportunities in terms of headcount and labor quality. Consequently, India must leverage its manufacturing sector to compete with companies and countries aiming to diversify away from a China-centric supply chain.

“The incoming administration needs to jump on the manufacturing train and capitalize on demographic and geopolitical tailwinds,” she added. “Even if the road forward is challenging, it is never too late to walk down the right path.”

Government Initiatives to Boost Manufacturing

To address these challenges, the Indian government has launched initiatives such as the “Make in India” campaign and the Production Linked Incentive (PLI) Schemes. These programs aim to boost domestic manufacturing, attract foreign investment, and create employment opportunities.

The “Make in India” campaign, launched in 2014, seeks to position India as a global manufacturing hub by encouraging both domestic and international companies to invest in the country. This campaign promotes ease of doing business, simplifies regulations, and provides incentives across various sectors.

The PLI Schemes target specific industries such as electronics, pharmaceuticals, automobiles, and textiles, offering financial incentives to manufacturers based on their production output to encourage expansion and job creation.

Enhancing Employability and Skills

Beyond boosting manufacturing, addressing the job creation challenge involves enhancing the employability and skills of the workforce. Efforts are being made to diversify skill sets and equip individuals with the capabilities needed for a rapidly evolving job market, particularly in cutting-edge technologies.

Collaboration between the government, educational institutions, and the private sector is being fostered to bridge the skills gap. Skill development programs, vocational training, and entrepreneurship initiatives are being implemented to empower individuals and increase their employability.

A Comprehensive Approach

While creating 115 million jobs by 2030 is a daunting task, the Indian government’s proactive measures and initiatives demonstrate a commitment to tackling this challenge. By focusing on manufacturing, enhancing skills, and fostering innovation through initiatives like the “Make in India” campaign and PLI Schemes, India aims to build a robust and inclusive job market for its growing workforce.

Through sustained efforts and collaboration from various stakeholders, including the government, private sector, educational institutions, and individuals, India can overcome the job creation challenge and pave the way for a prosperous future.