Indian economy needs to create around 78.51 lakh jobs annually in the non-agricultural sector- Economic Survey

The Economic Survey 2023-24, released by the Finance Ministry on Monday, showed that India has a workforce of around 565 million, of which over 45 per cent are engaged in agriculture, 11.4 per cent in manufacturing, 28.9 per cent in services and 13.0 per cent in construction.

The survey also said that India’s female labour force participation has been rising over the past six years and the unemployment rate has been declining. The survey highlights improvements in Indian labour market indicators over the past six years, leading to a decline in the unemployment rate to 3.2 per cent in 2022-23.

The survey said employment has recovered from the pandemic shock in both urban and rural areas. “The female labour force participation rate has been rising for six years, from 23.3 per cent in 2017-18 to 37 per cent in 2022-23, driven mainly by rising participation of rural women,” it said.

Amid the government’s efforts to boost infrastructure, the survey said while the services sector still remains the major job creator, the manufacturing sector has been gaining prominence lately.

To meet the demand of the employment sector amid the growing population, the survey states that the Indian economy needs to create about 78.51 lakh jobs annually in the non-agricultural sector. The net payroll under EPFO ​​has more than doubled in the last five years, indicating healthy growth in formal employment.

On AI, the survey says that as artificial intelligence is becoming more prevalent in various economic activities, it is important to pursue technological options towards collective welfare. Employers should strike a balance between technology and labour. It suggests that agricultural processing and care economy are promising sectors for creating and sustaining quality jobs.

The rise in the number of candidates undergoing skill development through the government’s flagship programmes has given impetus to ‘Skill India’. However, regulatory barriers such as land use restrictions, building codes and limits on areas and hours for women’s employment impede job creation. It is essential to remove these barriers to boost employment and increase the labour force participation rate of women.

The Survey said that the key areas of policy focus in the short to medium term include employment and skill creation, harnessing the full potential of the agriculture sector, addressing MSME bottlenecks, managing India’s green transition, efficiently tackling the sugar conundrum, deepening the corporate bond market, tackling inequality and improving the quality of health of our young population.

The document says, “The growth strategy for Amrit Kaal is based on six key areas. First, there should be a deliberate focus on promoting private investment. Secondly, the development and expansion of India’s Mittelstand (MSME) is a strategic priority. Third, the potential of agriculture as an engine of future growth must be recognised and policy impediments removed. Fourth, financing of India’s green transition needs to be secured. Fifth, the education-employment gap must be bridged. And finally, focused building of state capacity and capability is essential to sustain and accelerate India’s progress.”

According to the survey, in the medium term, if we work on the structural reforms done in the last decade, the Indian economy can grow at a rate of more than 7 percent on a sustained basis. This requires a tripartite agreement between the central government, state governments and the private sector.