The Economic Survey 2023-24, released by the Finance Ministry, reveals that India must generate nearly 78.51 lakh jobs annually in the non-farm sector to accommodate its growing population.
This urgent call to action is based on the current employment distribution among India’s 56.5 crore-strong workforce, where 45% are employed in agriculture, 11.4% in manufacturing, 28.9% in services, and 13% in construction.
Surge in Female Workforce and plummeting unemployment
The survey brings encouraging news about India’s labour market. Over the past six years, female labour force participation has surged from 23.3% in 2017-18 to 37% in 2022-23, largely driven by rural women.
Additionally, the unemployment rate has dropped to a notable 3.2% in 2022-23, indicating significant recovery from the pandemic’s economic impact.
Key job creators: Services and Construction
The services sector continues to be a major employment generator. However, the construction sector is rapidly gaining prominence, thanks to the government’s focus on infrastructure development. The survey emphasizes the critical need for policy measures that promote job creation and skill development to meet the rising employment demands.
Balancing act: Technology and labor
As artificial intelligence becomes increasingly prevalent in economic activities, the survey highlights the necessity of balancing technology deployment with human labour. It identifies agro-processing and the care economy as promising sectors for creating and sustaining quality employment, suggesting that employers must make careful technological choices to ensure collective welfare.
Skill Development amid regulatory hurdles
The ‘Skill India’ initiative has seen a significant uptick in participation, reflecting the government’s emphasis on skill development. Nonetheless, regulatory challenges—such as land use restrictions, building codes, and employment limits for women—continue to hinder job creation. The survey underscores the importance of removing these obstacles to boost employment opportunities and enhance female workforce participation.
Strategic focus for sustainable growth
The survey outlines several key policy areas for short to medium-term focus. These include job and skill creation, maximizing the agricultural sector’s potential, addressing bottlenecks in Micro, Small, and Medium Enterprises (MSMEs), managing the green transition, and improving the health quality of India’s youth.
The growth strategy is built on six pillars: boosting private investment, expanding MSMEs, leveraging agriculture’s growth potential, securing financing for green initiatives, bridging the education-employment gap, and enhancing state capacity and capability.
Path to long-term economic growth
Looking ahead, the survey projects that the Indian economy can sustain a growth rate of over 7% in the medium term, provided there are continued structural reforms and a concerted effort between the Union Government, State Governments, and the private sector. This collaborative approach is deemed essential to building on the progress made over the past decade.
