India requires about 55 million additional jobs by 2015 to maintain its current ratio of employed to total population at 39%, research firm Crisil said today.
In a report 'Employment in India: Uneven and Weak', Crisil said the country has to nearly double the job creation rate, witnessed during 2005-10, to achieve this number.
Net addition of jobs during 2005-10 was 27.7 million as compared to 27.2 million jobs created in 2000-05.
"Job creation has clearly not kept pace with the GDP growth. The GDP growth increased to 8.6% during 2005-10 from 6% during 2000-05, but the net addition to jobs remained almost flat at around 27 million during the two time periods," Crisil Chief Economist DK Joshi said.
He also said that combined with a decline in the number of self-employed persons, this sharply reduced the employment intensity (number of persons per lakh of real GDP) to 1 in 2005-10 period from 1.7 in the preceding five years.
The study -- based on National Sample Survey Organisation (NSSO) data on employment -- also said that generating 55 million jobs would pose an overwhelming challenge without appropriate policy support.
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It also said that employment potential of fast growing manufacturing and services sector could not be fully exploited due to the lack of enabling policy environment.
"In manufacturing, which is a crucial source of jobs for relatively low-skilled labour, [jobs] declined by 7% despite a faster growth in manufacturing output," Crisil said.
It also pointed out that employment growth in financial intermediation and business services slowed down during 2005-10 period.
However, job creation was up by around 70% in the construction sector, mainly comprising up of casual jobs.
The report said that there was a decline in number of self employed people by 25.5 million in 2005-10 period as compared to an increase of 65.5 million in the preceding five years.
Similarly, around 65% of the total jobs were created in rural areas during this period.
Referring to job creation patterns, it said that high economic growth alone would not be able to create jobs as it required appropriate policy measures in this regard.
"The role of policy assumes greater importance now since the weak growth in advanced countries is likely to hurt job growth in export-oriented sectors in India," Crisil said.
The agency said that policy gridlock in labour reforms remained the primary cause of insufficient labour demand in manufacturing. In financial intermediation and business services, labour supply had not kept pace with growing demand due to shortage of highly educated skilled labour.