Expand manufacturing, services to boost job creation: Nirmala Sitharaman

However, she pointed out that adequate skilling is a problem being faced by the service sector in India

India has adopted a two-pronged strategy to boost employment generation in the country, the government said on Friday.

"The government has adopted a two-pronged strategy to boost job creation that consists of expanding the manufacturing base, which is necessary for a large absorption of the labour force, as well as emphasising on services, which already makes the major contribution to India's GDP," Commerce Minister Nirmala Sitharaman said at the ET Economic Conclave here.

"In this we are looking at the prospect of a large exodus of people from agriculture who need to be equipped with the basic skills so they can join manufacturing," she added.

In reply to a question, Sitharaman said that in her opinion India is not in a situation of overemphasising on manufacturing.

"I dont' think there is any overemphasis on manufacturing in India, because we do need a manufacturing base, which has to be widened from the current 13-14% level to 22-25%," she said.

"We need to focus on manufacturing that can absorb large manpower. But not just big industry, we are looking also at SMEs as avenues of job creation," she added.

The minister said that at the same time the thrust also had to be on services, the share of which to India's Gross Value Added (GVA) was over 53% in 2015-16.

"We also have to emphasise on the services that is already contributing so substantially to our GDP," the Commerce minister said.

She pointed out, however, that adequate skilling is a problem being faced by the service sector in India.

"The government is, therefore, investing in a major way in skill development," she said.

"The nature of engagement on services will have to be restructured," she added.

Making his intervention at the conclave, Power Minister Piyush Goyal pointed out that the government's programme of job creation has to be measured in terms of the "holistic impact" of the various official schemes such as Digital India, Skill India, Clean India and of reforms such as the Goods and Services Tax (GST).

"Even something like demonetisation contributes to this because it is designed to provide equal opportunities to every citizen, and check anti-social tendencies of cheating and tax evasion," Goyal said.