The government can create a large number of jobs by making infrastructure investment its priority and roping in private sector in it, a report has said.
India faces a crucial policy challenge of ensuring access to adequate employment for its 473 million strong workforce, an IDFC Institute report on "Infrastructure Priorities for Job Creation in India" has said.
"By prioritising infrastructure investment, governments can provide direct employment in large numbers. And they can enable the private sector which is impeded by absent or poor infrastructure," the report said.
It also said that a dynamic private sector is essential for meeting this challenge and the state has an equally critical role to play.
The report uses data from a primary survey of 2,500 enterprises across 18 districts and a model to estimate the number of jobs created as a result of costs saved by firms.
It found that connectivity, in the form of high quality roads, has the potential to catalyse firm growth and spur job creation across different economic geographies.
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"The starting assumption is that urbanisation is crucial for creating jobs. Therefore, by providing infrastructure in areas that have the potential for rapid urbanisation, policy makers can leverage agglomeration economies to boost net employment," the report said.
It said 61 per cent of the firms in the agro-allied region stated that roads were a problem. The second most common problem, cited by 33 per cent of firms, was electricity and around 28 per cent of agro-allied firms identified water supply as an issue.
The report said that the leading infrastructure issue for industrial firms was roads, with 84 per cent of them identifying it as an impediment.
"The second most cited problem was wastewater and effluent treatment (33 per cent), followed closely by water supply (32 per cent). The most cited infrastructure problem for services firms was roads (64.5 per cent), followed by electricity (33 per cent) and water supply (23 per cent)," the report said.