India needs to add 7.85 million jobs every year till 2030: Economic Survey

Manufacturing sector witnessed subdued employment growth in the past decade due to issues like bad loans, says Economic Survey 2023-24

India needs to add 7.85 million jobs every year until 2030 to sustain economic growth and social inclusion, according to the Economic Survey 2023-24 released on Monday. The Indian economy still faces a significant challenge in generating adequate employment opportunities, particularly in the non-farm sector, to accommodate its rapidly growing workforce.

Slow growth in manufacturing

India’s workforce is estimated to be nearly 565 million. Of this, agriculture makes up nearly half of the employment in India at 45 per cent, followed by services at 28.9 per cent, construction at 13 per cent, and manufacturing at 11.4 per cent.

In the construction sector, there has been rising prominence due to government infrastructure initiatives. However, the sector predominantly includes informal and low-paid jobs.

 

Meanwhile, the manufacturing sector has seen subdued employment growth in the past decade due to legacy issues like bad loans. The survey, however, observed signs of rebounding since 2021-22.

Agriculture and services continue to be major job creators, with agro-processing expected to be “a fertile sector for job creation”.

More than 50 per cent workers self-employed

Regarding the employment status of workers, 57.3 per cent of the total workforce is self-employed, while 18.3 per cent are unpaid workers in household enterprises. Casual labour accounts for 21.8 per cent of the total workforce, and regular wage/salaried workers constitute 20.9 per cent.

Notably, the female workforce is increasingly shifting towards self-employment, whereas the male workforce's share remains stable. This trend is underscored by the significant rise in the female Labour Force Participation Rate (LFPR) over the past six years, primarily due to rural women entering agriculture and related sectors, which is further elaborated upon in this chapter.

46.7 million additional workers in FY24

In the financial year 2023-24 (FY24), 46.7 million additions to the workforce were recorded, the highest since 1981-82, with a growth rate of 6 per cent. Formal employment data showed over 31 million people joined the formal workforce for the first time, with 21 million joining the Employees’ State Insurance Corporation and 10 million joining the Employees’ Provident Fund (EPF) Scheme.

Addressing the skill gap

Other challenges that India faces include reducing the skill gap in the workforce. Approximately 65 per cent of India's population is under 35, with many lacking modern economic skills. Only about 51.25 per cent of the youth are deemed employable. While this is a significant improvement from 34 per cent a decade ago, it still needs to be addressed, especially as market and skills demands evolve. The survey also found that formal vocational training has been received by only 2.2 per cent of persons aged 15-59 years, with 8.6 per cent receiving non-formal vocational training.

To address these challenges and meet the employment targets, India needs to:

• Foster faster growth of productive jobs in organised manufacturing and services sectors.
• Enhance productivity in agriculture.
• Implement robust coordination mechanisms for skill development programmes.
• Update and align skill curricula with industry needs.
• Promote vocational training and apprenticeship programmes.
• Encourage entrepreneurship through better access to finance, mentorship, and integration into the formal education system.
• The government's initiatives and policy adjustments will play a crucial role in ensuring that India's vast and young workforce is effectively utilised to drive economic growth and development.