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HOW can India create Many More Jobs?

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Harnessing the energy of India's growing youth population, requires the generation of Many More Jobs! Complex issues make this a big challenge, but the right AskHOW questions can generate solutions.

Harnessing the energy of India's growing youth population, requires the generation of Many More Jobs! Complex issues make this a big challenge, but the right AskHOW questions can generate solutions.

Published in: News & Politics, Career, Business

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  • 1. HOW can India create Many More JOBS? ! ! The Analysis
  • 2. M ANY M ORE J OBS Many More Jobs are important because…! The population of India is growing, so is the number of youth!! In 2011 1192 million! ! 346 ! 747 98 ! ! ! ! < 15yrs 15-60 yrs 60 yrs+ ! 336 ! ! In 2021 859 143 1339 million! So we need Many More Jobs to harness the energy of the youth!! Else their will be pent up dissatisfaction and possible social unrest. The Analysis Source: Bureau of Population Projections for India & states 2001-2026, Census of India
  • 3. M ANY M ORE J OBS But out of every 100 employable age people …! ! ! In India! 53% 3% 43% ! ! ! ! Employed ! ! 71% In China Unemployed Not looking for Employment! 3% 26% Indians are not even seeking jobs, and hence the AskHOW question …! HOW can we get more people motivated to join the Workforce? ! In technical terms, How do we improve Labour Force Participation Rate (LFPR)? The Analysis Source: Bureau of Labor Statistics, US; http://www.bls.gov/fls/chartbook/2012/section2.pdf
  • 4. M ANY M ORE J OBS With a growing Young Population, the number of New Jobs to be created…! 2 0 01 2 0 06 2 0 11 20 21 20 21 Total Population (millions) 1028 1112 1210 1340 1340 Labour Force (millions) 433 478 484 Current Employment (millions) 403 467 474 at 43%LFPR 576 at 71%LFPR 576 - 474 = New Jobs to be created to match usual past of India: 102 782 782 - 474 = to match China: 308 Hence the AskHOW questions …! HOW can India create 102 million jobs by 2021? ! And can India aspire to create 308 million jobs to match China by 2021? The Analysis Source: Census of India; Report of the Working Group on Employment, Planning & Policy for the 12th Five Year Plan, Planning Commission
  • 5. M ANY M ORE J OBS The Job Growth Track record! 2000: 397 million jobs ! ! ! ! 2005: 457 million jobs ! ! ! ! ! 2010: 460 million jobs ! ! ! ! ! ! Agriculture! graphed on a different scale 2000 2005 2010 ! ! ! AGRI 238 259 243 MFG 44 56 49 CONSTR 18 26 52 TRADE 37 43 42 Others 60 73 74 TOTAL 397 457 460 ! Job growth could have been much better in the period from 2005: 0.12%! The Analysis Source: Report of the Working Group on Employment, Planning & Policy for the 12th Five Year Plan, Planning Commission
  • 6. M ANY M ORE J OBS Observations from the past Track Record numbers…! ! ! ! ! ! Agriculture, the largest ! employment sector, unlikely to produce any incremental jobs; ! Economic activity & Employment in services recent trends suggest contraction. ! sectors such as trade and transportation ! depends on growth in primary sectors, so ! cannot be mainstay of employment creation. ! Bulk of employment challenge must be met via primary sectors such as Manufacturing, Construction, and Exportable Services such as IT / ITES and Tourism ! ! ! The AskHOW question …! How can we generate jobs in Manufacturing, Construction and Exportable Services? The Analysis
  • 7. M ANY M ORE J OBS Suggestions from the Planning Commission … 14 553 9 -6 9 27 498 0 Agri Mining Mfg Utilities 10 2013 0 Constr Trade Transport Oth Svcs 2017 Assuming a 8% GDP growth, the Planning Commission estimates that ~55 million jobs could get created between 2013-2017. Manufacturing would account for 50% of this increase; Construction, Trade and Transportation would be other major drivers.! The Analysis Source: Report of the Working Group on Employment, Planning & Policy for the 12th Five Year Plan, Planning Commission
  • 8. M ANY M ORE J OBS Challenges for creating Jobs in Manufacturing How can we increase investments in labor intensive manufacturing? How can industry get enough land quickly? The Analysis How can youth be trained to work in these industries?
  • 9. M ANY M ORE J OBS One Big Challenge ! Low Informal Sector Productivity While the Informal Sector accounts ! for almost 90% of employment, ! ! ! ! ! ! a worker in the Formal Sector has ! 10 times the output as compared to ! a worker in the Informal Sector! 90% 10% The Analysis Source: India’s Employment Challenge, World Bank, 2010! OECD’s What is Holding Back Productivity Growth in India? Recent Microevidence
  • 10. Analysing Productivity! Out of every 100 people employed in India ! M ANY M ORE J OBS 9 are employed in the Formal sector The Analysis Source: Economic Survey 2012-13
  • 11. Analysing Productivity! While 91 people are employed in the Informal sector ! M ANY M ORE J OBS Agriculture: 50 Unregd Manufacturing: 9! Construction: 10 Others: 22 The Analysis Source: Economic Survey 2012-13
  • 12. M ANY M ORE J OBS If 100 units is the average contribution of everyone,! the contribution by each person from the industries in the Formal Sector is… NOTE: The Square size is proportional to the units of contribution The Analysis Source: Economic Survey 2012-13
  • 13. M ANY M ORE J OBS And this is the contribution by each person from the industries in the Informal Sector… NOTE: The Square size is proportional to the units of contribution 1. AGRI = Agriculture & Allied Services, 29 2. UNREG = Unregistered manufacturing, 58 3. CONST = Construction, 81 The Analysis 4. a. b. c. OTHERS TSC = Transport, storage and communications, 208 WRT = Wholesale & retail trade and hospitality, 140 CSP = Community, social and personal services, 112 5. FORMAL SECTOR a. FIRE = Finance, insurance and real estate, 723 b. PU = Public utilities, 632 c. REGMFG = Registered manufacturing, 395 d. MIN = Mining and quarrying, 339 e. GOV = Government services, 266 Source: Economic Survey 2012-13
  • 14. M ANY M ORE J OBS And, hence the AskHOW questions …! HOW can we move people up the Job ladder, to contribute more value? ! ! ! ! ! ! How can Sectors at the bottom of the ladder, create and make more value? Agriculture & Allied! Services The Analysis Unregistered ! Manufacturing
  • 15. M ANY M ORE J OBS A great High Productivity, Job Creation example ! IT / BPO Services The Analysis Source: NASSCOM’s IT Industry Factsheet
  • 16. M ANY M ORE J OBS IT / BPO Services, ! What did we do right? 1. Skilled Manpower availability from govt and private technical institutes 2. Wage arbitrage and low competition, during formative years 4. Government support: Tax holidays and minimal regulation 3. Largely independent of India’s notoriously poor infrastructure 5. Primarily driven by the harnessing of Entrepreneurial enterprise Overall, the IT / BPO sector demonstrates the economic potential of market forces and entrepreneurial enterprise, given an unshackled environment. ! The resulting dividends for the country are employment, export activity, etc. The Analysis
  • 17. IN CONCLUSION! Please Ask your Lok Sabha candidate A A sk s k H Ho ow w w w In An w. di As a” aly kH on sis ow In Fa ple di as a. c e or b e oo s g ea k r How can we increase investments in labor intensive manufacturing? How can labour and wage laws be simplified? or How can we create ! more jobs in higher productivity sectors? e How can training and higher education be provided to youth?