India Needs 18% GDP Growth To Meet Current Job Demands

In the latest report (State Of India’s Livelihood) released by the ACCESS department, India would require a GDP growth rate of 18% to ensure that the growing job demands are met.  The study underlines the shift of people from agriculture to low paying jobs. It brings attention to the fact that people are shifting from agriculture at a faster pace than expected and are not shifting to the manufacturing sector as anticipated. 

Highlighting the need for new job creation, the report also states that even though there are 63 million MSMEs (Micro, Small and Medium Enterprises), they have a turnover of less than ten million and hire less than 20 employees. Apart from this, the report also highlights the fact that 32% of firms in the micro sector have 2-3 employees only, while the companies with 4 workers comprise 6-7 % of the micro sector landscape. This statistic states that even though there is a large potential in the micro sector, the impetus of this sector is still to be realised.

Dr. Orlanda Ruthven, one of the authors of the report commented on the current trends of the job market and stated that people are attracted towards the formal sector for entry-level recruitment considering them as a better paying job option. This was only true when the only companies in the formal sector were public sector firms or a few blue chip companies. 

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According to the Secretary of MSME, Mr BB Swain, a lot of new jobs are being created in the urban industrial centres, but there is a need to improve the contractual arrangements to improve the company’s functioning.

The report suggests that the micro sector should be seen as the main driver of employment as it can help us bridge the rural-urban imbalances and provide a platform for new and improved job creation with exponential growth opportunities. 

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