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India will require approximately 10 million new jobs each year from FY25 to FY30 to maintain an average GVA (Gross Value Added) growth of 6.5 per cent annually, according to a Goldman Sachs report.
Incentivizing affordable housing developments could stimulate the real estate sector, which employs over 80 per cent of the labor force within construction. This would provide a significant boost to job creation across various skill levels. Establishing IT hubs to tier-2 and tier-3 cities and Global Capability Centers (GCCs) in smaller cities would reduce pressure on Tier-1 urban centers and increase job opportunities in underserved areas. Shifting fiscal incentives toward labor-intensive manufacturing sectors, such as textiles, food processing, and furniture, could support job creation for low- to middle-skill workers. While the government's Production-Linked Incentive (PLI) schemes have primarily benefited capital-intensive industries, Goldman Sachs notes an encouraging shift towards more labor-intensive sectors, including textiles, footwear, toys, and leather goods. This approach aims to align India's manufacturing sector with broader employment goals, as about 67 per cent of manufacturing jobs reside in labor-intensive fields. Over the past two decades, India added approximately 196 million jobs, with two-thirds of these positions created in the last decade. Significant shifts have occurred as more workers have transitioned from agricultural to construction and service roles. Construction remains a primary driver for employment in India, accounting for roughly 13 per cent of total jobs. Investment in real estate and infrastructure has not only created jobs but has also positively impacted income levels across low- to medium-income households. Similarly, the services sector, which contributes about 34 per cent of total employment, has expanded significantly. Notably, the retail trade segment has benefited from digital transformation, as retailers shift to online platforms, generating new roles in areas like inventory management, packaging, and delivery services. An increase in India's Labor Force Participation Rate (LFPR) from 50 per cent in FY18 to 60 per cent in FY24 has been driven largely by female participation, particularly in rural areas. Factors contributing to this rise include improved measurement practices, greater financial inclusion through credit schemes targeting women, and expanded opportunities in small and micro-enterprises. India's demographic transition offers a unique 20-year window to capitalize on a low dependency ratio, with a sizable working-age population set to enter the labor market. (ANI)
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