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India needs to capitalise on a 20-year window of favourable demographics and increase per-capita income levels as in next two decades, the dependency ratio of the country will be one of the lowest among major economies, Goldman Sachs said in a recent report.
The report says that in these two decades the population structure is especially favourable for economic growth. In this time period, India will have a high proportion of people in the working age group compared to dependents (young and elderly). This situation is ideal because more people can work, produce, and contribute to the economy which can lead to higher overall wealth, the American multinational investment bank and financial services firm said. It further added in the report that it's crucial for India to create jobs, improve education and skills, invest in infrastructure, and encourage industries that drive growth. The report said that 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. Incentivizing affordable housing development could stimulate the real estate sector, which employs over 80 per cent of the labour force within construction. This would provide a significant boost to job creation across various skill levels. Establishing IT hubs in tier-2 and tier-3 cities and Global Capability Centers (GCCs) in smaller cities would reduce pressure on Tier-1 urban centres and increase job opportunities in underserved areas. Shifting fiscal incentives towards labour-intensive manufacturing sectors, such as textiles, food processing, and furniture, could support job creation for low-to middle-skill workers. The report said that 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. (ANI)
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