More and better jobs
India is a youthful nation with a median age of 27.6 years. Our working age population will increase from approximately 761 million to 869 million during 2011–2020. If more of our young people start working and earning, our economy will take off, and we will encash a ‘demographic dividend.’ But for that to become a reality, India needs to create large numbers of jobs for the 12.8 million youth who enter the work force every year. Recent data indicate that India’s ‘demographic dividend’ will probably last only one generation. Therefore it is imperative that we do not miss this crucial window of opportunity.
A recent report by McKinsey and Company indicates that India’s employment story is witnessing a transformation. Workers are moving from farm jobs to non-farm jobs such as construction and manufacturing. Between 2011 and 2015, the number of agricultural jobs declined by 26 million while the number of non-farm jobs increased by 33 million. That means a net addition of 7 million jobs in this time period.
An earlier report by the National Institute of Labour Economics Research and Development (NILERD, formerly Institute for Applied Manpower Research) indicated that between 2004-05 and 2011-12, 52 million non-farm jobs were created. In this time, 36.7 million people left agriculture. Net increase in jobs was 15.3 million.
Both the McKinsey and NILERD reports show that India’s job market is transforming. However, far more jobs need to be created to keep pace with changes in population and the labour force.AIPC Position
- AIPC will create awareness about the importance of sustained and high economic growth.
- Support the creation of an investment climate that applies best practices from around the world.
- Advocate for modern infrastructure that will underpin economic development and job creation.
- Lobby governments at central and state levels to use taxpayer money effectively and efficiently and not continue to operate perennially loss making public enterprises.
- Focus efforts on a supportive environment for micro, small and medium enterprises (MSMEs) in terms of access to credit, basic public infrastructure, end of predatory regulatory environment, and full freedom to innovate.
- We need a modern approach to rural-urban transition. Our cities will become ungovernable, and perhaps unlivable, if we do not address the decay in our cities. As more Indians live in cities and suburbs, a new model of governance is required. The AIPC will propose new models of urban governance.
- We need a more progressive tax system. The professional class pays its taxes and has few means to reduce its tax liability and even fewer means to ensure taxes are spent well. Big businesses and wealthy people manage to get tax breaks making their effective tax rate lower than that paid by professionals. On the other hand, many well-off people remain out of the tax net. This must change.
- India must maintain an open stance on foreign investment and also to greater interactions between our economy and the global economy. We must resist protectionist elements within and outside India because we have more to gain by being open and inclusive.