The Jobs Agenda

Boosting wage growth and creating jobs are sure-shot ways to improve consumption demand. Over the years, it's proven to be an uphill task for India but can the Union Budget 2024-25 change this trajectory?

- SURABHI

HERE'S THE INDIAN dream: A well-paying job in a good company. And to achieve this, students study late into the night, and often dip into family savings. But in recent times, this dream has soured for the millions of workers entering India’s workforce annually. The lack of adequate jobs remains a challenge for policymakers in the country despite the high economic growth rate of 7% and above in recent years.

The issue was a hot topic during the General Elections this year and the expectations are that the upcoming Union Budget will announce at least a few measures to create more employment opportunities.

According to World Bank data, India has a workforce of 593.7 million, with an estimated 90% being in the informal sector. The annual Periodic Labour Force Survey (PLFS) reveals that the headline unemployment rate for workers aged 15 years and above declined to 3.2% in 2022-23 from 6.1% in 2017-18. But a closer look shows that formal employment has remained low.

Recent reports have warned that India may be facing a challenge in creating adequate jobs for all. For instance, the World Bank has highlighted that South Asia, including India and its neighbouring countries, may lose its demographic dividend if it is unable to create jobs. “Sustaining growth will require increasing employment ratios, especially in the non-agricultural sectors and among women, through measures to remove obstacles to growth for businesses, increase openness to international trade, ease labour market and product market restrictions, build human capital, and strengthen equality of women’s rights,” says its recent South Asia Development Update 2024.