The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Yash Pramod Pilliwar, MBA 2023-25, Vinod Gupta School of Management, IIT Kharagpur
It is said that India has begun to move in the direction of becoming the world’s third-largest economy. Prime Minister Modi has also provided assurance in this regard on the sidelines of the upcoming parliamentary elections. However, as inflation and unemployment, among other issues, continue to rise in the country, there is growing concern. While many industries globally are eager to invest and produce in India, if the country needs to generate more employment, a reserve of 8% growth is necessary, according to former Reserve Bank Governor Raghuram Rajan.
Speaking at an event, Raghuram Rajan stated that to compete with leading countries in the manufacturing sector like China and Vietnam, India needs to train its workforce well. India is making efforts to advance in value systems, and there are some signs of this. However, Rajan also pointed out that it will take time for all components of a smartphone to be manufactured in India, referencing the production of iPhone parts.
We have a large number of young people who need employment, India’s current economic growth of 6 to 6.5 percent is stronger compared to other countries. However, in comparison to the need for employment, it still seems insufficient. Considering the country’s population and the demand for local employment, there is a requirement for an economic growth of 8 to 8.5 percent. When discussing the need for employment in this context, Raghuram Rajan mentioned that even though there is a substantial youth population with a need for employment, this is still somewhat low.
Meanwhile, the high rate of unemployment is also a matter of concern for Prime Minister Narendra Modi. India’s GDP is higher than that of other major economies, but it cannot generate sufficient employment for millions of people. In October, the unemployment rate increased to 10.05 percent, the highest in the past two years. According to estimates by HSBC, India needs to create 70 million new jobs in the next 10 years, and by achieving a 7.5 percent growth, only a third of the unemployment problem can be solved, as stated in a report.
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Reference-
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