Job creation set to be a tougher task

Mumbai: India’s oft-quoted demographic dividend — young working population compared to other countries  — may turn out to be a nightmare for the policy makers as a report suggests that the the country may not create enough jobs for the youth by 2022.

According to Kotak Institutional Equities, employment in industry and services would have to grow between 5.2 and 5.9 per cent annually to meet even the new lower estimates of employment creation.

This estimate was arrived at even after the number of working population in the country in 2022 was brought down to 57.5 crore, which is nearly eight crore less than the earlier estimate of 65.4 crore. The new estimate was made after a review of a set of 24 industry reports commissioned by the National Skills Development Council (NSDC).

The record of job creation in the country, however, is woeful if the meagre information put out in its quarterly report by the labour bureau of the ministry of labour and employment is any indication.

The trend of job creation over the last two years until September 2015 in the eight sectors that they track shows cumulatively, an estimated seven lakh net jobs were created over two years. Six of these eight sectors, as the report said, are expected to annually create 36 lakh jobs.

In agriculture, the earlier estimate pegged Indians employed in agriculture at 11.4 crore (or 18 per cent of the workforce) by 2022; the new estimate is 21.6 crore (38 per cent), which is still a large chunk of population. If this turns out to be true, it would be a failure of successive governments policies to reduce dependence of rural population of low-margin farming, which is still dependent on erratic monsoons.

Due to this significant exodus from agriculture, the new jobs required to be created has fallen to 1.59 crore a year from the earlier 2.36 crore a year.