Economic survey urges need to create 78.5 lakh non-farm jobs in India

The Economic Survey 2023-24 was tabled in Parliament on Monday, July 22nd, 2024, propagated that the Indian economy needs to generate around 78.51 lakh non-farm jobs annually, in the non-farm sector to meet the growing demand and population growth. 

As per the economic survey reports for 2023-24, it highlights that India’s workforce is nearly 56.5 crore, with more than 45 per cent employed in agriculture, 11.4 per cent in manufacturing, 28.9 per cent in services, and 13.0 per cent in construction. “The Indian economy needs to generate an average of nearly 78.5 lakh jobs annually until 2030 in the non-farm sector to cater to the rising workforce,” said the survey.

According to the survey, there is a chance to enhance the current Production Linked Incentive (PLI) program, which aims to create 60 lakh jobs over a five-year period, the MITRA Textile plan, which creates 20 lakh jobs, and MUDRA scheme, while also supporting their execution. The government intends to take action to meet national demands while keeping the job scenario in mind. These measures will address issues related to the labor market, artificial intelligence (AI), gig work, and climate change, among other things.

The survey further suggested that state governments can grease the wheels of hiring by easing the compliance burden and reforming laws on land. “Concurrently, the employment landscape is fast changing worldwide, and India, aspiring to be a developed nation by 2047, must partake in the massive reshaping of jobs that AI has and is likely to further spin off,” it added. It also noted that the impact of automation on workers being complex and uncertain, the direction of technological change remains susceptible to forces of political economy. “India thus needs to invest in research and steer the AI bandwagon towards shared prosperity,” it suggested, adding that something as basic and age-old as unpaid care work needs attention too

It went on to say that no one of working age would look for employment. A portion of them will work for themselves, and some of them will also be employers. This is followed by an estimation of the annual rise in job creation required to cater to the expanding working age population, rising female participation in the labour force, and labour shifting out of agriculture. Next, the agro-processing sector is proposed as a fertile sector for job creation in a pragmatic and decentralised manner.

According to the Survey, economic growth is more about creating livelihoods than it is about jobs. All levels of government and the corporate sector will need to work together. The survey also laid emphasis on the private sector’s role to create employment in the country, saying that in more than one respect, the action lies with the private sector. “In terms of financial performance, the corporate sector has never had it so good. The results of a sample of over 33,000 companies show that, in the three years between FY20 and FY23, the profit before taxes of the Indian corporate sector nearly quadrupled,” the survey noted.

According to the report, the workforce’s percentage of workers in agriculture will progressively drop from 45.8% in 2023 to 25% in 2047. The BPO industry poses a special risk since chatbots powered by GenAI are revolutionizing the way everyday cognitive activities are performed. Over the next 10 years, employment in this area is expected to shrink significantly.

As seen by the nation’s digital public infrastructure, India’s populace is accustomed to using technology, therefore the Economic Survey points out that industry and government action can position India as a major player in the AI era.

An estimate of the annual increase in employment creation needed to support the growing working-age population is then provided, along with increased female participation in the labour force, and labour shifting out of agriculture. Next, the agro-processing sector is proposed as a fertile sector for job creation in a pragmatic and decentralised manner.

The Growing Importance of Non-Farm Jobs in India’s Economic Future

Keeping the country’s economy in view, the survey also noted that nominal GDP grew 9.6 per cent y-o-y to Rs 295-lakh crore. “Hiring and compensation growth hardly kept up with it. But, it is in the interest of the companies to step up hiring and worker compensation,” the survey stated. Besides, the survey also provided a broad estimate of the number of jobs (78.5 lakh annually) that the economy has to generate. “Everyone in the working age will not seek jobs. Some of them will be self-employed and some of them will be employers too. More than jobs, economic growth is about generating livelihoods. The governments at all levels and the private sector will have to strive together for it,” it said. 

However, the survey pointed out that the rising employment of flexi workers through staffing companies can be a channel for ensuring social security for informal workers. “There remain long-existing challenges of formalising a burgeoning workforce, facilitating job creation in sectors which can absorb workers shifting from agriculture, and ensuring social security benefits for those in regular wage/salaried employment,” it said.

The paper stated that the gig economy is changing the nature of employment. Based on data from the National Labor Force Survey, NITI Aayog has estimated that 77 lakh workers were part of the gig economy in 2020–21. The Economic Survey 2023–24 projects that by 2029–30, the gig workforce will have grown to 2.35 crore, accounting for 6.7% of India’s non-agricultural workforce and 4.1% of the country’s total income.

The poll went on to state that one potential consequence of climate change has been employment losses. Acknowledging climate change as an unavoidable aspect of the modern era and anticipating a rise in the frequency and severity of extreme weather occurrences, the Survey also notes its accompanying consequence as the possible loss of jobs and productivity.  The poll indicated that the corporate sector in India is expanding. Profits in India’s business sector quadrupled between FY20 and FY23, reaching a 15-year record in FY24.

It states that companies owe it to themselves to ensure that labor and capital are deployed in an appropriate ratio. In the midst of their excitement with AI and concern of losing their competitive edge, businesses need to remember that they are responsible for creating jobs and that this has an effect on social stability.

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