The Indian economy needs to generate nearly 78.5 lakh jobs annually until 2030 in the non-farm sector to keep pace with the rising workforce, the Economic Survey 2024 has highlighted.

The estimate includes the expected addition to the workforce and the shedding of jobs by agriculture. 

The Economic Survey, tabled in Parliament by Finance Minister Nirmala Sitharaman on Monday, noted that not all in the working age would seek jobs. Some of them would be self-employed and some would become employers.  

More than jobs, economic growth is about generating livelihoods, the survey said. Governments at all levels and the private sector will have to strive together for it.

The survey expects the share of agriculture in the workforce to gradually decline from 45.8% in 2023 to 25% in 2047.

The demand of 78.5 lakh jobs in the non-farm sector per year can be met by enhancing existing schemes such as Production Linked Incentive (PLI generated 60 lakh employment over 5 years), MITRA Textile scheme (20 lakh employment generation) and MUDRA, the survey suggested.

The rising employment of flexi workers through staffing companies can be a channel for ensuring social security for informal workers, it stated.

It pointed out that there remains 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.

Tripartite pact

It further suggested that state governments can grease the wheels of hiring by easing the compliance burden and reforming laws on land. A tripartite compact among the Centre, states and the private sector would help meet the rising aspirations of the population and complete the journey to “Viksit Bharat” by 2047. 

The survey called for governments to relinquish some of their power despite it being highly valued. “The tripartite compact needed for this country to become a developed nation amidst unprecedented global challenges is for governments to trust and let go, for the private sector to reciprocate the trust with long-term thinking and fair conduct...”

Impact of AI in employment landscape

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 (artificial intelligence) has and is likely to further spin off, it suggested.

The impact of automation on workers being complex and uncertain, the direction of technological change remains susceptible to forces of political economy, it noted.

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.

The allocation of Rs 10,300 crore in 2024 for the India AI Mission underscores the government's commitment to strengthening the AI ecosystem.

In their fascination for AI and fear of erosion of competitiveness, businesses have to bear in mind their responsibility for employment generation and the consequent impact on social stability, it said, adding that they must think more critically about how AI can augment labour rather than displace workers. Businesses need to balance the deployment of capital and labour, and ensure fair income shares between the two.

Elderly care

The development of an affordable, reliable, and quality creche and elderly care infrastructure is the Achilles heel for female participation in paid work, which should be determined by comparative advantage and choice rather than dictated by gender, it stated.

New labour code

It noted that the new Labour Codes marginally improved some of regulatory limits (like daily work hours).

However, it stated that the Codes are yet to be fully-operationalised and many states are found to be reintroducing the older restrictions under the new Laws.

It suggested that labour laws need to be reviewed to re-evaluate incentives for employers, with a focus on achieving better outcomes for economic growth and prosperity in the manufacturing sector.

Implementing more flexible labour laws could unleash substantial economic potential, promote gender inclusivity, and attract industrial investment, it stated.

Role of private sector in job creation

The survey stressed on the need for the corporate sector to create jobs, particularly at a time when their profits have soared.  

“Profits had quadrupled between FY20 and FY23. Businesses are sometimes reluctant to make investments citing lack of demand visibility… Privileging capital over labour is inimical to long-term corporate growth prospects,” the survey said.

The private sector financial players need to curb the mis-selling of banking and insurance products.

51% of graduates not employable

About one in two graduates straight out of Indian colleges is not employable, the Economic Survey for 2023-24 pointed out. 

“Estimates show that about 51.25% of the youth is deemed employable. In other words, about one in two are not yet readily employable, straight out of college. However, it must be noted that the percentage has improved from around 34% to 51.3% in the last decade," the survey said.

Gig workers

Highlighting the rapidly growing gig economy in India, the survey projects a significant expansion in the gig workforce to 2.35 crore by 2029-30.

“Gig workers are expected to form 6.7% per cent of the non-agricultural workforce, or 4.1% of the total livelihood in India, by 2029–30,” the Economic Survey said.

“While the gig economy may open up employment opportunities for various sections of workers, including youth, persons with disabilities, and women, a significant issue in the Indian context and globally has been the creation of effective social security initiatives for gig and platform workers,” it noted. “The Code on Social Security (2020) marks a significant advancement by expanding the scope of social security benefits to encompass gig and platform workers.”

The Economic Survey said there existed significant challenges in the Indian apprenticeship ecosystem, such as lack of coordination between education institutions and industry, inadequate infrastructure, gaps in the regulatory framework and the negative perception of vocational training as being inferior to academic education.

“The apprenticeship framework thus needs to be re-calibrated to provide flexibility and negotiability in work hours, compensation and disengagement,” it added.