India will need more formal and quality jobs to ensure better income distribution as it becomes a $5 trillion economy in the medium term and advances toward its long-term goal of embodying Viksit Bharat or a fully developed nation by 2047, according to a new report.
The government’s focus on expanding the manufacturing sector is critical, as transitioning workers into this sector increases the likelihood of securing formal employment, given that 51.4 per cent of manufacturing jobs are salaried ones, according to a Deloitte report.
This shift will significantly enhance income stability for those currently lacking regular wages or social security, particularly in rural areas.
Moreover, the growth of the services sector will aid job formalisation, encouraging workers to pursue formal education and enhance their skills.
The rise in emerging industries such as semiconductors and electronics will further create opportunities that require advanced education and specialized skills, driving the creation of more high-quality jobs.
“Additionally, India’s push toward clean-energy alternatives is set to generate green jobs across various sectors, including energy, agriculture, tourism, and transport,” the report mentioned.
One of India’s greatest strengths is its young, aspiring population. Researchers have a consensus that the ability to learn decreases with age, suggesting that younger people are more likely to learn new skills relatively quickly.
One study found that younger minds and brains are intrinsically more flexible and exploratory. This positions India to gain rapid and substantial returns from investing in skill development.
Recognising the potential of youth, the government recently announced initiatives to drive paid internship programs and provide education loans for higher education.
“These will go a long way in improving the employability and skills of the Indian youth. Encouragingly, many states also strive to become significant players in the growing Indian economy, and they are actively investing in formal job creation and skill development,” according to the rpeort.
While there may be a lag before the labour market data fully reflects these efforts, the benefits will undoubtedly begin to surface in future surveys.