Non-farming jobs critical to India’s growth, says report
Sustaining growth will be vital to India in achieving its Gross Domestic Product (GDP) goal.
In a featured post by Business Standard, they state the rising urbanisation that creates jobs for the ever-growing pool of workers, will be the main solution to maintain economic growth.
Based on the report’s estimation, India will have to create nearly 115 million jobs outside of agriculture in the coming years to be able to maintain its steady growth.
It is forecasted that by 2030 the country will be 41% urbanised, which will be 31% higher than the urbanisation rate in 2011. Primarily cities and satellite towns where their workforces will be focused on providing services will drive the aforementioned figure.
At present, India operates mostly as a service-based economy, with the BPO and manufacturing industries growing in numbers year on year. FXCM said the country’s service sector accounts for 45% of the country’s GDP, while service jobs account for 31% of India’s overall workforce.
Large international companies are now moving their services to India. Tech giant Apple announced that they are moving their iPhone manufacturing warehouses to the country and it will start the process in the coming months. This is the goal of Prime Minister Narendra Modi’s ‘Make in India’ project, an initiative that promotes the manufacturing sector in the nation.
As China continues to prosper, India is positioning itself so that it can grab a huge chunk of the former’s low-end manufacturing sector. Economists argue that since these jobs require relatively low skills, the labour-intensive manufacturing industry can facilitate the shift from their traditional farming jobs.
While India remains one of the agricultural hotbeds of the world, other important products will be deemed imperative to its economical growth, such as the exploration of petroleum and its growing pharmaceutical industry. India’s pharmaceutical sector is projected to grow by considerably in size by 2020.
“The scale and complexity of the market is increasing as India is moving towards the global top tier,” said Palash Mitra, Partner at McKinsey & Company, and Leader of the Pharmaceuticals & Medical Products Practice in India.
The fast economic growth over time will radically transform some Indian cities which could reach the size of the current middle-income nations.
For example, India’s capital (Delhi) will be equal to that of the Philippines, while Mumbai will become the equivalent of Malaysia with a large market opportunity of $245 billion.
Even though there is plenty of skepticism surrounding the projected GDP numbers, India is still on course to be one of the fastest growing emerging economies in the world by 2020.
The country is projected to grow at 7.7% from 2016 to 2020. It will significantly outpace other emerging countries, such as China (6.4%), Brazil (2.2%), and Turkey (3.3%).
“India will be the world’s fastest growing economy during the next five years as China’s economy cools and growth elsewhere sputters, but internal tensions over inequality and religion will complicate its expansion,” based on the US Intelligence report.
While the creation of non-agricultural jobs can administer India’s economic growth, it does not guarantee millions of Indians living on the poverty line a decent life in the near future. The nation still needs to improve their policies and projects related to environment, health, and education while generating funds to enhance healthcare, sanitation and water filtration.