The road to India’s 8% GDP growth passes through the precondition of increasing the female workforce and by improving labour productivity, says a recent Barclays report.
The report titled, “India’s breakout moment”, says that India can achieve a GDP growth rate of 8% by ensuring that women account for more than half of the new workforce set to be created by 2030. The report also highlighted on the need to improve labour productivity through upskilling to fully utilise its young generation. Current female labour force participation rate (FLFPR) stands at 37%. However, to ensure incremental growth in the Indian workforce, India needs to increase its FLFPR to 43.4% by 2030.
“This means that of the roughly 108 million estimated increase in the labour force, around 55 million (~50%) would have to come from women, which implies only a partial convergence of male-to-female jobs ratio – that is, for every female worker, there would be 1.9 male workers in 2030, versus 2.2 currently,” stated the report.
Growth of non-agricultural jobs
Other than the significance of bringing more women into the workforce, the report underlined the importance of faster growth of non-agricultural jobs to employ surplus labour. It also mentioned the need to bring more formalisation of employment.
Sectors like construction, wholesale, retail trade segments, manufacturing, etc have the potential to generate opportunities for the expanding workforce in the coming years. Sectors like real estate, professional, and financial services, will also provide employment opportunities in the coming years.
Employment generation and labour productivity
Apart from employment generation, a focus on education and skills training in emerging technologies and capital-intensive sectors is required to improve labour productivity and help generate more formal-sector jobs. The report indicated that India’s labour market can increase its share of GDP contribution not “just through a shift away from agriculture, but also through raising labour productivity.”
It also suggested that investment in hard infrastructure/traditional industries would significantly improve labour productivity and will also raise the efficiency of both factors of production, capital, and labour. The report also suggested that sectors such as chemicals, transport equipment, metals, telecom, and business services, can generate more jobs and improve labour’s share in income.
Looking at the focus on large science, technology, engineering, and mathematics (STEM) in the Indian education system, the report also pointed towards the scope to increase employability in the IT sector and technical jobs as “India seeks to build capabilities in the manufacture of semiconductors, hydrocarbons, EV batteries, defence, and climate technology, among other industries.”
Source : Mint
