New Delhi, Dec 12 (UNI) The increase in employment in India is primarily due to the rise in self-employment, while transition to a skilled labour force has been slow, said a report by NCAER. Strengthening employment opportunities in labour-intensive manufacturing and services sectors could help sustain GDP growth at around 8 per cent, consistent with the vision of Viksit Bharat, it said.
The study titled ‘India’s Employment Prospects: Pathways to Jobs’, was released by the Vice Chairman of National Council of Applied Economic Research, Manish Sabharwal, and authored by Professor Farzana Afridi and her team of researchers at NCAER. It further underlined the role of skilling and small enterprises as key drivers of job creation in the country. It further highlights the need to overcome bottlenecks in increasing both the quality and quantity of workforce participation and labour productivity.
Speaking on the report, Sabharwal said, “India is on track to become the world’s 3rd largest economy, and while its per capita GDP currently ranks 128th, this highlights valuable opportunities to prioritise employment and inclusive growth.” “India’s self-employment dominance is due to economic necessity rather than entrepreneurial dynamism. Just like small farmers, most of the small enterprises function at subsistence level. India must confront the reality that its employment future is tied to the productivity of its smallest enterprises,” said Prof Afridi.
The main challenge is that the unincorporated household enterprises operate with low levels of capital, productivity and technology adoption. “Enterprises using digital technologies hire 78 per cent more workers as compared to those not using tech. Even 1 per cent increase in access to credit increases expected number of hired workers by 45 per cent,” said the lead author.
The report finds a strong link between technology, access to credit, and job creation. Enterprises using digital technologies employ 78 per cent more workers than those that do not, while even a 1 per cent increase in access to credit can raise the expected number of hired workers by 45 per cent.
On the supply side, the study stresses the importance of upskilling the workforce, particularly in the context of emerging technologies and artificial intelligence.
It notes that while medium-skilled jobs dominate employment growth, especially in services, manufacturing remains largely low-skill intensive. The report estimates that increasing the share of skilled workers by 12 percentage points through formal skilling initiatives could raise employment in labour-intensive sectors by over 13 per cent by 2030.
Under a moderate growth scenario, simulations suggest that a 9 percentage point increase in the formally skilled workforce could generate about 9.3 million jobs by 2030.
Discussing the findings, Dr GC Manna, Senior Advisor at NCAER, said the report identifies key sectors with strong potential for employment growth.
Professor Aditya Bhattacharjea, visiting professor at the Institute for Studies in Industrial Development, noted that the study places India in an international context and highlights opportunities for better alignment with global benchmarks. The report also estimates strong multiplier effects from inter-sectoral linkages. Moderate growth in gross output of labour-intensive sub-sectors could result in a 53 per cent increase in jobs in textiles, garments, and related manufacturing industries, and a 79 per cent rise in employment in trade, hotels, and allied services by 2030.
