First, it was President Pranab Mukherjee. Then Railway Minister P.K. Bansal followed. Now, it is the turn of the Government’s Chief Economist Raghuram Rajan to doff his hat to ‘youth’.
Amidst a series of firsts – Pranab Mukherjee’s Presidential address to both houses of Parliament was his first, while the Railway Budget was Bansal’s first and this year’s Economic Survey is Rajan’s first – the Survey too, has scored a first with a chapter titled, ‘Seizing the Demographic Dividend.’
“The future holds good promise for India provided we can seize the demographic dividend, as nearly half the additions to the Indian labour force over the period 2011-30 will be in the age group of 30-49 years,” said the Survey. Also, productive jobs are vital for growth and a good job is also the best form of inclusion, it added.
It said that since more than half of population depends on agriculture but the experience of other countries suggests that the number of people dependent on agriculture will have to shrink if per capita incomes in agriculture are to go up substantially.
“While industry is creating jobs, too many such jobs are low-productivity, non-contractual jobs in the unorganised sector, offering low incomes, little protection, and no benefits. Service jobs are relatively high productivity, but employment growth in services has been slow in recent years,” it explained.
The Survey felt that the challenge is to create the conditions for faster growth of productive jobs outside of agriculture, especially in organised manufacturing and in services, even while improving productivity in agriculture. The benefit of rising to the challenge is decades of strong inclusive growth, it argued.
The Survey expressed concern over the inability of service sector to create enough jobs. It said that in addition to labour regulations, the lack of properly educated and skilled work force was also a factor. Suitable higher education is important for high-end services such as information technology, software development and finance, it suggested.
“Under an assumption of unchanged policies and parameters, even if India’s share of employment in agriculture declines over the next decade as China’s did at a similar stage of development, and even if more youth enter the labour force as we reap the demographic dividend, India may be able to place 99.5 per cent of the labour force in jobs by 2020. This suggests little cause for alarm,” the survey said.