A United Nations Development Programme (UNDP) report released on Wednesday says India faces the challenge of creating jobs for a growing population over next 35 years. The report said that between 1991 and 2013, the size of the “working age” population increased by 300 million. India’s economy could absorb less than half of those new entrants into the labour market.  Only 140 million people got employed in that period, which points towards the economy’s limited capacity to generate jobs. The report notes that employment growth has been lower in 2009-10 and 2011-12.

According to labour ministry data, around 1 million people enter the workforce in India every month. By 2050, at least 280 million people will enter the job market, the report estimated. Confronted by the lack of jobs, many choose to study more, the study said. At any given point, around 30 million students are pursuing higher education in India.

The economy in India and its neighbouring countries has a considerable share of people working but earning below the international poverty line, and their numbers are likely to escalate with more entrants into the labour force if current employment shortfalls continue.

UNDP said countries such as India, with large low-income populations, big agriculture sectors, should focus on manufacturing sector to create jobs. “This switch has been key to high job growth in China, leading to a significant decline in poverty. In India, in contrast, the manufacturing base is still small, contributing to only 15% of GDP and 11% of employment,” the report said.

The report, “Shaping the Future: How Changing Demographics Can Power Human Development”, however notes that Asia-Pacific countries now have more working-aged people and fewer dependents than at any point in history, providing a springboard for growth.



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