India requires an annual GDP growth of at least 9-10% to create enough jobs for the country's growing workforce, while a growth rate of 14% would be needed to include the backlog of unemployed workers accumulated over the years, according to Chetan Ahya, Managing Director and Chief Asia Economist at Morgan Stanley.
While acknowledging the government's push to boost capex and growth, Ahya noted that a coordinated and long-term strategy must be adopted to generate employment opportunities. This is significant as demographic trends offer a massive growth opportunity but also increase the urgency of creating jobs at scale.
Citing an earlier Morgan Stanley report, Ahya told NDTV Profit, "We had analysed what kind of GDP growth India would need to achieve to take care of new additions to the workforce, and that will be around 9-10%."
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He added, "If you want to take care of the backlog—i.e., the working-age population growth we had in the past—and employ them as well, then India needs to have 14% GDP growth."
To address the issue, Ahya suggested setting up a team of around 500 professionals within the Prime Minister's Office to formulate workforce strategies, which would be further supported by a larger execution team of about 10,000 people working at the state government level.
This proposed structure would help to identify sectors with the highest growth potential over the next decade and develop entire supply chains around them to maximise employment generation.
He further mentioned that the government has already adopted such a measure in the electronics manufacturing sector, but noted similar efforts are required across multiple emerging industries. While acknowledging that substantial work is already underway, Ahya said much more remains to be done to fully capitalise on India's demographic dividend and ensure adequate job creation in the country.
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