India’s employment landscape is undergoing profound transformation. As the country continues its economic ascent, the complexities of job creation across various sectors have become more apparent. The notion that a single, overarching employment strategy can address the diverse needs of India’s workforce is increasingly untenable. Instead, sector-specific plans that cater to the unique challenges and opportunities within each industry are essential for sustainable and inclusive job growth.
At the heart of India’s employment dilemma is the need for quality jobs that offer security and upward mobility. While the sheer number of jobs is important, it is equally crucial that these jobs provide pathways for the unemployed and underemployed to improve their socio-economic status. This is particularly pressing in a country with a rapidly growing workforce, where projections indicate that the employable population will reach nearly 65 per cent by 2040. Agriculture remains the largest employer in India, yet it is plagued by low productivity and inadequate incomes for rural workers. Despite recent job creation in this sector, its potential for long-term employment growth is limited by mechanisation and other technological advancements.
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To sustain rural livelihoods, policies must focus on improving agricultural productivity and transitioning workers to related fields, such as agro-processing and retail services. This shift aligns with broader structural changes in the economy, where labour moves from agriculture to industry and services. The service sector, on the other hand, represents a beacon of hope for India’s employment future. With sectors like information technology, banking, and finance leading job creation in recent years, the service industry has proven to be a dynamic driver of employment growth. However, the challenge here is to ensure that these jobs are “good” jobs ~ positions that offer security, fair wages, and opportunities for advan cement.
To achieve this, India must continue to invest in high-growth sub-sectors such as digital services, healthcare, and renewable energy while also addressing the needs of gig workers by providing social security and fair labour practices. Manufacturing, a sector once seen as the backbone of India’s economic growth, has faced stagnation in job creation. Automation and a capital-intensive approach have limited its ability to absorb a growing workforce. To revitalise this sector, India must integrate manufacturing with the service sector and leverage policies like Make in India and the Production Linked Incentive (PLI) schemes. Strengthening research and development within businesses can also spur job creation by fostering innovation and high-value production.
Micro, Small, and Medium Enterprises (MSMEs) play a critical role in job creation, contributing significantly to GDP and exports. However, these enterprises need more targeted support, including better access to credit, digital transformation incentives, and partnerships with educational institutions to align skill development with industry needs. By optimising MSME value chains, especially in Tier-2 and Tier-3 cities, India can create employment opportunities in smaller towns and boost economic growth. India’s employment challenges cannot be addressed through a one-size-fits-all approach. Each sector presents unique opportunities and obstacles that require tailored strategies.
