India’s unemployment rate to decline by 97 basis points by 2028: ORF report

Apr16,2024



New Delhi: India's unemployment rate is projected to decline by 97 basis points by 2028, according to a new report released by the Observer Research Foundation (ORF) on Tuesday. report, title India Employment Outlook 2030 highlights projections indicating a decline in the unemployment rate from 4.47 percent in 2024 to 3.68 percent in 2028. Economy of India Moving towards the US$5 trillion mark.
The report highlights that India's job market is evolving, boosted by the country's rapid economic growth following the COVID-19 pandemic. With a young population, where the average age is 28.4 years, India will see significant growth economic expansionThe report said.
The report suggests that with a GDP growth rate of 7.8%, India can potentially achieve the target of US$ 5 trillion economy by 2026-27 due to strong private consumption and public investment.
Currently standing at just under US$4 trillion in 2024, India's GDP size is expected to grow further. The report also identifies sectors that are considered aspirational by more than 600 million people aged 18-35 years. These sectors are expected to act as engines of growth, potentially increasing total employment by 22 percent by 2028.
Substantial job creation is expected to occur particularly in the services sector, with each unit increase in service output expected to increase employment by 0.12%. Ten high-opportunity sub-sectors within the services sector including digital services, financial services, healthcare services, hospitality, consumer retail, e-commerce and renewable energy.
Furthermore, the report highlights the need to focus on women's employment within the services sector, emphasizing the importance of investing in women's skills, financial inclusion and entrepreneurship. However, despite initiatives like Make in India and the country's competitive cost structures, the outlook for India's manufacturing sector is less optimistic.
Technological advances and automation pose challenges to employment in the manufacturing sector, leading to a decline in workforce absorption. To address this, the report suggests a transition to service sector-linked industrial value chains for employment rejuvenation.
Nilanjan Ghosh, Director of ORF and one of the report authors, stressed the importance of collaboration of policy makers with stakeholders to bridge the employability gap and upgrade skills. “Policy makers and public sector schemes can partner more closely with other stakeholders to identify employability and skills gaps,” he said. “The next step is to develop curriculum and training to make India's talent pool more industry ready.” Skills have to be upgraded.”
Ghosh said promoting entrepreneurship would be important to improve the employability of the next generation. He said, “A new class of entrepreneurs can spur job creation, expand India's startup ecosystem, spur innovation and boost youth participation. But we also need to ensure There is a need for the workplaces of the future to be gender-sensitive and inclusive.”
The report advocates a collaborative approach among stakeholders to achieve India's vision of a digitally empowered, efficient, innovative and self-reliant economy.



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