India Must Create 8 Million Jobs Annually To Reach Developed Status by 2047
India needs to create 8 million jobs every year at least for the next 10-12 years and increase the contribution of manufacturing to GDP as it works towards realizing the vision of becoming a developed nation by 2047, Chief Economic Advisor to the Government of India V Anantha Nageswaran stated.
"We have a goal of having a developed India in 2047. The biggest challenge, except for the size of India, is that the external environment isn't going to be so very friendly for the next 10-20 years as one has had in the previous 30 years, say from 1990 or something", Nageswaran informed here Saturday.
"But within this context that's a given, you can't choose your external environment beyond a point we have to create 8 million jobs every year at least for the next 10 to 12 years.And increase the manufacturing component of GDP, in the context of China having gained such great manufacturing supremacy, particularly post-COVID", he said.
Nageswaran was addressing the Columbia India Summit 2025 hosted by the Deepak and Neera Raj Centre on Indian Economic Policies at the School of International and Public Affairs at Columbia University.
He presented that artificial intelligence, technology, and robotics are challenges that some of the developed nations of the present time do not need to confront in their path of development.
"But India, being the size that it is, has to work through this massive, daunting problem, and there are no easy solutions. If you look at the number of jobs we have to create, we're talking about 8 million jobs a year. And Artificial Intelligence can play a significant role in taking away first-time jobs, or low IT-enabled services can be threatened", he added.
He further noted that it is one thing to get the people ready for a world of AI, but it is another thing to make sure that "we find the right balance between labour-centric policies and technology, because technology at the end of the day is not just a choice to be made by technologists. It has to be made by public policymakers".
While India is working towards the realization of its vision of 'Viksit Bharat' by 2047, which is the centenary year of its independence, it needs to plug Indian enterprises into the global value chain as well as develop a sustainable small and medium enterprise sector since manufacturing and MSME go hand in hand. " Nations that turned into manufacturing hubs did not do so without developing a sustainable small and medium enterprise sector", he added.
Nageswaran also added that either investment levels must increase from where they are or "we have to ensure that we squeeze maximum possible juice out of current investments because global capital flows will also be impacted by persistent conflicts among nations".
He added that, thus, it is not that external trade will not count.
"It will matter and we need to pay attention to that because outside competitiveness is also a method of enhancing domestic innovation, domestic potential growth."
"But concurrently, we cannot hope that to contribute as it did in the first decade, when India's average GDP growth was 8 to 9 percent from 2003 to 2008. Year after year, exports contributed 40% of GDP growth during the first decade, particularly before the crisis. During the second decade, the contribution fell to 20%, and during the third decade, it could even be lower", he said.
Nageswaran pointed out that it is not that India's export competitiveness is irrelevant.
"It has to be the driver. One has to raise one's game on quality, R&D and internally on logistics and last-mile connectivity. But from a policy point of view, it will make sense to believe that it will not be so easily feasible to squeeze growth out of exports as we used to do in the past", he said.
He pointed out that over the past three years since COVID, India's growth has been well above 8%.
"Obviously, in the current environment, sustaining an 8% growth rate is going to be a very tall order. But if we can maintain growth rates of even 6.5 percent on a sustainable basis over the next decade or two and look to opportunistically increase it to over 7 percent by focusing on domestic deregulation, that will be the way to go."
Last week, the United Nations Trade and Development (UNCTAD) had stated that India is projected to expand 6.5 percent in 2025 on the strength of sustained strong public expenditure and continued monetary accommodation, even though the world economy is on a recessionary path, powered by rising public tensions and lingering uncertainty.
The UN Trade and Development (UNCTAD) last week had stated that India is likely to grow at 6.5 percent in 2025 on the strength of sustained strong public expenditure and sustained monetary easing, even as the world economy is on a path of recession due to rising trade tensions and ongoing uncertainty.
The one-day conference at Columbia saw attendance by students, faculty members, policy professionals and economists and the discussion centred around India's economic future, innovation and trade.
"The challenge before India is very huge in a tough and challenging international situation, but I believe the policy decision-making and setting priorities, as we have done with a focus on deregulation, can help us to sustain the growth edge even in this challenging situation", Nageswaran stated.
