Unemployment rate to decline 97 basis points by 2028: ORF

Unemployment is projected to decrease from 4.47% in 2024 to 3.68% in 2028

April 16, 2024

The service sector is anticipated to lead in job creation, with every unit rise in services output contributing to a substantial 0.12% increase in employment

India's GDP will US$ 5 trillion by 2026-27, propelled by robust private consumption and public investment

Ten high-opportunity sub-sectors within services, including digital services, financial services, and healthcare, are identified as potential engines of growth

The report emphasizes the need for investment in women's skilling, financial inclusion, and entrepreneurship

A recent report by the Observer Research Foundation (ORF) suggests a significant decline in India’s unemployment rate by 2028 as the economy surges towards the US$ 5 trillion milestone. According to the India Employment Outlook 2030 report, unemployment is projected to decrease from 4.47% in 2024 to 3.68% in 2028.

The report highlights India’s evolving job market, attributing it to the country’s status as the fastest-growing large economy post the pandemic. With a median age of 28.4 years, India’s youthful population is seen as a driving force for economic growth.

The ORF report envisions India’s GDP reaching US$ 5 trillion by 2026-27, propelled by robust private consumption and public investment, with the GDP estimated to be just under US$ 4 trillion in 2024.

Identifying sectors considered aspirational by the 600 million-plus population aged 18-35, the report suggests that overall employment could increase by 22%, with unemployment declining by 97 basis points by 2028.

The service sector is anticipated to lead in job creation, with every unit rise in services output contributing to a substantial 0.12% increase in employment. Ten high-opportunity sub-sectors within services, including digital services, financial services, and healthcare, are identified as potential engines of growth.

While the service sector offers promising avenues for women’s employment, the report emphasizes the need for investment in women’s skilling, financial inclusion, and entrepreneurship.

However, the outlook for the manufacturing sector appears less optimistic, with employment declining despite efforts such as Make in India and competitive cost structures. Technological advancements and automation pose challenges to absorbing the workforce.

Nilanjan Ghosh, a director at ORF, underscores the importance of partnerships between policymakers and stakeholders to address employability gaps and upgrade skills. He emphasizes the role of entrepreneurship in stimulating job creation and fostering innovation while advocating for gender-sensitive and inclusive workplaces.

Source: Economic Times

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