According to CRISIL Research, India needs at least 55 million additional jobs by 2015 to maintain the current ratio of employed people to total population at 39 percent. This would be nearly twice the jobs created during 2005-2010 and taking into consideration the number of people retiring or losing their jobs by 2015, new job hires will exceed 55 million. In essence, job creation has not kept pace with the GDP growth. The GDP growth increased to 8.6% during 2005-10 from 6% during 2000-05, but the net addition to jobs remained almost flat at around 27 million during the two time periods. The weak growth in advanced countries is most likely to hurt job growth in the export oriented sector in India and hence the role of policy assumes greater importance. “Policy gridlock in labor reforms remains the primary cause of insufficient labor demand in manufacturing. Contrastingly, in financial intermediation and business services, labor supply has not kept pace with growing demand, given a shortage of highly educated skilled labor. Easing demand constraints in manufacturing through labor reforms and supply constraints in services by fast fast-tracking reforms in higher education will lead to faster job growth,” says Vidya Mahambare, Senior Economist, CRISIL.
Union Ministry of Labor and Employment states that the information technology and BPO sectors have together created the highest number of jobs in India since October 2008. Numerically speaking, the sector has created 15 lakh direct and indirect jobs since October 2008. Interestingly, the fast growing green energy sector is expected to create about a million new jobs over the next 2 years, offering employment opportunities in diverse areas including those of agriculture, manufacturing, research & development.