'Jobs crunch looms, need growth and labour reform'


India will face a shortage of about 17 million non-agricultural jobs by 2020 if labour reforms and high-growth policies are not taken up immediately, says the Economic Survey. It says that this massive shortage about six times the current numbers could trigger social unrest.

Referring to recent incidents of violent labour unrest in the automobile sector, the Survey has suggested the setting up by industry of a Supplementary Unemployment Benefit Fund. "India's continuing on a rapid growth path is not pre-ordained. It requires deft policy-making and a broad vision for the future, and identification of possible risks and opportunities," it notes.

Painting three scenarios of 'business as usual', 'reforms' and 'decline', the Survey says vast improvements in infrastructure, education, business regulation and labour laws are critical for India not to slip "into a comfortable 6-7 per cent (growth rate), the new normal".

These reforms, it says, are essential to provide jobs for the army of labour that is likely to move from agriculture to industry by 2020. The migration to industry from agriculture would result in farms employing just 40 per cent of the workforce, it says.

Raghuram Rajan, the government's chief economic adviser, said, "The best form of inclusion is to provide a good job for everyone. Chapter 2 of the Survey tries to have a debate on job creation: how do we energise jobs in manufacturing? How do we provide high-productivity jobs for people moving away from agriculture?"

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