The economy of India is growing steadily, but former Reserve Bank of India Governor Raghuram Rajan stated that the country needs to grow at a rate of more than 8 per cent in order to produce enough jobs for its vast population, according to a report by Bloomberg.
“We should be going at 8 per cent-8.5 per cent given the needs of the population and the need for jobs,” Rajan said via video link at an event in Beijing on Friday. Economic growth at 6 per cent-6.5 per cent is strong compared with other countries, “but relative to our need for jobs I think it’s still somewhat slow because we have a lot of young people who need to be employed.”
Even while India's economic growth has outperformed that of other large nations, the nation isn't producing enough jobs to accommodate the millions of new workers who enter the labour force each year.
The Centre for Monitoring Indian Economy (CMIE), a research institute based in Mumbai, reports that the overall unemployment rate increased to 10.05 per cent in October, the highest level in almost two years.
According to HSBC, the country will only be able to tackle two thirds of the employment issue with growth of 7.5 per cent, meaning that 7 crore new jobs will need to be created over the next ten years.
As he runs for reelection in 2019 to a third term, India's high rate of unemployment will also be a concern for Prime Minister Narendra Modi. As part of his pledge to deliver 10 lakh government jobs by the end of this year, officials in his administration have been attempting to address the issue and bolster their reputations by sending job appointment letters.
According to Rajan, in order for the country to compete with other productive manufacturing nations like China and Vietnam, its labour force needs to be trained.