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New Delhi: A paper by economic think tank NCAER has made a case for investment in skilling of workforce to increase employment in the labour intensive sectors by 2030. The paper titled ‘The Landscape of Employment in India: Pathways to Jobs’ said inter-sectoral linkages can have a multiplicative effect on employment in the aggregate economy, increasing employment by up to 200 per cent relative to existing scenario. “On the supply side, we show that increasing the share of skilled workforce by 12 percentage points through investment in formal skilling could lead to more than a 13 per cent increase in employment in labour intensive sectors by 2030,” it said. On an average, the paper said labour-intensive manufacturing accounts for 44.1 per cent of total manufacturing employment, while labour-intensive services account for 54.2 per cent of total services employment. “Our demand-side simulations indicate that we can significantly bridge the employment gap by increasing the size of the manufacturing and services sectors, particularly through a focus on labour intensive industries therein,” the paper said.Live Events Outlining some of the policy prescriptions, the paper’s author Farzana Afridi said there is need for a multi-pronged approach to increase production capacity in labour-intensive manufacturing and services sectors, including stimulating domestic demand through higher government expenditure and lowering of taxes. The paper also laid stress on adoption of international best practices and implementation of national quality benchmarks for training and reskilling or upskilling existing workers. Referring to the Production-Linked Incentive (PLI) scheme, the paper pointed out that it is primarily focused on expanding production of high value products with backward linkages which require high-skilled labour. “But the highest number of jobs under the scheme has been created in the food processing and pharmaceuticals industry. This reflects a mismatch between budgetary allocation under PLI and potential for employment creation,” the paper said adding productivity and quality of workforce have to be increased significantly to improve labour quality. It cited the Future of Jobs Report 2025 which highlights that 63 per cent of India’s workforce will need reskilling or upskilling by 2030 to remain competitive. Among others, the paper suggested incorporating soft skills, digital literacy and Information and Communication Technology (ICT) skills into training programmes to enhance employability, particularly within services sub-sectors. “Improving training quality, along with increasing the share of formally trained workers, can lead to higher employment gains,” it added. Since labour-intensive manufacturing and services sectors account for over half of total employment in India, the paper advocated significant policy focus on expanding labour-intensive manufacturing and services, along with a systemic overhaul of the education system to enhance the human capital of the labour force.(You can now subscribe to our Economic Times WhatsApp channel)
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