55 million Additional Jobs needed by 2015 to maintain Ratio of Employed People to Total Population

According to a report from CRISIL Research, an independent research house, India needs at least 55 million additional jobs by 2015 to maintain the current ratio of employed people to total population at 39 per cent. Twice the number of jobs created during 2005-2010 would be required to maintain the mark. The CRISIL Research study is based on recently released National Sample Survey Organisation (NSSO) data on employment in India.
CRISIL, after considering the number of people retiring or losing their jobs by 2015, new job hires would have to exceed 55 million to maintain the current ratio of employed people to total population.

Total employment is the sum of people in jobs and self-employed. Between 2005 and 2010, the net addition in jobs was 27.7 million but the number of self-employed people decreased by 25.5 million. The decrease in the number of self-employed people restricted the increase in number of employed people to two million. This increase was misinterpreted by many as the number of jobs created.

Job creation could not keep pace with GDP growth. The GDP growth increased to 8.6 per cent during 2005-10 from 6 per cent during 2000-05, but the net addition to jobs remained almost flat at around 27 million during the two time periods. Combined with a decline in the number of self-employed persons, the employment intensity (number of employed persons per lakh of real GDP) was reduced to one during 2005-10 from 1.7 in the preceding five years.

The CRISIL report pointed out that the employment potential emanating from faster growth in manufacturing and services could not be fully exploited due to lack of policy support. In manufacturing, employment declined by 7 per cent, despite a faster growth in manufacturing output. In contrast, employment grew by almost 70 per cent in the construction sector.

The report also pointed out that high economic growth alone is not sufficient for creating jobs. Appropriate policies will have to complement high growth for facilitating the required job creation in the manufacturing and services. The role of policy assumes greater importance as the weak growth in advanced countries is likely to hurt job growth in export oriented sectors in India.