Sectors with job creation potential may be singled out for special focus

One of the major electoral issue this election season was a crisis in jobs. An unrelenting opposition spared no punches in pinning down the previous Modi- government’s failure to create enough opportunities to the armies of young people who join the queue of hopefuls every year.

The central long run question confronting India is the need to create jobs. A productive job is the best form of inclusion. Unemployment rose to 7.6% in April 2019, the highest since October 2016, and up from 6.71% in March, data from private think-tank the Centre for Monitoring Indian Economy showed.

The recent controversy surrounding a leaked report of the National Sample Survey Organisation (NSSO) had managed to put the previous government in a spot. The report, which the government is believed to have prevented from getting released, sparked criticism. It showed that India’s unemployment rate was at a 45 year high.

The new government has to bring about policies to create opportunities for an estimated 1.2 million young people entering the market each month, and that would be a key challenge.

“The real issue is about meaningful jobs. Everywhere in the world, elasticity of jobs to economic growth has been coming down because of technology. It is important to look at the sectoral employment numbers. There are sectors that are losing jobs, and sectors that are adding jobs. The right question that the new government should be asking is which are the sectors that are creating jobs?” a top government official told Moneycontrol.

One can expect tax breaks and other incentives for companies that operate in sectors that the government believes has the highest potential to create jobs.