The Aryavarth Express
Agency(Bengaluru, India): According to a recent Reuters poll, India, while being the world’s fastest-growing major economy with a projected growth rate of 6.5% this fiscal year, faces a significant challenge in unemployment. This issue has become a central concern as the country, now the most populous globally, continues its national elections.
The poll, conducted from April 16-23 among 26 economists, revealed that the majority (15 economists) believe the most pressing task for the next government will be addressing the unemployment crisis. Other concerns like rural consumption, inflation, and poverty were noted but considered less immediate.
Economist Kunal Kundu from Societe Generale highlighted the decade-long trend of near jobless growth that has led to a decrease in India’s labor force participation rate (LFPR), falling well below those of the four Asian tigers during comparable demographic stages. The Bharatiya Janata Party (BJP), led by Prime Minister Narendra Modi and expected to secure a third term, has been criticized for its focus on traditional employment sectors like infrastructure, manufacturing, and government jobs, which have yet to significantly impact job creation.
Official statistics paint a troubling picture of the job market: the unemployment rate slightly improved from 3.4% in 2013-14 to 3.2% in 2022-23, yet the Centre for Monitoring Indian Economy reported a higher rate of 7.6% in March.
While the government’s increase in capital expenditure has contributed to economic growth, experts like Alexandra Hermann from Oxford Economics caution that last year’s growth, boosted by government spending, might not be sustainable due to the need for fiscal prudence.
The survey also anticipates continued economic expansion at a rate of 6.5% this fiscal year and 6.7% the next. However, inflation, which stood at 4.85% in March, is forecasted to average around 4.5% in the coming years, with many economists predicting potential higher rates.
As India navigates these economic challenges, the focus remains on balancing growth with effective strategies to reduce unemployment and ensure broader economic benefits across its diverse population.