India needs to grow at a rapid pace with focus on primary and secondary sectors to reap the benefits of demographic dividend, two top government officials said on Thursday.
“If India wants employment creation and wants to drive its demographic dividend, it has to grow at high rates consecutively year after year,” NITI Aayog CEO Amitabh Kant said. Kant along with India’s chief economic advisor K Subramanian was speaking at the Times Network India Economic Conclave.
“Structural reforms across many sectors including coal and mining will accelerate the pace of growth for the next decade,” Kant said. “However, we must look at sunrise sectors like 5G technology, hydrogen and battery manufacturing instead of sunset sectors as this will lead to a quantum jump in economic growth and thus create more employment,” he added.
Chief economic advisor K Subramanian feels the focus of all the recent reforms, including the production linked incentive (PLI) scheme, is on the primary and secondary sectors that will drive job creation.
“Reforms have been done keeping in mind the problem of dwarf firms in India. These are the firms which grow in size and age but do not create jobs,” he said.
According to Subramanian, job creation is part of the virtuous cycle that starts with private investments flowing into the country resulting in production, growth, job creation and increase in aggregate demand which in turn leads to more investments in the economy.
“The investment climate is going well in India. Other things will follow, though with a lag,” he said, adding there is no short-term silver bullet to growth and job creation.
Reiterating the need for the private sector to invest and grow bigger in size and create more jobs, Kant said the government is trying to create size and scale in manufacturing while eyeing monetisation of assets to create a virtual cycle of growth.
“The idea of asset monetisation is to allow the private sector to bring in equity and raise more debt. This will be used by the government to create more assets, thus starting a virtual cycle of growth which will drive job creation in the country,” Kant said.
Talking about the role of the New Education Policy, Kant said it is the biggest driver of change and will bring about a paradigm shift in providing a skilled workforce. “While India should focus on skilling across new areas of growth as we move from a mere data rich to data intelligent country, the private sector should be ready to pay more for the skilled workforce,” he added.
Subramanian, however, feels the onus to skill the workforce lies on the private sector. “Role of government should only be in areas of market failure. As far as skilling is concerned, I do not foresee any difficulty in demand and supply of the workforce,” he said.
“Hence, it is for the private sector to start recognising that it is in their own business interest that they should skill their workforce. This, in turn, will raise the average level of skills in India,” he concluded.