In what could be major concerns for the Narendra Modi-led government, a latest World Bank report says that the employment rate is declining in the country, largely due to women leaving the job market. According to World Bank, India must create 8.1 million jobs a year to maintain its employment rate. “Every month, the working age increases by 1.3 million people and India must create 8.1 million jobs a year to maintain its employment rate, which has been declining based on employment data analyzed from 2005 to 2015, largely due to women leaving the job market,” World Bank said.
World Bank says that the most substantial medium-term risks stem from private investment recovery, which continues to face several hiccups such as corporate debt overhang, regulatory and policy challenges, along with the risk of an imminent increase in US interest rates.
Observing that the economy has recovered from the disruptive effects of demonetisation and GST, leading to acceleration in growth from 6.7% in 2017 to an expected 7.3% in 2018, World Bank said that India must strive to accelerate investments & exports to take advantage of recovery in global growth. However, World Bank observes that as in the past, sustained growth is expected to translate to continued poverty reduction, albeit with heightened uncertainty because of the effects on the informal economy.
“Growth is expected to accelerate from 6.7 in 2017 to 7.3 percent in 2018 and to subsequently stabilise supported by a sustained recovery in private investment and private consumption,” World Bank said in the report.
According to the international body, more than 1.8 million young people will reach working age every month in South Asia region through 2025. The report observed that much of the progress in the region is driven by India’s growth rebound and is not consistent across countries.
The report pinpoints that despite accelerating global growth and trade, exports remain weak in the region. Further, progress on fiscal consolidation is slow, and deficits are high. The World Bank also noted that growth alone will not be enough to attain the higher employment rates enjoyed by other developing countries, especially among women.
Source: Financial Express