Stressing on “worrying macroeconomic theme”, Bajaj noted that each year India is producing an extra 12 million young people of an age that makes them ready for the nation’s workforce.
“Unfortunately, while there is no doubt that we as a country can increase our GDP growth initially to 8 per cent per annum and then hit a steady-state of around 8.5 per cent for several years, everything seems to suggest that employment will not rise at anywhere close to that rate of growth,” he said.
Indeed, all recent data across most manufacturing and service sector activities show that employment elasticities (namely, the percentage increase in employment for a percentage growth in value added) are not only less than unity, but often negative, he added.
“Matters worsen if you juxtapose significantly greater skill and multi-tasking needs of the future with the inadequate educational and technical abilities of many who are entering the labour force thanks to years of neglect of our schools, colleges and technical and vocational training institutions,” Bajaj said.
“How then can we expect to employ the majority of our youth even when we attain higher growth? And what will this do to inequality and social tensions? I don’t have ready answers. But as a nationalist in his seventh decade, I am concerned.”