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Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
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A tough challenge for India ahead! 
(Wed, 7 May Pre-Open) 
 
What is the biggest challenge for India? The country that claims the largest share of youth population is not able to provide them enough job opportunities to use their potential. The much hyped demographic dividend not just seems difficult to cash on, but is in danger of becoming a huge liability for lack of enough employment opportunities. It is true that the slowdown in the economy has overall impacted job creation. Low demand and high inflation are pressurizing margins making companies wary of hiring new people. While this is a cyclical phenomenon, we are more worried about the structural and regulatory impediments.

Coming to regulatory roadblocks, India is not a business friendly nation. Corruption and delays in procedures have held in check the entrepreneurship potential in the country. The archaic labour laws have further distorted the job market with contractual employment.

And lack of enough jobs to absorb youngsters is not the only problem. Majority of India's population still thrives on farm income; the share of which has gone down in the GDP. Low productivity is another issue we need to deal with. The job opportunities in the manufacturing sector are declining due to mechanization, thus putting more pressure on the service sector to absorb the working population.

Will a new Government be able to make a difference in the domestic job scenario? As mentioned in an article in Business Standard, not only will it need to create new jobs, but also raise the share of formal jobs. Further, for creating new jobs, the Government will need to invest in infrastructure and logistics such as power supply, road, and rail and sea transportation. However, even if these steps are taken by the Government, the results won't be reflected immediately. This is because it will take some time for investment cycle to kick off after sustained reforms.

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1 Responses to "A tough challenge for India ahead!"

Kirandeep Atwal

May 7, 2014

If person does agriculture on 25 acre of land then it will support one family (3-4 people). But, if one put industry on this land than it will support thousands of people. Moreover, it will bring prosperity to that region and land prices in that region will increase many folds. Therefore, I do not understand why people are opposed to giving land to few industrialist on subsidized rates.

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