Govt needs to focus on promoting labour-intensive industries to generate employment: Rajan
The industries that are more capital-intensive are growing faster, but labour-intensive industries are not growing
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The Reserve Bank's former governor Raghuram Rajan has said that with 7 per cent economic growth, India is not creating enough jobs as reflected by the number of applicants for vacant posts in some states. He suggested the government needs to focus on promoting labour-intensive industries to generate employment. He further said some Indians, especially those at upper level, are comfortable and have high incomes, but consumption growth from the lower half of the country has still not recovered to pre-pandemic level. According to him, the industries that are more capital-intensive are growing faster, but labour-intensive industries are not growing.
While welcoming the apprenticeship schemes announced by the finance minister in this year's Budget, Rajan said ‘but we have to monitor that very closely, see what works and expand what works much more.’ Finance Minister Nirmala Sitharaman had announced in the Union Budget of FY25 that the government will launch three employment-linked schemes based on enrolment in Employees' Provident Fund Organization (EPFO).
Citing examples of Vietnam and Bangladesh, which are doing well in labour-intensive industries like textile and leather, he said ‘we need to look at this (labour-intensive industry) very, very carefully, we cannot be left out.’