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Sectoral Employment Generation Strategy in India

AGRICULTURAL EMPLOYMENT
ü The current labour force consists of approximately 400 million men and women.
ü  56% are engaged in agriculture as their primary occupation which is down from 65% in the early 1990s. Another 13% are engaged in manufacturing and the balance are employed in the service sector, which has grown from 25% to 32% of total employment over the past two decades
ü  The organized sector provides less than 8% of the total jobs, about 3% in private firms and 5% in the public sector. The informal/unorganized sector is provides the other 92%.
ü Only 6-8% of India's workforce has received formal training in vocational skills, compared with 60% or more in developed and most rapidly developing countries.
ü  There is enormous scope for raising the productivity of Indian agriculture, doubling crop yields and farm incomes, and generating significant growth in demand for farm labour
ü  Rising rural incomes consequent to higher productivity will unleash a multiplier effect, increasing demand for farm and non-farm products and services, thereby stimulating rapid growth of employment opportunities in agriculture and other sectors.
ü  Policy and legal measures to encourage contract farming arrangements between agri-business firms and self-help groups in order to increase small farmers' access to advanced technology, quality inputs, bank credit, processing, marketing and crop insurance.
ü  We need to improve employable skills at all levels and intensive development of vocational skills will act as a powerful stimulus for employment and self-employment generation
ü  Establish a network of government-certified, rural vocational institutes providing training and certification in hundreds of vocational skills not covered by the it is

MANUFACTURING
ü  India aims to raise manufacturing (sector's) share of GDP from 16 per cent to 25 per cent and create 100 million skilled jobs.

ü  With many multinational corporations treating India as a major manufacturing hub amidst the IT boom the nation is poised for a big leap. With more diversification and better availability of skilled manpower Indian manufacturing industry is now ready to compete in global markets. Manufacturing is inextricably linked with other sectors.

ü  The manufacturing industry has made rapid strides in India mainly because the country meets the key requirements of skills in resources, product and process. The technical manpower available in abundance along with cheap labour has attracted a host of foreign companies in every conceivable sector. But India is nowhere near China in becoming a global manufacturing hub. But it has the potential. No other nation produces as many engineering graduates every year as India does

ü  According to FICCI, even though agriculture supports 60% of the working population, it contributes only 22% of the country's gross domestic product. The manufacturing sector employs around 30 per cent of non-agricultural work force in India now. With sluggish growth of agriculture and poor income generation more and more of the agriculture labour will have to turn to the manufacturing sector for sustenance.
ü  How to increase the productivity in the manufacturing industry should be the prime concern. Studies have revealed that the productivity of the manufacturing industry in India is about 20 p.c.of the productivity in the US. It is almost half of the productivity in South Korea. 

ü  Use of outdated technology, poor infrastructure, costly financing and bureaucratic control have dogged the sector. FICCI points out that the higher input costs for the Indian manufacturing sector  due to impact of indirect taxes, high cost of power, water, higher cost of finance and high transactions costs puts the sector at a severe disadvantage.

ü  While laying down guidelines to the government to accelerate growth and improve competitiveness of the manufacturing sector, it has sought more private sector participation in infrastructure sectors like electricity distribution, aviation, roads, railways and ports.

ü  IT revolution could play a key role in increasing the productivity on the shop floor and supply chain management. In an environment of intense global competition with customers becoming more demanding, manufacturers must find ways to achieve greater efficiency and speed in the product development process.

ü  The engineering sector has remained a high potential business, which has played a crucial role in boosting the economy and supporting the growth of other key sectors of the economy. It contributes almost 8 percent to the annual GDP.

ü  India is the largest exporter of machinery and other engineering products in the third world countries. India competes successfully in the global capital goods market, catering to the needs of steel plants, power plants, cement, petrochemical units as well as mining. It also exports farm equipment, such as tractors and harvesters, construction machinery, passenger cars, electrics, electronics and pollution control equipment.














SERVICES SECTOR

ü Transportation
The transportation industry is an evergreen sector in India, with very large potential for growth. This sector comprises roadways, ports, super highways, rail as well as aviation. It is a high growth sector contributing to 8.5% of GDP. This sector has unique opportunities of foreign investments in highway construction and management but is also bogged down by issues of land acquisition and environmental clearances.  Aviation too has good potential under new FDI norms. Railways are yet to open up for private investment, but will offer tremendous opportunities as and when it gets restrictions are lifted.

ü InfoTech Industry

India’s strength in the Information technology sector is based on the development of sophisticated knowledge base and competence of specially trained professionals. The industry constitutes the export driven IT services sector and business process outsourcing. The IT and ITES companies contribute substantially to Indian GDP growth. It has been the prime mover of the services sector in India, which in turn contributes to the extent of almost 60% of the GDP. The city of Bangalore (now called Bengaluru) is the IT capital of India. The industry accounts for almost 25% of the total exports from India. It has grown at an exponential velocity and has led to accelerated development of metropolitan cities spurring the growth of other sectors. This has continued to be the most preferred sector of global investors. This sector will be the immediate beneficiary of the current global recovery.
Today an increasing number of equity diversified mutual funds are seen favoring technology companies and telecom firms, among the sensitivity index stocks, as the IT sector benefits from a rupee stabilized at a lower level and there is an increasing demand for IT services from US and the other developed economies.
ü Banking and Insurance
The banking sector in India has witnessed a vast growth, supported by sizeable investments in IT and diversification of innovative service offerings. The banking sector index has increased at a compounded rate of over 10-12 percent per annum since the year 2001. Mutual funds of this sector have given a return of 9 to 12% over last 3 years. As and when public sector banks are privatized the value discovery process could result in gains for investors.
India’s life insurance business ranks fifth among the largest global markets. The sector has been growing at rates exceeding 20%. The nonlife insurance Industry has grown at rate of 15%. The insurance sector opened up to private investors in last few years and the market is getting competitive with the entry of global players. Overall this strengthens the risk management capability of the economy.

ü  Real estate
With ever growing demand for housing and commercial space, Indian real estate has emerged as one of the fastest growing sectors of the emerging markets. It has attracted significant participation of foreign investors. Real estate has been contributing as much as 13% of the country’s GDP. Rapid corporatization has helped it to attract funds from the capital market. Rapid urbanization has helped the sector to grow.

ü Retailing business
From the present market size of US$ 500 billion, the Indian retailing trade is expected to reach US$ 1.3 trillion by the end of 2020, as per the report of Ministry of food and consumer affairs in India. The opportunity has attracted significant investments from global players. India’s rapidly growing urbanization has contributed to the growth of the organized retailing in the country. The retail industry is the backbone of growth of the economy with over 20% contribution towards the national GDP. The Indian retail sector is ranked among the top five global retail markets.
ü Non conventional sectors like Education and Training, Entertainment and media, as well as Telecom and Pharma sectors also have very good growth potential.


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