Raghuram Rajan says India's current growth isn't enough to create ample jobs
Reserve Bank of India Governor Raghuram Rajan said.
“We should be going at 8%-8.5% given the needs of the population and the need for jobs,” Rajan said via video link at an event in Beijing on Friday. Economic growth at 6%-6.5% is strong compared with other countries, “but relative to our need for jobs I think it’s still somewhat slow because we have a lot of young people who need to be employed.”
While India’s expansion has outpaced that of other major economies, the country isn’t creating enough jobs for the millions of people joining the workforce every year.
The overall unemployment rate climbed to 10.05% in October, the highest in more than two years, according to Mumbai-based researcher Centre for Monitoring Indian Economy.
HSBC estimates the nation will need to create 70 million new jobs over the next 10 years, and with growth of 7.5%, only two-thirds of the jobs problem will be solved.
High joblessness is also a concern for Prime Minister Narendra Modi as he seeks a third term in office in elections next year. Officials in his administration have been trying to tackle the problem and burnish their credentials by distributing job appointment letters as part of his promise to provide one million government jobs by the end of this year.
Rajan said the nation needs to train its workforce to compete with other efficient manufacturing nations, including China and Vietnam. “India is trying to move up the value chain, and you’re seeing some signs of that happening,” he said, citing output of iPhone parts.
