ALBAWABA – India’s gross domestic product (GDP) will grow at a solid rate for the rest of the current fiscal year and the next, but forecast India GDP growth rate still does not touch on its potential, according to a Reuters poll, reported Monday.
On the other hand, jobs will grow ever so marginally, Reuters’ economists said, warning that growth in employment will not be proportionate to growth in India GDP.
Reuters asked the economists about the employment situation in India and how it will change in the coming years, 17 of 25 economists said it will improve slightly.
"The unemployment situation hasn't improved yet...and the skilling to some extent is also missing. So, there is a gap in terms of the demand versus the supply," said Radhika Piplani, chief economist at DAM Capital Advisors.
India’s current demographic dividend is unprecedented, and it demands an annual GDP growth rate of some 8 percent for the 25 years to actually cope and reap the benefits.
According to Investopedia and the United Nations Population Fund, demographic dividend is economic growth brought on by a change in the structure of a country's population. It usually is a result of a fall in fertility and mortality, and such.
In India’s case, however, achieving this objective hinges on implementing key reforms in education, infrastructure, healthcare and technology.
"If we want to realize that 8 percent growth potential this decade...the biggest challenge before policymakers is to reallocate the surplus labour from agriculture to more productive sectors with gainful jobs in them," Dhiraj Nim, economist at ANZ Research, told Reuters.
"If India's reform momentum is lacklustre, a less exciting picture is on the cards," he warned.
Reuters polled 53 economists between July 13 and 21. The survey showed the Indian economy would grow 6.1 percent this fiscal year.
Notably, a 6.1 percent growth rate in India GDP is significantly higher than many developed economies as other major economies are expected to slow. But at the very least, India will have to maintain a conducive environment for job creation, Reuters highlighted.
India was forecast to grow 6.5 percent next fiscal year, with expectations of 6.2 percent growth this quarter, followed by 6.0 percent and 5.5 percent. The outlook was largely unchanged from an ealier Reuters June poll.
"I think 6.0 to 6.5 percent is a very achievable and a very conservative forecast for India's growth trajectory," Nim added.
World Bank President Ajay Banga recently said the key to India's growth story is through more jobs as he outlined the opportunity to cash in on the "China Plus One" strategy.
China Plus One, or C+1, is an investment strategy intended
