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While IT and services continue to lead employment generation in India, manufacturing has emerged as a formidable contender in India’s job creation story, according to a Goldman Sachs report.
India’s manufacturing sector leads job growth. (Photo credit: Reuters)
New Delhi: US brokerage Goldman Sachs has highlighted the role of capital intensive in job creation in India. The financial services giant in its latest report attributed job growth over the past decade to electronics and chemicals apart from machinery. The Centre’s focus on Make in India has led to a surge in capital-intensive industries in India.
The emphasis on assembly of electronics goods, machinery as well as pharma products has led to double digit growth in exports to developed countries, according to the report. This is directly related to India’s efforts to diversify its export basket by adding high value products.
Capital intensive sectoral expansion has outpaced labour intensive sectoral expansion in recent years, Goldman Sachs noted. Capital intensive sectors are defined as those whose share of capital income is 0.65 per cent or more. Meanwhile, labour intensive sectors in India include textiles, footwear as well as food and beverages.
What led to jump in capital intensive industry?
Goldman Sachs credited India’s production-linked incentive schemes for emerging as catalysts to drive up manufacturing in the country. PLI has also fostered advancements in technology besides inviting more investment from abroad as well as from domestic sources.
Goldman Sachs shared its findings from the Annual Survey of Industries in India, the ANI reported. The organised machinery employed 17 million workers, equalling 28 per cent of India’s total manufacturing workforce in FY2022.
Job status in India’s labour intensive sector
To be sure, labour-intensive industries continue to lead employment generation in India with 11 per cent employed in the food products sector and 10 per cent in the textiles sector. The construction sector employed 13 per cent of India’s workforce, according to the survey.
Status employment in India’s IT and services sectors
The Services sector led by business and retail comprised 34 per cent of total jobs in India. However, this lagged the sector’s 54 per cent contribution to India’s gross value added. Meanwhile, India’s IT industry is credited with creating 1.9 million jobs over the past 8 years with overall figures standing at 5.4 million, the ANI reported citing Nasscom data.
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