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Economy

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October 14, 2017

India needs to revamp its approach, to fully utilise its less tapped potential of demographic dividend – Analyse.

Refer - The Hindu

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IAS Parliament 6 years

KEY POINTS

·         There are primarily three demographic groups in urgent need of jobs, which include –

a)     a growing number of better educated youth.

b)     uneducated agricultural workers who wish to leave distressed agricultural sector.

c)      young women, who are increasingly getting educated than before.

·         Unfortunately, India had not been very positive in absorbing this job seeking population due to various factors.

Causes

·         The pattern of growth was largely driven by the services sector.

·         Manufacturing has more potential to drive productivity and create more jobs but, manufacturing has not been the leading sector in driving growth.

·         Under Inverted duty structure, import duty on finished goods is low compared to the import duty on raw materials used in production.

·         Resultantly, domestic manufacturing becomes uncompetitive as against imported finished goods.

·         Excessive imports, have undermined the Indian manufacturing industries, thereby reducing job opportunities.

·         Low investment.

·         Low credit off-take.

·         Low capacity utilisation in industry.

·         Low agricultural growth.

Solutions

·         Industrial policy preparation by the DIPP should be made consistent with the trade policy in order to address issues such as inverted duty structure.

·         Proper implementation of the National Manufacturing Policy, 2011.

·         Special packages of sector specific needs are required for labour-intensive industries such as, food processing, leather and footwear, textiles, apparel and garments etc., to create more jobs.

·         Cluster development should be enhanced to support job creation in MSMEs.

·         Urban development should be aligned with manufacturing clusters to create jobs.

·         E.g. AMRUT programme on infrastructure improvement can focus on towns which have clusters of unorganised sector economic activities.

·         This can considerably absorb the non-agricultural job seekers.

·         A co-ordination between the Urban Development and MSME Ministries is necessary to ensure this.

·         Skilling close to clusters, which is where the jobs are, rather than standalone vocational training providers, is likely to show better results.

·         Public investments in health, education, police and judiciary can create many government jobs.

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