India’s continued thrust on infrastructure, with planned public spending of ₹11.11 lakh crore this year, would help improve the business environment, attract private investments and create jobs in sectors with higher salaries, but the low participation in higher education, with pronounced gender gaps, remained a challenge for boosting non-agriculture jobs, Moody’s Ratings said on Tuesday.
Noting that India’s farm sector employment was still high compared to other large and fast-growing G-20 emerging markets, the credit rating major said: “Typically, if service and manufacturing sectors create more jobs to absorb the surplus labour supply in the agricultural sector, productivity in the agricultural sector will naturally increase as a result of the reduced labour base, and the new supply/demand equilibrium will lead to higher income for the agricultural sector”.
Terming the low participation in higher education and the gender gap in education attainment as a limiting factor to create a large workforce ready to take on higher value-added jobs, Moody’s said this also posed a restraint on household income growth.
“In addition, the elevated unemployment rate, which averaged 8.1% in 2023 and was higher than that recorded in each of the three years preceding COVID-19, combined with weak real wage growth as a result of high inflation, will continue to hold back household consumption growth,” it emphasised.
