Mumbai: Indian economy will benefit from rising young working population over the next decade but requires migration of workers from agriculture to industry and services to sustain growth, Reserve Bank Deputy Governor,Subir Gokarn, said Friday.
To achieve high inclusive growth, there is a need to facilitate the transition of workforce from agriculture to services and industrial sectors (as the growth is propelled not by agriculture but by services and industrial sectors)," he said at the Skoch seminar here.
Around 10 million people are likely to join the nation's workforce this year while 120 million youth may join Indian working population over the decade.
Gokarn said, the addition in work force, which is much higher than that of China, will add impetus to economic growth. The Government has projected a GDP growth of 8.5 percent in 2010-2011 as compared to 7.4 per cent in the last fiscal year.
The addition in workforce could help expand the capacity and capital intensity in the manufacturing and other related sectors, said the RBI deputy governor.
However, he cautioned, the rise in manufacturing output over the past two decade without a corresponding rise in the number of factories or workforce meant the industrial sector needed to create more capacity to accommodate new workers.
"If the same number of workers produce more, then that means that new workers who are coming in 10 million per annum are not getting a chance," Gokarn said.
He said the country needed to frame right policies to emulate labour-intensive manufacturing practices in China for long-term growth. He also asked for incorporation of labour flexibility, skill-matching and safe working environment for the workers to ensure healthy growth.
First Published: Friday, June 18, 2010, 16:06