New Delhi: India needs to create 8.1 million jobs a year to maintain its employment rate, said a World Bank report which projected the country's growth to accelerate to 7.3 percent in the current financial year.
It has projected the growth rate to increase further to 7.5 percent in the following two years.
The report also said that India has recovered from the withdrawal of large denomination bank notes in November 2016 and Goods and Services Tax (GST), rolled out on July 1, 2017.
In its twice-a-year South Asia Economic Focus (SAEF) titled 'Jobless Growth', the bank also said that the area has regained its lead as the fastest growing region in the world, supported by recovery in India.
"Growth is expected to accelerate from 6.7 in 2017 to 7.3 percent in 2018 and to subsequently stabilise supported by a sustained recovery in private investment and private consumption," it said, referreing to India.
The report projected the country's growth to further accelerate to 7.5 percent in 2019-20 and 2020-21 and suggested that New Delhi should strive to accelerate investments and exports to take advantage of the recovery in global growth.
"Every month, the working age increases by 1.3 million people and India must create 8.1 million jobs a year to maintain its employment rate, which has been declining based on employment data analyzed from 2005 to 2015, largely due to women leaving the job market," it said.
SAEF finds that the South Asia region could even extend its lead over East Asia and the Pacific.
Much of the progress, however, is driven by India's growth rebound and is not consistent across countries. Despite accelerating global growth and trade, exports remain weak. Progress on fiscal consolidation is slow, and deficits are high.
The report argues that growth alone will not be enough to attain the higher employment rates enjoyed by other developing countries, especially among women.
More than 1.8 million young people will reach working age every month in South Asia through 2025 and the good news is that economic growth is creating jobs in the region, said Martin Rama, World Bank South Asia Region Chief Economist.
But providing opportunities to these young entrants while attracting more women into the labour market, will require generating even more jobs for every point of economic growth, Rama added.