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The investment climate is going well in India and the private sector should skill their workforce in the interest of its business, Chief Economic Advisor K V Subramanian said on Thursday asserting that he does not foresee any difficulty in demand and supply of the workforce.
Addressing 'Times Network India Economic Conclave', Subramanian further said job creation is part of the virtuous cycle that starts with private investments flowing into the country resulting in production, growth, job creation and increase in aggregate demand which in turn leads to more investments in the economy.
The investment climate is going well in India. Other things will follow, though with a lag...it is for the private sector to start recognising that it is in their own business interest that they should skill their workforce. This, in turn, will raise the average level of skills in India," he said.
As far as skilling is concerned, Subramanian said he does not foresee any difficulty in demand and supply of the workforce.
The economic reforms have been done keeping in mind the problem of dwarf firms in India, the CEA said adding these are the firms which grow in size and age but do not create jobs.
Subramanian also noted that there is no short-term silver bullet to growth and job creation.
Noting that the emphasis has been enabling primary and secondary sectors of the economy, he said the secondary sector is extremely critical for job creation.
"What India needs today is significant number of jobs created in manufacturing sector," he opined.
Also participating at the event, Niti Aayog CEO Amitabh Kant said if India wants employment creation and wants to drive its demographic dividend, it has to grow at high rates consecutively year after year.
While the government has undertaken vast structural reforms in the post-COVID-19 era, there is a need to focus on sunrise sectors to give quantum jump in economic growth.
"Structural reforms across many sectors including coal and mining will accelerate the pace of growth for the next decade," he said.
"However, we must look at sunrise sectors like 5G technology, hydrogen and battery manufacturing instead of sunset sectors as this will lead to a quantum jump in economic growth and thus create more employment," Kant added.
Stressing on the need for the private sector to invest and grow bigger in size and create more jobs, the Niti Aayog CEO said the government is trying to create size and scale in manufacturing while eyeing monetisation of assets to create a virtual cycle of growth.
"The idea of asset monetisation is to allow the private sector to bring in equity and raise more debt.
"This will be used by the government to create more assets, thus starting a virtual cycle of growth which will drive job creation in the country," Kant said.
On the role of the New Education Policy, he said it is the biggest driver of change and will bring about a paradigm shift in providing a skilled workforce.
"While India should focus on skilling across new areas of growth as we move from a mere data rich to data intelligent country, the private sector should be ready to pay more for the skilled workforce," he said.
Kant also said the private sector should pay skilled workers more than what they are getting now.
Photograph: Anushree Fadnavis/Reuters