New Delhi: The Confederation of Indian Industry (CII) has come up with a list of suggestions to the Centre ahead of the upcoming budget as opening job avenues poses a significant challenge.
The trade body has called on the government to focus on specific sectors that have the potential to create more jobs. CII recommended supporting industries like tourism, textiles, construction and low-skilled manufacturing, as they are more likely to drive meaningful employment growth in the country.
Sharing a comprehensive set of recommendations to make the most of the country's demographic advantage, Chandrajit Banerjee, director general of CII, highlighted the unique position India finds itself in. Taking note of the fact that young and growing population, India’s demographic dividend offers a significant opportunity for economic growth and social transformation.
He emphasised that creating jobs is a crucial part of this journey, but it must be paired with improving productivity. To achieve this, India needs to lower its Incremental Capital Output Ratio (ICOR), which currently stands at 4.1, and establish clear metrics for measuring progress, Banerjee noted. He suggested that the Union Budget could establish an expert committee to dive deeper into this issue and propose actionable solutions.
Need for an integrated National Employment Policy
CII has also proposed the creation of an integrated National Employment Policy, which could consolidate the various employment-generation initiatives being run by different Ministries and states. This unified policy could further strengthen the existing National Career Service (NCS) portal, ensuring that data from various sources flow into a central system. To support this, a Universal Labour Information Management System (ULIMS) under NCS could provide valuable information about job opportunities, projections, demand for specific skills, and available training programs.
Incentives on Jobs
In addition, CII has suggested revising the existing tax incentives, such as introducing a new provision similar to Section 80JJAA, which encourages new job creation. This would allow businesses to receive tax deductions for hiring new employees, for the first three years, up to a ceiling of Rs. 1 lakh per month. This deduction should be available to all businesses that are subject to tax audits, with certain exceptions, like businesses involved in restructuring or reorganisations.
To stimulate job creation, CII emphasises the importance of targeted support for sectors that are known for generating a high number of jobs in sectors such as construction, tourism, textiles, and low-skilled manufacturing. Policies that support exports from labour-intensive sectors, like adjusting tariff structures and strengthening initiatives like the Production-Linked Incentive (PLI) schemes and Free Trade Agreements (FTAs), are also key to creating more employment opportunities.
Focus on rural areas
For rural areas, CII suggests introducing an internship program within government offices, specifically designed for college-educated youth. This program would offer short-term employment while helping to bridge the gap between education and practical skills. It would also provide additional support for the government’s rural initiatives, helping to make them more effective.
Increasing female participation in the workforce, which is currently low, is another critical area for growth. CII suggests several initiatives, such as building dormitories using CSR funds, formalising sectors like the care economy, and establishing creches in industrial clusters to make workplaces more accessible for women. Gender-sensitive policies for skills training and employment could help empower women economically and boost the overall workforce.
Rolling out the new Labour Codes and ensuring that gig and platform workers have access to social security will further strengthen the employment landscape. Additionally, India has an opportunity to address global workforce shortages, particularly in ageing populations. CII proposes setting up an International Mobility Authority under the Ministry of External Affairs, which would facilitate government-to-government collaborations to help Indian youth access overseas job opportunities. This authority could also work with the Ministry of Skill Development and Entrepreneurship to create skill development programs that align with global demands, including technical skills, cultural awareness, and foreign languages.
Global report on jobs
In a recent report, global consulting firm Deloitte highlights that India will need more formal and quality jobs to ensure better income distribution as it works towards becoming a US$5 trillion economy in the medium term, with the long-term goal of achieving Viksit Bharat, or a fully developed nation, by 2047.
In this context, expanding the manufacturing sector is crucial. Shifting workers into this sector, where 51.4% of jobs are salaried, will increase the chances of securing formal employment. This transition is especially important for those in rural areas who currently lack regular wages or social security, as it will improve their income stability. Additionally, growth in the services sector will help formalize more jobs, encouraging workers to pursue education and enhance their skills.
The report also points out that emerging industries like semiconductors and electronics will create more opportunities that require specialised skills and advanced education. This will lead to the creation of higher-quality jobs. On top of that, India’s push for clean energy alternatives will result in green jobs across various sectors, such as energy, agriculture, tourism, and transport.
According to the report, one of India’s greatest advantages is its young and ambitious population. Research shows that younger people tend to learn new skills more quickly, as their brains are naturally more flexible and exploratory. This gives India a strong advantage, enabling the country to benefit greatly from investing in the skill development of its youth.
