But that might be precisely the wrong direction.
An estimated 10 million workers will enter the labour force every year for the next 15 years. And by 2020, about 64% of India’s population will be in the working age group, between 15 and 59 years.
To take advantage of this demographic dividend, relying on farming might not cut it, a recent Reserve Bank of India study suggests.
That’s because economic growth in India has generated fewer jobs in agriculture compared to other sectors. The study examines so-called employment elasticity, based on jobs generated in India between 1993 and 2012.
Employment elasticity is a measure of the percentage change in the employment rate as measured by a single percentage point change in economic growth. Effectively, it indicates the potential of a sector to generate employment as it develops.
While sectors such as construction have seen an increase in employment elasticity, agriculture has witnessed a fall. Other areas of growth include apparel, furniture, leather and automotive industries.
With millions expected to join the workforce annually, finding enough jobs will be a challenge, the study notes, especially considering structural changes that the Indian labor market. These include more and more people moving away from agriculture, and a reduction of women in the labour force as they move towards education.
“The non-farm sector has to gear up to shoulder the burden of agriculture,” the study concludes, while suggesting a renewed focus on India’s lagging manufacturing industries to absorb a larger percentage of the workforce.
When it comes to job creation, the farm is not the future.