Sustaining India’s Growth Rate
At a time when unemployment has become one of the biggest challenges for the country, impressive growth in the manufacturing sector during the second quarter of the ongoing fiscal brought a sigh of relief as higher growth rate will create more employment opportunities. It is the first time in recent times that India’s manufacturing sector has done so well in a particular quarter and it is expected to carry the momentum on to the remaining quarters. Such a scenario will likely allow the Indian economy to grow nearly eight per cent in the ongoing fiscal with the manufacturing sector being a major contributor. The sector’s growth is no mean achievement considering the prevailing conflict-situations in the world. The performance of the manufacturing sector had been stunted by the COVID-induced lockdown in 2020. According to experts, the slump in the sector is now almost over due to two primary reasons. Firstly, the market has returned to normalcy as united efforts have been able to tame the pandemic and secondly the government initiated steps to revive the sector in an effort to strengthen the economy.
According to the Centre for Monitoring Indian Economy (CMIE), the country’s unemployment rate was 8.11 per cent in March 2023. Later it rose to 10.05 per cent in October. The unemployment rate appears to be alarming in states like Haryana, Rajasthan, Bihar, Jharkhand and Jammu & Kashmir. In March this year, the urban unemployment rate in the country stood at 7.03 per cent, while the rural unemployment rate was 7.44 per cent. Clearly, some immediate steps are required to bring the unemployment rate down at the earliest. In this context, the result of the second quarter is indicative of a turnaround, as apart from the manufacturing sector, service and construction sectors have also registered impressive growth. The growth in these sectors will effectively open more employment avenues for youths looking for jobs. Economists are hopeful that if the present trend continues, the unemployment rate in India will be drastically reduced. It is important to note that unemployment can disturb social harmony and create problems in society. Thus, it is a priority for any government to provide employment to deserving youths.
While the manufacturing and service sectors are doing well, India must prioritise its primary sector in-order to ensure speedy economic development. Although the primary or agriculture sector has registered a growth of 1.2 per cent in the second quarter, it is still below par as nearly 50 per cent of the Indian workforce is engaged in this sector. The sector needs robust growth to reduce the rural unemployment rate. At the same time, a healthy primary sector will provide the much-needed push to the manufacturing sector as a good yield of agricultural products will increase the purchasing capacity of rural India, where nearly 70 per cent of the Indian populace resides. The primary sector needs a thrust to contribute as heavily as the other sectors. The government must develop a roadmap for the revival of the primary sector as without its support, it will be difficult to sustain the present growth rate.