NITI Aayog vice-chairman Arvind Panagariya on Monday has said that underemployment is probably the biggest economic challenge that India faces currently. Panagariya was speaking at the Aayog’s day-long conference of state chief secretaries in New Delhi. He said quick growth can be attained by moving workers out of agriculture to industry and from smaller enterprises to bigger ones.
“Underemployment is probably the biggest economic challenge we face… as many as 44.2 crore workers or 91.2% of the total were employed in agriculture or enterprises with nine or fewer workers,” he said.
Extreme employment in agriculture (46.9%) with lesser output (18%) was slowing development, and handling that is the method to achieving growth. “At the aggregate macro level, bringing about rapid growth is most critical — no major success in poverty alleviation is likely without it,” the economist said.
“If we set the output per worker in agriculture equal to 1, then output per worker in industry is 5 and that in services 3.8,” he added. “In other words, even at the current productivity levels in each sector, moving one percentage-point workers out of agriculture into industry can increase the GDP by 1.5%,” he said.
He also suggested that the governments at the Centre and the states need to create a policy atmosphere for enterprises to grow. His statements come at a time when the Modi government is already facing criticism for massive unemployment condition.
