Improving Labour Productivity for Viksit Bharat 2047

NITI Aayog Vice Chairman, Suman Bery, emphasized the need for India to significantly boost its labour productivity to achieve the vision of Viksit Bharat by 2047. Key steps include enhancing per capita income to approximately $18,000 from the present figure of $2,694.7 (as of 2024, World Bank).

Labour Productivity and Economic Growth

• India's labour productivity needs substantial improvement, currently overshadowed by China's achievements.
• To reach the target of $18,000 real per capita income by 2047, labour productivity must increase from the current $3,000 level.
• Establishing a direct correlation between per capita income and living standards is crucial.

Demographic Dividend and Workforce Participation

• India's demographic dividend should be integrated with productivity growth.
• Address the gender gap in labour force participation: 
  • Female participation was 33.23% in 2023 compared to male participation at 80.9% (World Bank).
  • Focus on mobilizing and integrating the skilled female workforce and removing barriers such as social and childcare constraints.

Investment and Economic Policies

• Raise investment rates by 2-3 percentage points of GDP to ensure capital deepening rather than capital shallowing.
• Overcome the impact of the 2008 global financial crisis on private investments.
• Encourage capital expenditure over operational spending to reduce carbon footprints during energy transitions.

Workforce Skills and Global Mobility

• Utilize domestic workforce skills and explore international worker mobility.
• AI presents opportunities and challenges, likely impacting advanced nations before India.
• Reassess entry points for unskilled workers, potentially shifting focus from manufacturing to services.

Sectoral Productivity and Policy Implementation

• Data insights from PLFS 2023-24 indicate: 
  • Agriculture employs 46.1% but contributes only 14.7% to GVA.
  • Services sector accounts for 54.6% of GVA with 29.7% of employment.
  • Industry contributes 30.8% to GVA with 24.1% of jobs.
• Policymakers need to focus on state-level productivity growth, leveraging the new labour codes for flexibility in employment practices.

Reorientation of Education System

• India's higher education needs to shift focus from government jobs and civil services exams to skill-based training for life.
• Adopt educational models that emphasize life skills, as seen in the United States.