Report notes that construction remains a significant job creator in India, accounting for approximately 13 percent of total employment.

According to a recent report by Goldman Sachs, India will need to generate around 10 million jobs each year from FY25 to FY30 to support an annual GVA (Gross Value Added) growth rate of 6.5 percent. Key strategies identified in the report include stimulating the real estate sector through affordable housing incentives, as this sector employs over 80 percent of labor in construction, which could accelerate job creation across various skill levels.

The report further suggests establishing IT hubs and Global Capability Centers (GCCs) in tier-2 and tier-3 cities. This move aims to ease pressure on major urban centers while boosting job opportunities in underrepresented regions. Additionally, Goldman Sachs recommends directing fiscal incentives toward labor-intensive manufacturing sectors like textiles, food processing, and furniture to support jobs for low- to middle-skill workers.

While India’s Production-Linked Incentive (PLI) schemes have so far benefited mostly capital-intensive industries, the report highlights a promising shift toward labor-intensive sectors, such as textiles, footwear, toys, and leather goods. With 67 percent of manufacturing jobs in labor-intensive sectors, this shift aligns well with India’s employment targets.

The report notes that construction remains a significant job creator in India, accounting for approximately 13 percent of total employment. Investment in real estate and infrastructure has not only spurred job growth but also positively impacted incomes among low- to medium-income households. Additionally, the service sector, contributing 34 percent of India’s employment, has expanded, notably with retail trade benefiting from digital transformation.

India’s Labor Force Participation Rate (LFPR) has increased from 50 percent in FY18 to 60 percent in FY24, driven largely by female workforce participation, especially in rural areas. Factors such as improved measurement, financial inclusion through women-targeted credit schemes, and growth in small and micro-enterprises have fueled this rise.

With India in a unique demographic phase, boasting a low dependency ratio and a growing working-age population, the country has a vital 20-year opportunity to capitalize on this demographic dividend and meet its employment and economic goals.