The Chief Economic Advisor (CEA) V Anantha Nageswaran called on the private sector to step up for generation of jobs in the country in the economic survey. The observation comes at a time when the issue of unemployment is being debated in the country.
Addressing the need for private sector to step up, the CEA noted that the corporate sector "has never had it so good". The document noted, "Results of a sample of over 33,000 companies show that, in the three years between FY20 and FY23, the profit before taxes of the Indian corporate sector nearly quadrupled. Further, newspaper headlines told us that the corporate profits-to-GDP ratio rose to a 15-year high in FY24."
Advertisement
However, it noted that the hiring and compensation growth has not been able to keep pace with the growth in profits of the companies. CEA said in the annual report that it is in the interest of the companies to step up hiring and compensation.
Private sector has been lagging behind the government when it comes to investment. The economic survey noted that cumulative growth in non-financial private sector's Gross Fixed Capital Formation (GFCF) at current prices stood at 52 per cent, 12 per cent lower than government's investment.
Advertisement
However, the report also noted some positive signs about private sector's investments. "General government GFCF rose a cumulative 42% between FY21 and FY23. Non-Financial Private Sector’s overall GFCF increased by 51 per cent," it said.
Moreover, the CEA called on the private sector to also think about how artificial intelligence will augment labour rather than displace workers.
Addressing the ability of Indian economy to produce jobs, the economic survey said that it is difficult to make any definite conclusion as the country suffered from dual shocks. It noted that the first was rise of bad debts in the banking sector and high corporate indebtness. The second was the Covid pandemic. The back to back situation influenced the trend of employment generation, as per the economic survey.
