Job creation for youth is govt's top priority, says Arun Jaitley
Impact of US Fed move, global slowdown in investments seen as areas of concern
NEW DELHI: Finance minister Arun Jaitley has said the highest priority for the government at this juncture is to create new jobs as millions of young people enter the workforce every year on account of favourable demographic changes.
Employment creation, a global slowdown in investments and the impact that the US Federal Reserve’s move to restore normal monetary conditions can have on emerging economies are three policy challenges, Jaitley said at a discussion of the International Monetary and Finance Committee (IMFC), the panel that advises IMF, a statement from finance ministry said on Sunday. The meeting took place in Washington on Saturday.
Monetary policy tightening in the US could cause capital outflows from emerging economies such as India and Brazil, affecting their current account deficit.
“India is currently one of the few large economies in the world in the virtuous phase of its demographic transition and the most important priority of the government is to find ways to provide employment to the 12 million young people entering the workforce annually,” the statement said citing Jaitley.
IMF had on 10 October lowered its growth forecast for the Indian economy by half a percentage point to 6.7% for 2017, blaming the aftershocks of demonetisation of high value currencies last year and the roll out of the Goods and Services Tax (GST) in July.
“For creating more jobs in the traditional way, manufacturing and construction sectors have to improve. These two sectors have not been doing well in the recent past. We also need to restore the competitiveness of sectors such as textiles, gem and jewelry, which contribute to job creation. We need to act fast on these,” said D K Joshi, chief economist at rating agency Crisil.
Joshi said that use of artificial intelligence has also been affecting employment in the IT as well as the IT enabled services sector.
Jaitley also said at the discussions that finding ways to revive investment is critical to sustaining global growth, for which collective and co-ordinated action was needed.
The minister also pointed out that cyber threats to the interconnected global financial system was another challenge to the global economy.