Skyline of Hyderabad, India

Economic situation Great potential – but a lack of jobs and training places

Until the COVID-19 pandemic broke out, India had been experiencing stable economic growth for many years. In 2020, gross domestic product (GDP) fell by 7.3 per cent as a result of the COVID-19 crisis. Yet for the next few years after that the International Monetary Fund (IMF) is already anticipating growth of more than 8 per cent (as at April 2022), which means that the economy will be back to where it was before the crisis. In some fields – for example, information technology, pharmaceutics, space flight and biotechnology – the country is a global leader.

Great need for jobs and training places

There is still a considerable imbalance in India’s economy: the size of some economic sectors measured by their share of gross domestic product is not reflected in the number of jobs in the respective sectors. Currently, only about 2.2 per cent of Indians between the ages of 15 and 59 have done any kind of formal training. More than 40 per cent of the working population is employed in the agricultural sector. However, that sector’s share of GDP has shrunk over the years to a mere 18 per cent. Growth and prosperity are being generated primarily by the services sector, which accounts for 49 per cent of GDP. However, the services sector provides jobs for only about a third of the population. A very large share of the Indian workforce is employed in the informal sector.

What the country needs in order to defeat poverty is a great many new jobs – especially but not only for unskilled and low-skilled workers. There also needs to be a far greater range of better-quality training places on offer.

Agriculture: Agro-ecology for more sustainability

Indian agriculture is largely geared towards self-sufficiency. Rural development, agriculture and food production are traditionally a key topic in politics and society. In order to feed its growing population, India pursued an approach known as the “green revolution” for many years, which was based on intensive farming and a small palette of staple foods. This made it possible to make important progress in terms of achieving food security. At the same time, however, this policy also played a major part in causing soil degradation, water shortages and water pollution, high levels of pesticides in food and loss of biodiversity, and in cementing social inequality.

Because of population growth, in many regions the size of the cultivated areas is constantly shrinking and more and more people no longer have land of their own. Many small farmers must rely on loans to buy fertiliser and seeds, and to pay for irrigation water, and as a result they are often highly in debt.

In light of this situation there is increasing discussion in India about establishing agro-ecological approaches as sustainable methods of farming. This approach is meant to improve the incomes and the economic viability of smallholder farms, allow the soil to recover, increase productivity and the range of different products, and thus improve food security.

India is promoting agro-ecological approaches via several national and state-wide programmes. The National Mission for Sustainable Agriculture was launched in 2016 for the purpose of promoting organic farming. The Indian government’s goal of founding more than 10,000 new producer organisations or cooperatives by 2024 is also tied to the same mission.

As at: 02/08/2022