India faces a pressing need to create an additional 148 million jobs by 2030 to keep pace with its growing population, Gita Gopinath, the first deputy managing director of the International Monetary Fund, said on Saturday.

Speaking at the Delhi School of Economics’ Diamond Jubilee event, Gopinath pointed out that India has lagged behind other G20 nations in employment generation, despite impressive economic growth.

Over the past decade, India’s economy grew at an average rate of 6.6 per cent, yet the country’s employment rate languished below 2 per cent, Gopinath noted.

She underscored that this rate is markedly lower than that of its G20 peers.

“Given India’s projected population growth, the country will need to create between 60 million and 148 million additional jobs by 2030,” she said. “The clock is ticking — we are already in 2024, and the challenge is immense.”

To meet this challenge, Gopinath emphasised the need for comprehensive reforms, particularly in land and labour markets. She also called for a significant increase in private investment, which she noted has not kept pace with the country’s 7 per cent GDP growth.

“While public investment is robust, private investment must rise substantially,” she said, adding that India’s education system needs an overhaul to equip the workforce with the skills required for a rapidly evolving economy.

Gopinath also highlighted the importance of improving the ease of doing business, refining the regulatory framework, and broadening the tax base to sustain economic growth and facilitate job creation.

More reforms needed

She warned that India must undertake further reforms to maintain its growth trajectory and realise its ambition of becoming a pivotal player in global supply chains. Specifically, she pointed to the need for lowering of import tariffs, which are higher than those of comparable economies.

“If India is to play a significant role on the world stage, particularly within global supply chains, it must reduce these tariffs,” Gopinath said.

While acknowledging India’s aspiration to achieve developed country status, Gopinath cautioned that such a goal requires consistent and widespread efforts across various sectors.

“India is currently the fastest-growing major economy, with a growth rate of 7 percent,” she said.

“The challenge now is to sustain and even accelerate this growth to raise per capita incomes and move closer to the status of an advanced economy.”

Open to collaboration

India is open to exploring more ways to increase its collaboration with the IMF, finance minister Nirmala Sitharaman said during a meeting with Gita Gopinath on Saturday.