India has seen higher employment growth in capital-intensive sectors than in labor-intensive sectors, especially in subsectors such as electronics, chemicals and machinery. According to the Goldman report, both employment and exports in these sectors have grown significantly in the last ten years. This is because the government has focused on the assembly of products such as electronics, machinery and pharmaceuticals, leading to double-digit growth in exports to developed markets. In addition, India has also made progress in exporting high-value products.
The report also says that capital-intensive industries experienced greater employment growth than labor-intensive sectors. For example, sectors such as chemicals and machinery experienced employment growth, while labor-intensive sectors such as textiles, footwear and food beverages experienced lower growth.
India’s manufacturing sector is now undergoing a significant transformation, driven by government reforms. Its main objective is production-linked incentive plans (PLI), which are launched with the aim of increasing national production, promoting technological progress and attracting investments. An incentive of Rs 1.97 lakh crore has been spent under these schemes, implemented from 2020, covering 14 major sectors. These include sectors such as electronics, pharmaceuticals, drones and specialty steel. The objective of these plans is not only to increase production capacity and create employment opportunities, but also to promote exports and reduce dependence on imports. By June 2024, these schemes attracted investments of Rs 1.32 lakh crore and increased manufacturing output by Rs 10.9 lakh crore. Furthermore, these schemes have created 8.5 lakh new jobs, which is strengthening the Indian economy.
