Focus on industry, services to create jobs: NITI Aayog vice chairman Arvind Panagariya

NEW DELHI: NITI Aayog vice chairman Arvind Panagariya has said the country needs to focus on creating more jobs in the industrial and services sector as the potential of farm sector to bring prosperity to a vast population in the long-run is limited.

Citing data, he said area under non-agricultural use, which includes housing, industry, offices, roads, railways among others, was only 8% in 2011-12, while fifteen years earlier, in 1997-98, this proportion was 7%.

"Accelerated growth over these fifteen years facilitated by the 1 percentage point increase in non-agricultural use of land has produced more gains in per-capita income and poverty reduction than what had been achieved over the entire fifty preceding years," he said, adding that a common fear aired in the media is that the expansion of industry and services would divert land away from agriculture, thereby undermining food security.

In his first blog published on the newly launched website of NITI Aayog, Panagariya said, "...In countries experiencing growth rates of 6% or more over long periods... industry and services have grown substantially faster than agriculture... In this context, the creation of good jobs in industry and services is critically important." He said with the share of agriculture in the GDP at about 15% now, workforce engaged in this sector is significantly poorer than the other half employed in industry and services.

He said, "...agricultural growth and the expansion of good jobs in industry and services can go hand-in-hand to bring rapid elimination of poverty and shared prosperity for all."

Panagariya said unless workers have the opportunity to migrate to better paid jobs in these sectors, they will not be able to fully participate in the prosperity experienced by a fast-growing economy.

Citing the example of South Korea and Taiwan, where prosperity was widely shared during the 1960s and 1970s because workers in agriculture could migrate to good jobs in industry and services, he said Indian farmers and their children recognize the superior prospects that faster-growing industry and services can potentially offer.

In his post, Panagariya quoted a recent survey conducted by NGO Lokniti, which revealed that 62% of all farmers say that they would quit farming if they get a job in the city. As for their children, 76% say that they would like to take a profession other than farming.

He said that the 'Make in India' campaign has provided the umbrella for many of the government's initiatives in this context. Panagariya said using the instrumentality of cooperative federalism, the government has encouraged states to undertake labour law reforms to stimulate jobs.