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India needs to grow at least 8pc to cut jobless: UNIDO

AFP, New Delhi
India's economy must grow a minimum of eight percent every year to dent poverty and unemployment levels, a senior UN official said Friday.
George Assaf, the South Asia chief of the United Nations Industrial Development Organisation (UNIDO), said India had proved its "resilence to shocks" but sustained eight percent growth "was hard and needed changes."
"The economy has reached the magic eight percent growth rate but it remains to be seen whether it's a one-year-wonder based on a bumper monsoon or a breakthrough for India on the way to becoming an economic superpower," Assaf said.
"What is ignored is that eight percent growth may well be the minimum required target to tackle high unemployment and poverty levels that confront India," he said, at a function to release his book 'Too many with too little.'
The governent does not release official unemployment data but an internal government document put the jobless figure at 18.7 million people in 1997 and economists say the figure has risen since then.
India's economy grew 10.4 percent on year in the December quarter, largely thanks to India's best monsoons in a decade that led to an agricultural rebound in the farm-dependent nation of over billion people.
India's Central Statistical Organisation recently said the economy was expected to grow 8.1 percent in the 2003-2004 financial year after expanding just 4.0 percent in 2002-2003 due to a drought in key agricultural states.
A bumper harvest this year is also seen as boosting rural incomes and pushing demand, which in turn will help manufacturing. More than 70 percent of Indians rely on agriculture for income.
Other economists at the function said India's "tired" farm sector would be unable to create the new jobs for India's billion-plus population.
"From agrarian, India's economy has leapfrogged into being service-dominated -- skipping out on the industrial phase in between," said Subir Gokarn, chief economist of leading domestic credit rating agency CRISIL.
"There hasn't been the adequate transformation in people. Can Indians now be redeployed? Learn new skills? It is critical that enough
people be put to those jobs that are actually going to drive growth."
India's National Association of Software and Service Companies (Nasscom) said the country's burgeoning IT sector was looking at a massive shortfall in skilled manpower.
"The shortfall is expected to be of the order of half a million personnel by 2009, around 23 percent of the industry's requirements of 2.1 million people for the IT and services sectors," said Kiran Karnik, Nasscom president.
"The total manpower needed by the IT services segments will amount to around four to six million by 2012," he added.
Assaf, however, said IT alone was not the answer for absorbing India's working age population.
"The IT sector cannot be the solution by itself. Only labourintensive industry can do this because agriculture already has a surplus of labour," said the UN official.
India's working age population is expected to rise to 62 percent of the total population by 2015. This population will be largely unskilled.