India needs to create high-quality jobs, increase productivity growth: IMF
India’s Growth Ambition: Why High-Quality Jobs and Productivity Must Become the Next Economic Priorities
India’s economic growth story is entering an important phase. With favourable demographics, a large domestic market, expanding infrastructure and continuing structural reforms, the country has strengthened its position as one of the world’s most significant growth engines. However, sustaining this momentum will require more than increasing economic output. It will demand a fundamental shift towards higher productivity, stronger private investment and the creation of high-quality employment opportunities.
The International Monetary Fund (IMF) has highlighted this challenge while upgrading India’s medium-term potential growth estimate to 6.8 per cent, from its earlier projection of 6.5 per cent. The revised estimate reflects the country’s favourable demographic profile, the strength of its expanding domestic economy and continued progress on structural reforms. Yet, the IMF’s message is clear: achieving this potential will depend on how effectively India translates its economic advantages into productivity improvements and sustainable employment.
Speaking to reporters on November 12, 2026, Julie Kozack, Communications Director at the IMF, emphasised that India must continue implementing reforms, particularly those that improve productivity growth. She noted that stronger private investment and faster creation of high-quality jobs would be essential to strengthening the country’s medium-term growth potential. These priorities are expected to feature in the IMF’s forthcoming Article IV consultations with India.
The IMF’s assessment comes against a backdrop of improving growth expectations. In October 2026, the organisation upgraded India’s growth forecast for fiscal years 2027 and 2028 to 7 per cent, compared with its July projections of 6.4 per cent and 6.7 per cent, respectively. Kozack also described India as a key growth engine for the global economy, highlighting its strong economic fundamentals and demonstrated resilience.
However, the distinction between economic growth and the quality of growth deserves particular attention. An economy can expand through higher investment, consumption and infrastructure development, but the long-term sustainability of that expansion depends significantly on how efficiently its workforce, capital and technology are utilised.
This is where productivity becomes central to India’s next development phase.
For businesses, productivity is no longer simply about increasing production volumes or reducing operating costs. It increasingly involves improving workforce capabilities, adopting advanced technologies, strengthening operational processes and developing more effective management systems. In manufacturing, for instance, productivity improvements depend on equipment utilisation, process optimisation, quality management, employee skills and the ability to reduce operational waste. In services, they are closely linked to digital adoption, knowledge capabilities, innovation and the effective deployment of human capital.
The creation of high-quality employment must therefore become an integral part of the productivity agenda. Employment numbers alone cannot adequately measure the strength of a labour market. The nature of jobs, compensation, workplace security, opportunities for skill development, career progression and access to social protection are equally important indicators.
India’s demographic advantage presents a significant opportunity, but demographics alone do not guarantee economic dividends. A growing working-age population must be supported by employment opportunities that match emerging industry requirements. The challenge is not merely to bring more people into the workforce but to create productive roles that enable individuals to contribute meaningfully to organisational and national economic performance.
This has important implications for India’s corporate sector. Organisations will need to rethink their approach to workforce planning, talent acquisition, employee development and performance management. Traditional models focused primarily on headcount expansion and cost efficiency may not be sufficient for businesses operating in an increasingly technology-driven and competitive environment.
The next phase will require a stronger connection between business strategy and human capital strategy. Companies must identify the capabilities required for future growth, assess existing workforce gaps and invest in structured reskilling and upskilling programmes. Artificial intelligence, automation, robotics, data analytics and digital manufacturing are changing job requirements across industries. The challenge for employers will be to ensure that technological transformation is accompanied by workforce transformation.
Private investment will also play a decisive role. While public infrastructure investment can create favourable conditions for economic activity, sustained private-sector investment is essential for expanding productive capacity, generating employment and encouraging innovation. Businesses need confidence in the regulatory environment, access to capital, infrastructure reliability and the availability of skilled talent to make long-term investment decisions.
For India’s manufacturing sector, this presents both an opportunity and a responsibility. As global supply chains continue to evolve, India has the potential to strengthen its position as a competitive manufacturing destination. However, attracting investment will require more than competitive labour costs. Manufacturing organisations must demonstrate higher operational efficiency, consistent product quality, technological readiness and the availability of skilled workers.
The relationship between workforce quality and industrial competitiveness will become increasingly important. Organisations that invest in technical training, supervisory capabilities, employee engagement and workplace safety are likely to be better positioned to improve productivity sustainably. The contribution of employees must be recognised not simply as an operational input but as a strategic driver of business performance.
There is also a need to reconsider how productivity gains are distributed across the economy. Sustainable growth should create opportunities for employees to benefit through better wages, improved working conditions, stronger social security and career advancement. When employees experience greater economic security and professional development, organisations can build stronger engagement, retention and workplace trust.
This makes the quality of employment a business competitiveness issue as much as a social development priority.
Policymakers, employers and educational institutions must also work more closely to address the gap between academic qualifications and industry requirements. Industry-aligned vocational education, apprenticeships, technical certifications and work-integrated learning can help prepare young people for emerging employment opportunities. At the same time, continuous learning must become a normal part of organisational life rather than an occasional training intervention.
For HR leaders, the IMF’s assessment offers an important strategic signal. Human resource management must move beyond traditional administrative and transactional responsibilities and become more closely integrated with enterprise productivity, workforce economics and organisational transformation. HR functions will increasingly be expected to demonstrate how talent investments influence revenue per employee, labour productivity, operational efficiency, workforce capability and business outcomes.
The future of India’s growth will not be determined solely by how much capital the country attracts or how rapidly its industries expand. It will also depend on how effectively organisations convert investment into productive employment, technological advancement and improved human capabilities.
India has the demographic strength, market potential and reform momentum to support its upgraded medium-term growth ambition of 6.8 per cent. The challenge now is to convert that potential into measurable improvements in productivity and employment quality.
Ultimately, the next chapter of India’s economic development must be about creating not just more jobs, but better jobs; not just expanding businesses, but building more productive enterprises; and not just growing the economy, but improving the quality of economic opportunity available to its people. That will be the foundation of a more resilient, competitive and inclusive growth model. For further insights into the evolving workplace paradigm, visit
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