India requires an annual GDP growth of at least 9-10% to create enough jobs for the country's growing workforce, while a growth rate of 14% would be needed to include the backlog of unemployed workers accumulated over the years, according to Morgan Stanley's Chetan Ahya. As reported by NDTV Profit, Ahya, Managing Director and Chief Asia Economist at Morgan Stanley, noted that while acknowledging the government's push to boost capex and growth, a coordinated and long-term strategy must be adopted to generate employment opportunities. This is significant as demographic trends offer a massive growth opportunity but also increase the urgency of creating jobs at scale. Citing an earlier Morgan Stanley report, Ahya explained that "We had analysed what kind of GDP growth India would need to achieve to take care of new additions to the workforce, and that will be around 9-10%." He added that "If you want to take care of the backlog—i.e., the working-age population growth we had in the past—and employ them as well, then India needs to have 14% GDP growth."
To address the employment challenge, Ahya suggested setting up a team of around 500 professionals within the Prime Minister's Office to formulate workforce strategies, which would be further supported by a larger execution team of about 10,000 people working at the state government level. According to NDTV Profit, this proposed structure would help to identify sectors with the highest growth potential over the next decade and develop entire supply chains around them to maximise employment generation. Ahya further mentioned that the government has already adopted such a measure in the electronics manufacturing sector, but noted similar efforts are required across multiple emerging industries. While acknowledging that substantial work is already underway, Ahya said "much more remains to be done to fully capitalise on India's demographic dividend and ensure adequate job creation in the country."
The recommendations come as India now hosts half the world's capability centres, which add 2% to GDP, as reported by NDTV Profit. Ahya noted that while substantial work is already underway, much more remains to be done to fully capitalise on India's demographic dividend and ensure adequate job creation in the country. The economist cited an earlier Morgan Stanley report that analysed what kind of GDP growth India would need to achieve to take care of new additions to the workforce, determining the 9-10% requirement for current workforce needs.
Recent market developments show positive momentum with Goldman Sachs identifying 15 large-cap Indian stocks for the second half of 2026 recovery, including Mazagon Dock Shipbuilders and HDFC Bank among their picks. As reported by NDTV Profit, the brokerage's list includes Mazagon Dock Shipbuilders and Hindustan Aeronautics tied to the defence and aerospace theme, which remains "strategically important" for the government over the medium term. HDFC Bank was screened among the most reasonably valued names, trading at 15 times forward earnings with a PEG ratio of just 1.1 times. The median stock in Goldman Sachs' basket trades at 34 times forward earnings with a PEG ratio of 2.0 times, indicating selective opportunities in the current market environment.
