China model of labour-intensive industries key to job creation: Survey

Given India's comparative advantage in labour-intensive activities, traditional unskilled labour-intensive industries such as textiles, footwear, toys and assembly hubs should be focused upon for job creation in the country, the Economic Survey said on Friday.

India has huge potential to emerge as a major hub for final assembly in a range of products, referred to as "network products" (NP), the survey said.

The experience of countries that have achieved rapid and sustained export growth, according to the Economic Survey, suggests that India can reap rich dividends by adopting policies aimed at strengthening its involvement in the export market for NP.

Citing example of China, the survey said that "Labour abundant countries, like China, specialize in low skilled labour-intensive stages of production such as assembly while the richer countries specialise in capital and skill-intensive stages such as R&D".

"Thus, the lead firms retain skill and knowledge-intensive stages of production in high-income headquarters (e.g., the US, EU and Japan) but locate assembly related activities in low wage countries (e.g., China and Vietnam)," it added.