A new IDFC Institute report on Infrastructure Priorities for Job Creation in India finds that building roads has the largest impact on employment generation for firms involved in agro-allied and services activities. For industrial firms, investing in resolving water supply issues has the greatest impact on job creation.
The report surveyed 2,500 firms in 18 selected districts to estimate the employment elasticity of different types of infrastructure by calculating the effect of a 1% increase in costs savings associated with improvement or provision of the infrastructure on percentage change in employment. The findings can be seen in Figure 1.
For every 10% in costs saved by firms due to improvement or provision of roads, firms in a services and agro-allied region could potentially increase the number of people they hire by 5.6% and 1.9 % respectively. Firms in an industrial region could increase the number of people they hire by 4.3%, for a corresponding 10% in costs saved by the firms due to resolving or providing water supply.
The IDFC Institute report can be accessed here.