By TIOL News Service

ROME, JAN 26, 2013:  DEVELOPING countries are witnessing surge of the middle class, leading to their emergence which could give a push to to a much needed global growth by boosting consumption, thereby refueling the sinking economies paving their way towards growth particularly in the poorer parts of the developing world.

According to the recent report by ILO the middle class is rising in developing countries constituting about 42 per cent of workers, or nearly 1.1 billion, families living on over Rs 225 (USD 4-13) per person per day.

By 2017, the developing world could see the addition of 390 million more workers in the middle class. However, the report raises a red flag for employment growth in 2013-14, even if there is a moderate pick-up in output growth. It estimates that the number of unemployed worldwide may rise by 5.1 million to more than 202 million in 2013 and by another 3 million in 2014, half-a-million of which will be youth.

The report revealed that in India, growth in investment contributed 1.5 percentage points to the overall GDP growth over the past year, down from 1.8 percentage points in 2011, while the contribution from consumption declined to 2.8 per cent versus 3.2 per cent the previous year.

The report called for focus on both employment creation and labour productivity in India. It revealed that in India, even where jobs were created, a large number of workers remained in agriculture (51.1 per cent), in the urban informal sector or in unprotected jobs (contract) in the formal sector. The share of workers in manufacturing was just 11 per cent in 2009-10, no higher than a decade earlier. Like many regions, growth has failed to deliver a significant number of better jobs in the formal economy.

According to report in India, the share of formal employment has declined from around 9 per cent in 1999-2000 to 7 per cent in 2009-10, in spite of record growth rates. The share of workers in informal employment in the non-agricultural sector stood at 83.6 per cent in India (2009-10), 78.4 per cent in Pakistan (2009-10) and 62.1 per cent in Sri Lanka (2009). The unemployment rates increased rapidly for high-skilled workers, especially women. Indians with a diploma suffer particularly, with unemployment rates reaching 34.5 per cent for women and 18.9 per cent for men during 2009-2010.