India has been repeatedly bragging at international fora that it has a young population in contrast to the ageing population of the Western nations and it is this demographic dividend that will propel it to the front ranks of the global order in the years ahead.
However, the harsh ground reality is that the accelerated economic growth in recent years has not been able to create enough jobs for the fast growing workforce.
Only a small fraction of the country’s workers are employed in modern high-productive sectors of the economy such as auto, steel, telecom, pharmaceuticals and information technology. Official figures show that close to half the country’s population is still employed in agriculture. The vast majority of the rest of the people are either self-employed or engaged in low-paid jobs that at best ensure a meagre hand-to-mouth existence.
The IMF’s forecast released last week sees India surpassing China as the fastest growing emerging economy in 2015-16 on the back of recent policy initiatives of the new government, revival in investments and lower oil prices.
However, what the nation needs to look at more closely is that the Human Development Index figures which reflect the quality of life that an average Indian enjoys provide a very dismal picture. India has been ranked at a lowly 135 in the list of 187 countries, mercifully just above Pakistan and Bangladesh. The BRICS countries such as China and Russia, amongst which India is ranked, are placed way ahead.
According to NITI Aayog vice-chairman Arvind Panagariya less than ten million workers hold good private sector jobs in a country with 500 million workers. He has gone to the extent of terming this "a matter of national shame".
However, if Indian industry has to compete globally it has no choice but to go in for the latest technology which entails a high level of automation whether it be a car manufacturing plant or a steel factory. Rigid labour laws have been identified as a problem area coming in the way of increasing employment. There is no doubt a need for reforms that would accord industry a higher degree of flexibility in hiring instead of going in for the worse option of contract employment. However, mere labour reforms cannot lead to a surge in employment. India will, therefore, have to focus on its own model of economic development that enables the large-scale absorption of not-so-skilled manpower spread across a subcontinent-sized country.
Prime Minister Modi’s MUDRA scheme to provide "funds to the unfunded" at low rates of interest and without collateral may turn out to be the game-changer rather than the more high-voltage Make in India campaign. For even as the country needs modern industry it cannot afford to pay mere lip service to inclusive development as has been happening in the past. The PM with his grass roots feel of the Indian economy has been able to zero in on the right approach but banks will have to take it up from here to extend the credit lifeline to small ventures.
Young energetic bank managers and their staff would have to carry the initiative forward with a patriotic zeal to transform the lives of millions of people.
The prime minister has reeled out official statistics revealing that only 1.25 crore people find employment in large industries, whereas small enterprises employ 12 crore people in the country.
Clearly as far as job creation goes it is the smaller ventures that will yield higher results and yet this sector has been starved of funds. The provision of more jobs in smaller towns and villages will also check the poverty-driven migration to bigger cities such as Delhi and Mumbai which are bursting at the seams with slums cropping up in every nook and corner.
The infrastructure in these cities has been stretched to breaking point, impacting the overall quality of life. The opening up of employment opportunities in small-scale private sector enterprises would also reduce the desperation for government jobs which has led to rampant corruption. It is an open secret that bribes are often paid to get government jobs whether it be that of a policeman or a school teacher.
It is indeed a sad reflection on the state of affairs that a former chief minister of a state is languishing in jail after being convicted in a scam related to the recruitment of school teachers. A fresh scandal pertaining to government jobs has now erupted in another state bringing yet another chief minister under a cloud.
Those that offer bribes in sheer desperation to get a job have to recover the money through corruption which becomes the main objective for them instead of service to the people. Consequently, entire society suffers. There have already been some success stories in the micro-finance segment, especially in the case of women self-help groups, but these isolated cases need to be replicated on a nation-wide scale. It may not be easy but it is definitely doable and needs to be done on a war footing.
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