Job Crisis: What Could Turn the Tide?
So much has already been discussed about the declining growth rates in India and the resultant job losses as well as unemployment, to even dwell upon it appears redundant. In fact, open any newspaper and the story glares at you from the front page itself. Reports of unemployment touching a 45-year high had shaken things up when it appeared in the Economic Times some months ago.
The Labour Force Survey of the National Sample Survey Office (NSSO) released in May suggested that for 2018, the rural unemployment rate stood at 5.4% while in urban centres it was 7.8% resulting in an overall rate of 6.1% for India. Ironically, the data came barely days before the General Elections but in spite of the Opposition seeking to use it against the Modi regime, it didn’t work.
While a decline in economic growth is considered to be one strong reason for the reducing jobs, automation is also being looked as a culprit, even though it’s in its infancy as far as India is concerned. The question is how much blame can be put on automation for the growing unemployment. We must remember that India is a developing country where technology cannot be an answer to everything.
At the Third edition of The Economic Times India Dialogues in Bengaluru, TV Mohandas Pai, Chairman of Aarin Capital, a venture firm, said, “Unlike the West, where a large proportion of workplaces employ the middle class, which could be lost due to automation, India has far different requirements. In India, the impact is going to be far lesser when compared with the developed nations.”
While this is true to a great extent when it comes to manufacturing industry, the fact remains that in certain tasks such as building roads, the advent of smarter machines that lay the roads has left the number of manual labourers employed at a considerably lower level. Of course, the pace at which roads are made has also grown considerably due to the limited automation efforts.
Given that India requires lots of labour in construction highlights this part of the story, which is possibly the reason that discussions at the event centred largely around generating employment on micro-entrepreneurship.
As part of the project to develop the nation, there are still about five thousand small towns which should be urbanised and focused upon. Of late, India has become the hub of entrepreneurs and the small towns of India house many such micro-entrepreneurs. These entrepreneurs hold immense potential of giving a fillip to local economies and drive consumption.
The speakers highlighted the fact that to bolster the economy again, it is important to gear up the consumption which can be driven well by the micro-entrepreneurs. Mohandas Pai, formerly the CFO at Infosys, said, “Government doesn’t have any strategy on employment creation. Each state should have a job policy within the state, based on district-wise economic condition.”
It is high-time that we push the technology and focus on both entrepreneurship as well as jobs, given that one cannot exist without the other.