Boost manufacturing, farm sector for more jobs

 The UN report on human development in the Asia-Pacific region, released on Wednesday, is an important reminder that unless economic growth is accelerated sooner than later, this country’s much touted demographic dividend will turn into a demographic disaster. Already, the UN report notes, the Indian economy could only employ 140 million of the 300 million people that joined the workforce between 1991 and 2013. Note that this includes the years of high growth rate which put India on the map of emerging economies. The report also estimates that by 2050, at least 280 million more people will enter the job market and the country’s working age population (individuals between the ages of 15 years and 64 years) will be pegged at more than one billion. If the economy cannot provide jobs for all these young people, large-scale civil unrest will become a real possibility, not to mention widespread poverty and an unsustainable pressure on national resources. A multi-pronged solution is the need of the hour. As the UN report notes, this must include a renewed emphasis on the manufacturing sector which currently has a small base, contributing to only 15 per cent of the Gross Domestic Product and 11 per cent of employment. The Modi Government is, of course, working in this direction with the Make in India programme, its flagship initiative to boost domestic manufacturing. However, for Make in India to succeed, it is not enough to create a business-friendly environment or incentivise foreign firms to set up shop in this country. It will be equally important to ensure that those at whom these employment opportunities are directed are also capable of leveraging them. In other words, there has to be greater emphasis on education and ensuring that those who entering the work force are indeed employable. This needs urgent attention especially as India eyes the higher skilled jobs in the manufacturing sector  for example, production of high-end weapons systems. The other issue to keep in mind is that there are limits to how far the manufacturing sector can go in delivering new jobs. As some experts are suggesting, the manufacturing sector’s golden days may be over, as productivity increases faster than demand, and increasing mechanisation continues to kill more and more jobs, mostly at the bottom of the skill pyramid.

In India, the other key sector, apart from manufacturing, is agriculture. The farm sector needs to grow apace with manufacturing  and more so, since it is still the primary source of livelihood for more than half the country’s population but only contributes to about 16 per cent of the national GDP. This situation will only worsen as land pressures increase. Thankfully, the Modi Government has taken some serious, large-scale measures to reforms in the farm sector (particularly in this year’s Budget) but there’s still a long way to go. The public must also do its bit by focusing on entrepreneurship and self-employment