Sectoral growth, apt policy must to boost employment: Pros

Addressing issues of joblessness should be the priority for anybody in the state, says Sachin Pilot , Minister of Corporate Affairs. India has rarely seen jobs being on the top of the agenda. In a discussion on CNBC-TV18 involving the prospects of addressing employment issues, figureheads from different professions spoke on India’s problems with attending to these issues.

Unemployment is never on the agenda book just like malnourishment never is; some of them do not have political motive, adds Pilot. Meanwhile, Chanda Kochhar, managing director of ICICI Bank believes that India could only establish better jobs data if there is employment across sectors. Manufacturing sector needs to add more jobs and ensure that the burden of creating employment is left on to the service sector, adds Kochhar. Santosh Mehrotra, Director General of Institute of Applied Manpower Research says that India’s jobs grew in 2010 period as a result of increased import intensity in the manufacturing sector. It is not a favourable situation too, he adds. Also read: With new statehood & Hyderabad, will Telangana grow faster? Below is the edited transcript of their interview to CNBC-TV18. Q: An economy that is now growing between 5-5.5 percent, the biggest challenge is going to be managing the expectations and the aspirations of this young population. Very often we hear the government talking about what is on the agenda but very rarely do we actually hear talks about jobs being on the agenda. In the upcoming elections, are jobs going to be right on top of the electoral agenda? Pilot: I don't think it is particularly about elections. Those are election times; it is a crowded mentality at that point. I agree with Chanda Kochhar that for an economy that is as large as India, it has to be the top most priority for everybody including the corporate sector, citizens, policy makers, state governments. If you have growth that perhaps by itself is not enough. You can have a robust economic GDP growth. For a politician, it is by far the most important thing to have a young population that is educated, willing to work but still not having enough jobs. That situation is certainly not welcomed at all. From the governments point of view no one really goes out and says well we have created X thousand jobs or X million jobs. Q: What you want to create? There is not even a number of what you want to create. Pilot: In most developed countries, job creation is by far the most important thing. I remember when the US president visited India, how he pitched his visit to India was that it will create 50,000 jobs in US.
The debate is more about economic growth, GDP numbers, the sectors of the economy; but job creation is not talked about as much as it should be. Q: Why is employment not part of our political lexicon? Pilot: Just like under nutrition and malnutrition is not. 45 percent of our kids below 5 are undernourished or malnourished. It is a big social problem but I don't think we should debate about why it is not a political issue. It is certainly important for the country, for the growth and what we as government are doing is trying to link the demand and supply. _PAGEBREAK_ Q: In terms of policy prescription you talked about the linkages and the inter-linkages within the ecosystem, but this is what I was talking about initially. For an economy that was growing at 8 percent; the highest growth that our economy registered it was a period virtually of jobless growth. So how do you equate the growth and the job creation equation there? Kochhar: To equate growth and job creation equation, we have to ensure that we diversify our growth. So there is a lot of growth that took place in the Indian economy on account of growth in services sector. And yes that did lead to some amount of increase in employment. However, we have to see how much can we bring back manufacturing sector in the economy? How can manufacturing sector give us the next round of growth in employment? So, it is not really more about policies but also about action and execution and making sure that we harness every possible sector of growth for the economy so that each one of them can contribute to employment creation. Q: The good news is that as far as 2010, 2012 are concerned we have actually seen a turnaround as far as job creation is concerned. People would argue that when you didn’t see growth coming in when India was growing at 8 percent. What changed? How have you been able to actually add jobs in a period which was slow as far as the economy was concerned? Mehrotra: Actually all the way up to 2011, growth was good as well. Let us recall that the average growth rate between 2003-04 and 2010-11. It was at 8.4 percent per annum. In order to understand how the turnaround has come around, we also need to know what happened between 2005 and 2010. Over that five year period, the national sample survey data shows very clearly that manufacturing employment actually fell in absolute terms. And the reason for that is that capital intensity of manufacturing output is increasing. It was increasing because the trade deficit in manufacturing was increasing meaning the manufacturing import intensity was rising consistently. Now that was not good news. It didn’t create jobs because import intensity was rising as a result of which capital intensity was rising. So the number of workers joining the labour force was increasing but the jobs were not coming around and even services jobs were not coming around.