70 years of
Feature – I-Day 2017
Father of the nation Mahatma Gandhi often used to say that India lived
in its six lakh villages spread over length and breadth of the country.
So no government in independent India can ignore this fact and hence job
creation has been central theme of economic policy of all governments.
Right from independence successive governments have rooted their
economic philosophy on Gandhian thoughts that cottage industries is key
to providing jobs particularly in rural India. The fine quality of
Indian handicrafts and handlooms is often described by the famous Dacca
Muslin. Traditional Indian weavers are known for their intricate and
fine work that a six yard Dacca Muslin cloth can be made to pass through
a ring. That used to be the craftsmanship of Indian weavers before
British came and destroyed Indian cottage industries to promote their
machine made cloth from Manchester using Indian raw cotton. This used
to be the exploitative approach of the British to use cheap labour to
produce raw material, which used to be made into finished industrial
products and sold back to vast population in India at a very high profit
to sustain their Industrial revolution. This killed the Indian industry
and craftsmanship pushing the vast majority of Indian people to solely
depend on agriculture in which there was already disguised unemployment
as farming is seasonal in nature.
emphasis in independent India, therefore, has been to lay emphasis on
promoting small scale industries particularly cottage and micro
industries so that there is livelihood for people throughout the year in
rural India. Today, there are over five crore Medium, Small and Micro
industries in the country accounting for nearly 40 per cent of India’s
manufacturing and 45 per cent of merchandise exports.
This did not mean India did not require large and heavy industries. They
are needed for example in the power sector, manufacture of machine
tools, vehicles, steel making, defence manufacturing, automobile. and so
on and so forth. But small industries are needed for job creation as
capital intensive heavy industries using automation and hi-tech cannot
be driver of employment, which can only come in labour-intensive
construction, infra development, like roads and railways, logistics
business, textiles, handlooms, besides small and cottage industries. An
investment of Rs 1-1.5 lakh is needed to create one job in small and
cottage industries whereas an investment of Rs 5-6 lakhs are required to
create one job in capital intensive heavy industries. Also one car
produced, creates three jobs in the services sector like mechanics,
drivers, cleaners, etc. Likewise one truck or one tractor produced
creates 7 jobs. So services sector is the key especially in rural India
where there is dearth of jobs other than agriculture. This will prevent
large scale migration to urban areas as well.
rightly stress on micro and small industries since independence has
created industrial clusters dotting all over the country besides
evolving funding mechanism including micro finance institutions so that
exploitation by money-lenders is minimized. Taking this theme forward
Modi government has taken several initiatives during the last three
years that will give the much needed boost to job creation. The results
might not be evident immediately but it has certainly done the ground
work for it. The more than doubling of highways construction, speeding
up of rural roads development, spending of Rs 8.5 lakh crore on capital
expenditure in railways in the next five years, metro rail projects will
all push employment. Also allowing 100 per cent FDI in food processing
will create more jobs in rural India apart from ensuring that Rs 40,000
crore of fruits and vegetables that rot every year is drastically
reduced. This will also ensure better remuneration to farmers as well
and create alternative occupation to rural population in their own
backyard. The Mudra scheme has ensured that several crores of youth got
jobs through self employment. The youth of rural India not only get jobs
for themselves but also become employers for few others in their
start-ups. Improved connectivity through better infrastructure has
ensured more industrial corridors are came up in the country, which in
turn will create more industrial clusters like Tiruppur in Tamil Nadu,
Moradabad in Uttar Pradesh, Ludhiana in Punjab, Surat in Gujarat,
Murshidabad in West Bengal.
Food Processing parks in areas where farm produce is abundantly
available will ensure rural jobs and better income to farmers.
Work is going on full swing in Mumbai-Delhi, Ludhiana-Kolkata, Vizag-Chennai,
Chennai-Bengaluru and Bengaluru-Mumbai. The Government proposed to take
up a few more industrial corridors in the coming years including
extension of Vizag-Chennai corridor to Kolkata on one side and up to
Tuticorin on the other side. All these will create the ambience for more
small scale industrial clusters.
digitization of the economy, hastened by demonetisation and rollout of
Goods and Services Tax too will result in more jobs. Demonetisation will
result in improving ease of doing business without corruption. The GST
will push up GDP growth by a couple of percentage points.
Modi government’s stress on clean energy, particularly solar power
including roof-top power generation will ensure a lot of jobs for
skilled and semi skilled workers. This is already visible in states like
Tamil Nadu, Rajasthan, Andhra Pradesh, Gujarat, Karnataka where wind and
solar power development have taken a big leap forward.
There might have been some hiccups in the short run in job creation
because of these systemic and structural reforms but they have
kick-started the sagging economy and created necessary base for big jump
in employment generation in the coming years.
*K R Sudhaman, who has over 40 years experience in
Journalism, has been Editor in Press Trust of India and Economics Editor
in TickerNews and Financial Chronicle.
Views Expressed in the article are author’s personal.