5 Policy Suggestions For The Modi Sarkar To Address India’s Jobs Crisis As It Overtakes China As The Most Populous Nation


Modi Sarkar
Modi Sarkar

India is poised to overtake China to become the most populous nation in the world. This means more youth need education, jobs, and livelihoods supported by world-class infrastructures such as schools, colleges, universities, and physical infrastructures such as civic amenities and healthcare services. While most of these facilities take time to build and maintain, the immediate priority should be absorbing the humungous numbers of India’s youth in jobs and other meaningful occupations. Indeed, with more than 50% of the total population under the age of 30, India’s so-called Demographic Dividend can become a “nightmare” unless urgent steps are taken to address the shortfall of jobs which bedevils the Indian Economy at the moment, creating India’s jobs crisis. Here are 5 Policy suggestions that Modi Sarkar can implement to ensure that India’s youth are gainfully employed in jobs, as the current labour participation rate is at its lowest ever, around 40%, what with Crores of Indians of working age have stopped even looking for jobs.

  1. Fix the Informal Economy, as that is where the jobs are

Historically and structurally, India’s vast informal economy has been its main job creator alongside Agriculture, so Modi must focus on incentivizing this Indian economy segment. Much like the PLI (Production Linked Incentive) scheme that aims to “push” the manufacturing sector into raising output and creating more jobs, Modi must also focus on the Informal Economy, much of which lies outside of the ambit of formal credit and structured operating norms. In my interactions with the many “service providers” such as plumbers, electricians, and sundry Informal Economy contributors, I have realized that simple things like making it easier for them to obtain loans and get registered with official and governmental agencies for streamlined access to governmental schemes for small Entrepreneurs would go a long way in making them more productive and in turn, create more jobs for both skilled and semi-skilled Indian Youth. The latter, at present, is “locked out” of the formal economy due to a lack of skills and unable to capitalize on themselves.

  1. Focus on MSMEs as this is where the potential for job creation lies

Much has been written and said about Modi’s Make In India initiative. More has also been saying about how this policy would help India attain the job creation numbers or the growth rates of China. However, after more than five years, Make In India has become Takeover In India, as foreign firms are engaged in Mergers and Acquisitions of Indian enterprises and companies in the manufacturing sector without creating jobs. So, it is time to shift the focus from the Macro to the Micro by “empowering” the MSMEs or the Micro, Small, and Medium Enterprises. These units typically employ less than 100 workers, and by spreading the net wide to incubate as many MSMEs as possible, Modi can catalyze a “small scale” or a “cottage” revolution. More so, when such MSMEs in the Semi-Urban and Rural areas would reverse migration to cities and develop Tier 2 and Tier 3 centres.

  1. Address Unemployability of Indians by focusing on Vocational and Skills Education

While India boasts of the world’s largest labour pool of graduates and high school-educated youth, most of them are unemployable, meaning that whatever they have learnt in school or college, along with whatever skills they acquired, are of no use to Industry. In other words, these youth simply lack the wherewithal to be employed, so unemployment persists despite creating any number of jobs. This is where the Modi Sarkar can bridge the gap between scholastic and pedagogic education and training and the real-world skills needed for employment. Indeed, the unemployability of India’s youth is something that almost all Industry leaders from NRN and Ratan Tata have lamented from time to time. Opening more ITIs (Industrial Training Institutes) and Polytechnics would be better than permitting record numbers of Engineering colleges, where even after four years, the graduates are as worse off as they were before.

  1. India badly needs a Manufacturing Rennaisance.

Tomes and tomes of commentary on why India needs a more labour-intensive manufacturing sector are in the public domain. Yet, little changes on the ground as India’s Manufacturing sector continues not to be a job creator. While the reasons are many, the bottom line (literally as well as figuratively) is that most firms focus more on capital-intensive activities rather than creating jobs. While we do not expect India Inc. to be the torchbearers of a job creation revolution, there is some social responsibility they have. Of course, this is where Compassionate Capitalism can play a significant role, as well as government incentives to Indian manufacturers to help bridge the gap between demand and supply of jobs. Moreover, manufacturing is the only way to match China’s growth rate. The services sector alone cannot shoulder the Indian Rennaisance without the former rising to the occasion.

  1. Reverse the Brain Drain, Welcome the Diaspora to Invest More, Tap the Pravasi Desi

Back in the 1990s, it was fashionable to lament the “brain drain” of the “best and brightest” of India’s elite management and engineering institutes to the West. Over time, we embraced brain drain as something to be proud of, as can be seen from the hype over Indians doing well abroad (the latest being the British PM hopeful, Rishi Sunak). Moreover, it is not like the Indian Diaspora has not “given back”, as can be seen from the record remittances that keep our Forex reserves healthy, even during crises. So, I suggest we can limit the brain drain by creating an ecosystem of excellence, like what India’s Unicorns have done and what the IT (Information Technology) sector has done. In addition, the Chinese Miracle was also due to its humungous diaspora being cultural and economic ambassadors. While the Modi Sarkar has done much to encourage the Pravasis, there can be more outreach to the NRIs (Non-Resident Indians) to invest more and do more to create jobs. Dual Citizenship can go a long way here, as are removing restrictions on foreign stakes in Indian firms.


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