Budget Bullseye: Jobs, Odd-Jobs & No-Jobs

Budget Bullseye : Jobs, Odd-Jobs & No Jobs

Sabka Saath, Sabka Vikas, the master slogan of the Modi surge to power, apart from being inclusive, implied progress and prosperity for all.

Amongst all the cacophony on the edge of budget day, we must place the demand for jobs- a-plenty centre-stage. But, 21 months in, India’s ‘demographic dividend’, 65% in age-band 15 to 35, is still a ticking time-bomb.

The coming budget is sure to allocate substantial resources to rural areas, hit by consecutive droughts and floods. But, will the money be targeted for job creation?

Also, the urban new manufacturing, even if it increases its share of GDP in value terms, from the current 17.8% to 25%, cannot deliver very many jobs. Not in the context of the coming decade wanting over a 100 million new ones!

So far, the government has only managed, per its Labour Bureau statistics, to generate 524,000 jobs till March 2015.

To get anywhere near the numbers needed, India will have to unleash massive infrastructure development, and the complete modernisation/urbanisation, of the rural areas.

Definitions of rural employment have to change. With constant land sub-division and farming producing just 17% of GDP, it cannot support 50% of the population.

To get ahead, rural India needs to mix it up with those activities it can find accessible. It is interesting to note that a grouping like ‘trade, repair, hotels and restaurants’ from the ‘services’ listing , contributes 12.40% to GDP today (Planning Commission- July 2015).

Another sub-head here, ‘financial, real estate and professional services’, notches up 20.54% . With over 300 cities and towns in the A, B, C, and lesser categories, there is scope here.

The services sector, that will embrace all the new age digital, e-commerce business emerging, is today at 52.97% of GDP.  ‘Construction’ accounts for 8.04% under the ‘industry’ grouping. There is no reason for all this to be exclusively urban.

The money also lies in food-processing, innovation, value addition of farm produce, that will also curb food wastage.  India is, after all, the 2^nd largest  agricultural producer in the world.

Then there is Packaging, rural automation, materials handling, grain storage facilities, farm machinery, seeds, yield betterment technologies, automation, servicing workshops, vocational skilling institutes, digital connectivity, localised urbanisation via the smart cities programmes, development of tourist attractions/infrastructure around heritage treasures, large educational campuses, entertainment complexes.

Building rural physical infrastructure contributes to upliftment alright, but an unimaginative throwing of government money at one or the other of the labour-intensive welfare programmes is shabby.  As a dole, it is a political hot potato and will no doubt continue.  But rural infrastructure can be built much faster and better using modern methods.

Similarly, in urban India, that contains the other half of our population, there needs to be a great push towards fostering entrepreneurship, start-ups, e-commerce, services, digital initiatives, construction, the arts, cinema; all things that are in addition to mostly automated manufacturing.

Besides, the trends cannot be bucked. A recent White House Council of Economic Advisers (CEA) report states that there is an 83% chance that jobs in the US that pay below $20 an hour, will likely go to machines. And another 31% chance that jobs paying between $ 20-$40 an hour, will also follow suit. 

Once assembly-line jobs were plentiful, but they have declined 37% since 1979. In 1965, manufacturing accounted for 53% of all US jobs, but it’s down to just 9% now.

Oxford University researchers Carl Benedict Frey and Michael Osborne estimate that 47% of all US jobs, including those creative, discretionary, apparently robot-proof ones, could end up automated by 2033.

So welcome to the world of thinking robots, intuitive computers that can do lateral-think too. Such abilities are being embedded in all sorts of devices, from smartphones and manufacturing robots, to sex dolls.

This is all good for GDP growth and productivity, even as we are already in the age of air drones that can do surveillance, delivery work or kill on demand. Similarly there are undersea-bots, driverless trains, and cars.

Let us understand that the most desired defence production and Make in India programmes will certainly bring a portion of the foreign procurement home, and sophisticate the skilling programme. They may even yield high value exports, and up our global trade percentages, and yes, add a few million better-paid jobs.

But right now, 90% of Indian jobs are in the ‘unorganised sector’. The government should take a cue from this enterprise, facilitate its growth, hook it up to a supportive grid, and then get out of the way.

(751 words)

February 26^th, 2016

Gautam Mukherjee