Opinion

It boils down to creating jobs

SIDHARTH BIRLA | Updated on March 09, 2018 Published on March 26, 2017

That’s the way Agri-processing needs a leg up M KARUNAKARAN   -  M Karunakaran

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Development is finally about enabling sustainable livelihoods. Rather than manufacturing or services, agriculture holds the key

As I write, I am reminded of the Bombay Plan scripted 70 years ago by our forefathers as a vision for India’s economic development. I paraphrase extracts from it, as a reminder that this initiative has been with us since long.

“The plan aims for a standard of living, reasonably over minimum requirements of human life.”

“.. a principal objective is to double per capita income over 15 years, which necessitates trebling of aggregate national income .. supported by raising agricultural output by twice and that of industry, including large and small, by 5 times. The economy would remain mainly agricultural due to greater population in agriculture-led occupations but its dominance can reduce considerably. Supported by higher production and standards of living, large numbers will engage in trade and services. Yet this barely touches the problem of disguised unemployment in agriculture.”

Core goals

Doesn’t this aspiration sound 2017-ish? Regardless of so many formal and informal livelihoods created since Independence and large numbers brought out of poverty, our real status is still out of sync with the scale of our demographics. The objective is not to criticise, bemoan or ascribe failure. But the subject of livelihoods needs to be back centre-stage.

Now matter how it’s described, sustainable livelihoods or rojgaar (and the quest for a healthy social balance) has to be the core development agenda. Macro initiatives and policies, and the faith of the masses, amount to nothing if it means a deserving soul cannot obtain a meaningful livelihood. It should terrify us that the organised sector today offers scarcer employment opportunities; and many organisations are downsizing. Informal sector data is unreliable, yet anecdotal evidence lends cold comfort.

Towards sustainable livelihoods

The reality is that people are loath to either consume more or employ more (inhibiting consumption-led growth); enterprises are loath to both borrow, and undertake new risks (killing investment-led growth).

The volatile global economy also affects jobs here. In truth, government spending can do only so much. Entrepreneurial actions — whether they foster farming, farm jobs or mom-and-pop undertakings, or create MSMEs or large enterprises — are the only way to generate sustainable livelihoods.

Business and market attractiveness are necessary, but not sufficient conditions for commitment. Entrenched systemic trust is critical for undertaking risk. No business can undertake risks of wide-ranging or intrusive regulations and interventions, revenue aggression, or slow administrative disposal. The greatest risk for any enterprise must be business risk.

But the spheres of influence that can interfere or disrupt are expanding. The three-way bridge of trust between government, business and society is increasingly turning fragile. Contemporary discourses make it difficult to decipher if someone at a material economic or decision-making level has adverse financial or ethical hygiene; or if someone at a lower level pursues benefaction. Broad brush-stroke attitudes can begin to rule.

Such distortions affect a delicate equilibrium. The perception of reality is more compelling than reality itself; this premise can create unforeseen divides between noble intent and results. For example, if consumers and businesses perceive the atmosphere to be negative even in the face of positive evidence, the consequences can be unkind.

There is a significant difference between expressing confidence and building confidence. I have maintained that desi or home-grown commitment in expanding investment and jobs is the surest vote of confidence. Signalling interest yet not investing is not of value. Without the commitment of (and place of pride to) domestic participants, foreign interest may also become short-lived.

Manufacturing is no longer the answer for large-scale employment and holds downward risks due to automation. The same threats apply to the service sector. Specialised skills for select process areas are now a hard fact.

Focus areas

Reportedly, 60 per cent — if not more — of youngsters completing engineering or management studies are in reality unemployable due to the lack of a comprehensive and practical education (and sometimes work ethic) leading to a gap vis-à-vis the true needs of the economy.

Efforts are being made to narrow the gaps (raising technical education standards to improve employability from the current 40 per cent, more vocational training). But these cannot be overnight solutions, and provide poor comfort to those who have already obtained some qualification but remain jobless.

To my mind, improved performance in agriculture and allied sectors may hold the highest short-to-medium term success for job creation. The notion of higher farm incomes can spark debate on whether this applies to real or notional incomes. But any material improvement makes the nation more productive and self-sufficient and helps address underemployment.

The key is to increase farm incomes based on greater output, intellect and value-added products (pulses, fruits and vegetables), not through direct or indirect subsidies. An agri-output boost is possible through aggregation of land parcels and via aggressive development of food processing and/or food retail.

The Government may also like to create agri-related infrastructure, perhaps distribution and logistics chains; these require to be supported. Whether livelihood creation is as yet central to our development agenda, is a moot question.

Without single-minded focus, despite generating positive aspirations, the youth may begin to question his mandate. Failure will prod us towards painful patch-job solutions such as government jobs, populist schemes or simply reallocation (for example, reservations).

There seem to be no quick answers to this worrying situation, and the passage of a few years of net jobless growth in the formal sector makes the task even more difficult. I continue hoping that Indians will show significantly more patience with the livelihood creation agenda than they do with, say, driving on roads, standing in queues, or in their jugaad approach. If not, the results will be less palatable than the unhealthy consequences of impatience.

This column explores ideas and opinions on Indian enterprise and economy. The writer is an entrepreneur and former president of Ficci. The views are personal

Published on March 26, 2017
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