We cre­ate jobs for the US

Modi gov­ern­ment still has no clear strat­egy for cre­at­ing em­ploy­ment for the hordes of the job­less young in In­dia

Down to Earth - - LAST WORD - DOWN TO EARTH

Btown hall speech at Siri Fort at the ARACK OBAMA'S tail end of his In­dia visit cap­tured the coun­try’s imag­i­na­tion and, very likely, touched its soul. That’s as it should be. Such a stir­ring “ad­dress to the peo­ple of In­dia” on the sen­si­tive is­sue of re­li­gious tol­er­ance is un­usual from a vis­it­ing head of state.But there was an­other speech by the Amer­i­can pres­i­dent that did not get enough play in the me­dia and that’s his ad­dress to the US-In­dia Busi­ness Coun­cil sum­mit a day ear­lier. It was not the kind to move hearts but it should cer­tainly have wor­ried our pol­icy mak­ers.

Here, Obama made no bones about what the US wanted from its part­ner­ship with In­dia and how this was al­ready pay­ing off for his coun­try. Since he out­lined his vi­sion of the eco­nomic part­ner­ship dur­ing his 2010 visit to In­dia, bi­lat­eral trade has gone up some 60 per cent to nearly $100 bil­lion a year. This was un­de­ni­ably a win for the US and its work­ers be­cause ex­ports to In­dia are up nearly 35 per cent and, as Obama ex­ulted, those ex­ports “sup­port about 170,000 well-pay­ing Amer­i­can jobs”. At the same time, In­dian in­vest­ment in the US had been grow­ing, too. “And those In­dian in­vest­ments are sup­port­ing jobs across Amer­ica. We’ve got high-tech jobs in up­state New York,man­u­fac­tur­ing jobs in North Carolina,en­gi­neer­ing jobs in places like Michi­gan and Ohio.”

Bully for Amer­ica. But what of In­dia which des

per­ately needs to cre­ate 12 mil­lion jobs for its ever in­creas­ing le­gions of young un­em­ployed? As Prime Min­is­ter Modi re­sponded with a plat­i­tudi­nous de­liv­ery at the high-level busi­ness meet­ing it was clear that the gov­ern­ment still has no idea how to cre­ate the much-needed jobs for its huge work­force that swells by 10 mil­lion an­nu­ally.

At the re­cent Aero In­dia 2015 in Ben­galuru, Modi came out with an idea—not a blue­print—that lo­cal de­fence pro­duc­tion would be the heart of his Make in In­dia pro­gramme. His logic was rather sim­ple. Since In­dia was the largest im­porter of de­fence equip­ment, a 20-25 per cent re­duc­tion in im­ports could di­rectly add up to 120,000 highly skilled jobs.But it was more a flight of fancy since he knows as well as any­one else that such skills are thin on the ground in In­dia’s poorly ed­u­cated and largely un­trained work­force. To be­lieve that for­eign com­pa­nies in the high-tech de­fence sec­tor could use In­dia as part of their sup­ply chain and an ex­port hub is merely wish­ful think­ing.

For in­vestors to con­sider In­dia as any kind of man­u­fac­tur­ing base there needs to be a ma­jor over­haul of its in­fra­struc­ture and ways of do­ing busi­ness.The fact is for all his rhetoric about turn­ing In­dia into a man­u­fac­tur­ing pow­er­house, Modi has been un­able to im­part any dy­namism to the econ­omy. The lat­est crit­i­cism came from a doyen of in­dus­try, Deepak Parekh, chair­per­son of hdfc Bank,who bluntly said that af­ter nine months of the Modi gov­ern­ment,very lit­tle had changed on the ground. If any­thing, ease of do­ing busi­ness had be­come a lit­tle more tough since it took more time for his bank to get ap­proval to raise cap­i­tal than in ear­lier years.

The big­ger is­sue re­mains jobs. Modi must be well aware em­ploy­ment in the for­mal, or­gan­ised sec­tor is stag­nat­ing ow­ing to higher au­to­ma­tion. Ac­cord­ing to of­fi­cial data,400,000 peo­ple lost their fac­tory jobs in In­dia dur­ing 2012-13—at a time when Obama was set­ting a record by hav­ing cre­ated 4.5 mil­lion jobs, a fig­ure that seems a pie in the sky for us.Modi needs more than catchy slo­gans to give the young the jobs they des­per­ately need.

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