Who was it who said that for everything you say about India, the opposite is also true? The Organisation for Economic Cooperation and Development (OECD), the elite club of developed countries, has observed in a report that India created more jobs than China, Brazil and Russia between 2000 and 2005. With 11.3 million net new jobs every year in India against 7 million in China, 2.7 million in Brazil and 700,000 in Russia, we do have some reason for cheer. But then, if economics was only about absolute numbers, the world would be a lot easier place to live in. There is little doubt that in the time window highlighted, India has emerged as a key driver in a worldview involving the four developing BRIC nations that offer both competitors and customers to rich nations.
However, China had begun generating high growth and matching jobs long before India, which struggled for about a decade since economic reforms began in 1991 before it showed signs of sustainable growth, over which some question marks still hang. The number of new jobs created by India in the first half of this decade is creditable, but pales in front of the needs of a country that has one billion-plus people. Also, there is a peculiar skew in the nature of jobs created. Information technology, business process outsourcing, pharmaceuticals, real estate and media have been among big job spinners in India. But much of that boom is centred around the knowledge economy that is not inclusive enough to reach out to the less literate and less fortunate sections of society. Call centres give rise to jobs for caterers and taxi-drivers who transport workers, but the spin-offs of the knowledge economy cannot be stretched so easily.
The services’ opportunity provided by globalisation has worked wonders for India, but it is clear that its benefits have not reached vast sections that include manufacturing industries and agriculture, certainly not to a significant degree. Policies to create special economic zones for manufacturing industries have been controversial. Rural areas need vast investments in infrastructure, education and healthcare, both to help generate rural jobs and build skills that would make under-served citizens competitive in a global marketplace. Until the job boom reaches politically significant masses, we will have to accept the reality that our growth story is good, but not yet great.