The most important part of our working lives is probably centred around the quality of jobs we seek, the investment we make in training ourselves and the continual search for opportunities to excel. Till very recently, we used to apply for jobs. Over the past few years, bright people have also started creating them. Growth is good, but in the age of automation and Artificial Intelligence, the ability and aspiration to create meaningful jobs is turning out to be an increasingly difficult exercise.
The government’s reform agenda, including liberalising FDI and launching the Making in India, Skilling India and Starting Up India and entrepreneurship initiatives are noteworthy for creating conditions for creating jobs. While the Budget has spelt out nine major themes on which it seeks to transform India, several aspects are intended to encourage job creation.
First, as it rightly should, the Budget seeks to alleviate agrarian distress, with measures to improve irrigation and water management, expand the scope of (the already introduced) crop insurance, a unified online marketplace for farmers to sell their produce, better roads to move produce, an expanded MNREGA rural jobs programme and other measures. Not only do these steps reduce the risk of farming, but they improve overall farm productivity and consequently more jobs in the broader rural farm economy.
Second is the emphasis on Small and Medium Enterprises. The MUDRA-SIDBI Bank to “fund the unfunded” has already been operationalized. As India strives to make more sophisticated products, and to move into businesses which are being vacated by China, a critical need is to develop technical skills which can translate into high paying factory jobs. The National Career Service, which is already operational, provides an online platform which is proposed to be inter-linked with state employment exchanges to provide all–India job search capabilities.
The third is the incentives given to promote a culture of entrepreneurship and innovation. Other than the digital services and e-commerce platforms, a very major achievement is the creation of a risk-taking, forward-looking venture capital culture, which has taken deep roots in India. Even before the Budget, the Government had announced many tax incentives and operational freedoms for start-ups.
It is not only direct measures to promote small businesses which are critical. Nascent businesses are too fragile to sustainably survive - and then scale up - in the absence of a robust operating environment. For instance, a robust logistics and warehousing network is critical for building up a deep and wide E-commerce ecosystem. The Budget proposes massive investments in roads, railways, ports, civil aviation and electricity, with a total capital outlay of Rs 2,18,000 crore on roads and railways.
Government initiatives on improving “Ease of Doing Business” over the past couple of years have resulted in progress on many fronts. Foreign Direct Investment (FDI) flows in April – December FY16 was over $ 40 billion, compared to $32 billion same period year before; some $72 billion has come in post the first Budget in July 2014. States are competing with each other to provide conducive business climates, in an attempt to attract investment.
The world around India has become very uncertain and global growth and trade has slowed sharply. This has resulted in a very volatile operating environment for India, particularly with FII capital outflows. The Government, both in the Budget and its wider reform programme, has sought to transform the multiple challenges into opportunities, to benefit farmers, the poor and the vulnerable.
(The author is the chief economist of Axis Bank. The views expressed are personal)