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India needs more big firms for jobs: IMF executive director KV Subramanian
IMF executive director Subramanian emphasizes India needs innovative entrepreneurs addressing local issues over copying the West
New Delhi: India needs entrepreneurs who can “tap into innovation” geared towards addressing the country’s problems rather than “merely copy-pasting” from the West, IMF executive director KV Subramanian said on Wednesday, launching a report on social protection for workers in the so-called gig and platform economy.
India’s platform economy, which refers to digital technology-driven app-based services, such as food delivery, has “increased nearly five times in a one-decade period”, serving consumer needs well, the former chief economic adviser (CEA) to the Modi government said, releasing the report “Social Protection in India’s Platform Economy: Unpacking Supply Dynamics” by the Ola Mobility Institute Foundation.
“No country is even closer in terms of the digital infrastructure India has created. And this has truly been a public good provided by the sovereign. By making it a public good, India has ensured everybody can access it,” Subramanian said.
The report, which studied at least 10 digital-services firms with total revenue exceeding Rs.56,000 crore, said platforms in India did offer a mix of social benefits to workers, such as accident cover and term-based insurance cover.
Maternity cover and paid menstrual leave by some firms are standout benefits, the study said. “Yet, non-contributory health insurance and pensions remain challenging due to the high cost and transient nature of platform work,” the report said.
According to the state-run think tank Niti Aayog’s study, the share of gig and platform workers in the country’s total workforce has increased from 0.54% in 2011-12 to 1.33% in 2019-20.
Social-security benefits evolved around formal wage-based employment and there is a need to expand them to non-standard jobs while ensuring they are sustainable, said SK Sasikumar, a former faculty at the VV Giri National Labour Institute, participating in a discussion. “The administrative cost of running a welfare fund cannot be 70%,” Sasikumar said.
The former CEA said entrepreneurs needed to invest in innovation to achieve scale. “It is incredibly important that entrepreneurs grow their companies into giants to be able to create jobs. Small is beautiful, but small shouldn’t end up as dwarf,” the IMF official said.
Speaking on the report, Aishwarya Raman, the executive director of OMI Foundation, said new-age collaborative strategies were needed to give comprehensive social security to platform workers.
Subramanian said there was enormous potential for India’s platform economy because the country has public digital infrastructure in place. To be sure, India still needs to create a lot of infrastructure, he said.
