India Uninc Could Provide the Jobs the Nation Needs:
Zero Budget Farmer, K. Narayanan (who is all of 85 years old) holding up his price-list for the paddy he grows and sells directly to consumers. He is one of those "unorganized businesses" that is not just growing the economy but also improving the nation's health and environment. Also seen on the left is "Augustine" SVS Kerala Volunteer and Community Activist.
The Center for Monitoring the Indian Economy announced
in January 2019 that nearly 11 million people lost jobs in 2018 after the
demonetization of high value notes in late 2016 and the chaotic launch of a new
goods and services tax in 2017, which hit millions of small businesses. Understandably
the Finance Ministry is embarrassed about this development and reported to
Parliament in December 2018 that it did not have data on the impact of demonetization
on jobs in small businesses.
In a recent interview, Mr. C Balagopal, formerly of
the IAS and the Founder of Terumo Pempol, one of the world’s leading manufacturers
of Blood Bag Systems, said: “These so-called unorganized businesses are the
segment of our economy that are growing the fastest. They are more than capable
of providing the jobs we desperately need provided economic planners and well-meaning
larger enterprises, give them the support they require.”
Professor R. Vaidyanathan, who teaches Finance at IIM Bangalore, probably
first popularized the phrase “India Uninc” with his book of the same name*1.
Since 2014-2015 (around the time his book was published), more attention has
been drawn to the so-called “Unorganized Sector.” With the nation’s unemployment
figures being at record heights (7.2 percent according to data compiled by the
CMIE).
In fact unemployment data was so damning in December 2018,
that the
figures were not published. Leaked data suggests that the unemployment
rate is now at its highest in 45 years! Hence the need for many more small
business jobs.
The good Professor points out that many of these partnership
and proprietary firms, a good number of whom are in the retail sector) account for vibrant
growth, despite governmental policies that stack the odds against these brave
and growing self-employed individuals. There has also been a resurgence of
agricultural ventures with many urban young people turning to organic farming
and agro-engineering activities.
Says Nagesh Kini in his review of
Vaidyanathan’s book, “Next only to agriculture’s
17.5%, wholesale and retail trade contribute16.6% and manufacturing 14% of GDP. Their growth rates have been 3.6%, 9.2% and 8.4% respectively (when the Gross
National Domestic Product was 8.3%).
Captain Raghu Raman, Group President of Reliance Industries features in a video “India Uninc: Management Lessons from the Streets of India,”* 2
that has gone viral. Captain Raman was
speaking at a meeting of the Nashik Business Association when he announced that 50 percent of India’s GDP
and 90 percent of employment came from the unorganized sector. According to him, the return on
investment per square foot here is exponentially higher.
The Captain also pointed
out that a vital benefit of the unorganized sector is that revenues are shared
more equitably. He says, “the sad truth is that the corporate sector is not
going to be able to fulfill the aspirations of our young people. We need to stop young people with humble backgrounds from being forced into working as daily wagers when they can with a little marketing support become micro entrepreneurs.
Says Aarati Krishnan
writing in the Hindu Group’s Business Line (September 4, 2015) ; “While India’s listed universe boasts of just 6,000
companies, at last count the country was home to 3.6 crore MSMEs (Micro, Small
and Medium Enterprises) which employ 8.05 crore people”.
The All
India Council for Technical Education (AICTE) estimates that of over eight lakh
qualified engineers in India, 60 percent are unemployed. Part of the problem
may be that that only 15 percent of the 3,200 institutions that offer
engineering courses are accredited by the National Board of Education (NBA).
The cost
of human suffering that comes from unemployment has serious consequences for
our nation. We cannot keep living in our gated colonies, or
confine ourselves to building “Smart Cities.” Says Captain Raman in his iconc
YouTube video, “We don’t need cities that are smart, what we need are cities with
heart!”
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