I memorised Pandit Nehru’s mesmerising ‘Tryst with Destiny’ speech as a child. But I am sure even he would agree that India missed her tryst with destiny. Of the three pledges in 1947—nation building, social justice and poverty reduction—the first we have redeemed in full, the second is work in progress, while the third has been painful.
Our failure to reduce poverty highlights the difference between independence and freedom; freedom is the ability to make personal choices, and India has 300 million people who will never read the newspaper they deliver, sit in the car they clean, drive the tractor they unload, or send their kids to the school they helped build. After spending decades in delusion believing that individuals will be empowered by the state, this government’s historical electoral mandate is pregnant with the possibility of a new appointment with India’s destiny.
I’d like to make the case that keeping this new appointment is about creating non-farm, formal, private sectors jobs because jobs help our citizens in a way that no subsidy ever can. This job renaissance is not only about opportunities for the young—the 10 lakh new entrants to the labour force every month for the next 20 years—but also involves relocating 300 million-plus adult workers to higher productivity. This renaissance depends on merciless execution in fixing our five geographies of work: Enterprise, physical, sectoral, education and legislative.
Enterprise Geography of Work
The key challenges here are the related birth defects of too few formal enterprises and too many sub-scale enterprises. India’s 6.3 crore enterprises only translate to 9 lakh companies. Of these, only 40,000 post at least a single job on a job portal on any day; only 7,500 have a paid up capital of more than Rs 10 crore; only 6,000 have a credit rating. This massive informality also leads to sub-scale enterprises: 84 percent of our manufacturing is done by companies with less than 50 employees.
There is nothing wrong with being small but enterprises can be a dwarf (something small that will stay small) or a baby (something small that will grow). Unfortunately, India has become a nation of corporate dwarfs because of regulatory cholesterol-created hostility to entrepreneurship. Improving the ease of doing business could create a Cambrian explosion of new venture creation and massively increase productivity and scale among existing enterprises. This requires rebooting the thought world of the MSME ministry, improving access for non-collateral credit, getting rid of the labour and tax inspector raj, implementing the Goods and Services Tax, growing the venture capital industry, digitising government interfaces, freeing foreign investment, and getting rid of outdated laws.
Physical Geography of Work
Education Geography of Work
(This story appears in the 22 August, 2014 issue of Forbes India. To visit our Archives, click here.)
The govt can\'t do all these things. The people of India have done it before and can do it again. The govt has to just get out of the way.
on Sep 15, 2014