By Dipanjan Roy Chaudhury, ET Bureau | Jan 19, 2021
Japan is an ageing country while India is relatively a younger country with a large pool of talent. New agreement “Specified skilled Workers” offers a great opportunity for Indian skilled workers allowing them to come to Japan and work with various other provisions like visa, stay and more, the Ambassador informed.
NEW DELHI: Co creation, Co- production and co-innovation is the way and the future for the emerging Indo-Japan digital partnership.
This was the suggestion put forward at a meet organised by India’s leading public policy body Ananta Aspen Centre. The meet held on Monday was titled ‘India Japan Digital Partnership- Opportunity for Co-Creating and Co-Innovating’
Addressing the meet Indian Ambassador to Japan Sanjay Kumar Verma noted, “India Japan relationship focuses on special ..
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Indian industry must drive our economic recovery through innovation and exports
Business Standard | December 31, 2020
The Chinese sage Confucius said, “May you live in interesting times.” Confucius meant this as a curse, and we can see why. We live in very interesting times. The global Covid health crisis has prompted unprecedented lockdowns, with devastating economic consequences. Global economic growth in 2020 is forecast to be minus 5 per cent, and in India minus 7.5 per cent. Our goal in 2021 must be to recover, and to put in place processes to grow rapidly for decades. Per capita gross domestic product (GDP) growth is nothing other than productivity growth, a result of capital investment, labour supply and technical change. ..... click here to read more
Written by Dr. Naushad Forbes
December 31, 2020 | The Indian Express
We must use our economic crisis to set some bigger things right. 2021 will be a year to welcome if it returns us to the growth trajectory we deserve.
It is nine months since India declared the world’s most stringent lockdown, with four hours’ notice, causing massive economic disruption. Meanwhile, we have passed 10 million COVID infections in India, the second-highest in the world. And the UK has reported a new strain of COVID that is even more infectious. This has been an altogether strange year. Will 2021 be better? What can we look forward to? What should we worry about?
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26 DECEMBER 2020 | ENGLISH | GENERAL AUDIENCE
On Converse India today, Rahul Shivshankar discusses the farmers’ protest, which is showing no signs of ending even after a month. While both sides, the Centre and farmers, are claiming that they are ready for negotiation, there is no resolution in the stalemate in sight. The farmers are apparently worrying about the corporatisation of agriculture and as they worry, the debate over the new farm bill is raging. Prime Minister Narendra Modi even conducted a mega outreach to the Kisans and assured that the new bills will only benefit them. Watch as an expert panel, which includes Economist Gurcharan Das, R Jagannathan, Dr Naushad Forbes, and Sardar VM Singh, share their views on the new farm bill row.
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Business Standard | 28th August 2020
The last four decades have seen rapid growth in our higher education system, raising the proportion of the relevant age group in higher education from 6 per cent to 26 per cent. In the mid 2000s, when growth peaked, India opened one engineering and management college each day. This growth has been highly skewed: In professional in undergraduate education, and in the private sector. The net effect of this skew is a massive quality
problem. Consider enrolment in undergraduate engineering programmes, which have grown over 40 times in 40 years.
In earlier articles “It’s about jobs” (Business Standard, 1st April and 29th April), I argued that India’s essential need is to create millions of high-quality jobs. That requires us to get the supply of quality talent right — improving our skilling programme, school quality, and female participation in the workforce. In the second article, I argued that millions of good jobs in manufacturing companies could absorb the supply of well-educated and trained women and men - but this required labour reform. This concluding article is about why high-quality jobs are so important, and how tourism is the essential service sector that can add to a jobs boom in manufacturing.
The great Stanford sociologist Alex Inkeles was a seminal contributor to modernization theory. Modernization theory argues that the development of a country is built on the development of its people. In particular, as a society modernizes, people adopt a set of more modern attitudes. These include "a sense of personal efficacy; openness to new experience; respect for science and technology; acceptance of the need for strict scheduling of time; and a positive orientation toward planning ahead". These modern attitudes are the essential building blocks of an advanced society - and indeed an advanced economy. Not only do they make the individual modern, but they also make for participant citizens - with interest in the news and a sense of national identity that rises above religious and local ties. So how does an individual become modern?
Alex Inkeles’ classic book “Becoming Modern”, reported the results of a major multi-year six country (that included India) research project. The key contribution was to provide an empirical scale of modernity that applied universally, and to establish its source. The two key sources of modernity were the school and the factory, with one year in school worth roughly two in a factory. Nothing else came close - not family background, or the friends one has, or what one reads, or mass media, or the speeches of political or religious leaders. The school one can understand - developing the individual is what it is there for. But a factory employs people not to develop them, but to produce things. Why was it such a powerful moderniser, in Inkeles’ words, “a school for modernity”?
A factory is about production. But the way a factory is organised inherently develops the individual. People work to a manufacturing schedule; this teaches planning. One sees a direct connection between work and output - so it isn’t luck that delivers results but learning and using skills. That fosters efficacy. Any decent factory has a focus on efficiency - that directly connects using time productively to output. Change is the norm in factories, so new experience is valued. Technology is all around one, making the individual more productive. And decision-making requires data, valuing a scientific temper over superstition.
It is for these reasons that manufacturing jobs matter. But why not service jobs? Formal service jobs can be powerful modernisers - our challenge is that most formal service occupations require high levels of education, and there aren’t that many of them. Take our most successful industry - the IT sector. An industry that has boomed for over thirty years today employs 4 million people directly. And some of those directly employed, and most of those indirectly employed, are informal occupations - drivers, and security services, and domestic staff - that are not “schools for modernity”. A country of 1.3 billion, with a work-force of 500 million growing at 20 million a year, needs a lot more.
There is a big exception: tourism. Tourism can be as effective a school for modernity as the factory - indeed, done right it can be even better. One of my favourite resorts anywhere in the world is the Shillim resort. Shillim is in the middle of a thoroughly rural area, 30 km from the nearest town, Lonavla, which is itself no metropolis. Shillim today directly employs around 450 people. A policy of recruiting locally has created two hundred jobs for young men and women from the nearby villages that have a population of around 1000. These young people are taught all those things that make people modern. An intensive training programme teaches everything from hospitality domain skills to the soft skills essential to success in a luxury resort. In the eight years since Shillim opened, hundreds of lives have been transformed, and with it the fortunes of their families in the next generation.
Shillim needs to become India writ large. Tourism is our greatest untapped opportunity. No country can match us in the combination of architectural diversity (with everything from Mughal forts and tombs to Hindu temples and the colonial grandeur of New Delhi), unmatched natural beauty (from the back-waters of Kerala to the beauty of the Kashmir Valley), and a richer diversity of culture than in any other country (there is no such thing as Indian dress or Indian food - we have dozens of distinct dress styles and even more cuisines). With all this to offer, why are we country # 25 in the world tourism rankings? Why can’t we match country # 1, France, with 83 million annual tourist arrivals instead of our current 15 million (half of whom are NRIs)? A first step would be to match Thailand’s 33 million.
The alternative to hundreds of millions of formal high-quality jobs - in manufacturing or tourism - is one of millions of informal marginally employed drivers and cleaners and delivery boys. T N Ninan’s insightful and thought-provoking edit in Business Standard many years ago on the horrendous Nirbhaya rape has always haunted me. He pointed out how different the victim and rapists were in their paths of modernity. The victim and her friend were educated, and with good job prospects in formal occupations. The rapists were all in informal, unstable occupations - with nothing that either taught them modern attitudes nor gave them a stake in the existing system. The difference was not where the victims and rapists had come from, but the education, exposure and employment of their families. A modern future for India requires that we do all that is necessary - labour reform to unleash labour-intensive manufacturing, policies to promote garments and footwear and food-processing, and a tourism Czar with the power to work across ministries and state governments to attract 80 million annual tourists to India in the term of this government. The alternative could condemn us, in Trotsky's words, to the ash heap of history.
Dr Naushad Forbes
(Article of Dr Naushad Forbes, Trustee, Ananta Aspen Centre published on Business Standard on 30 May 2019)
On April 1, 2019, in the article “It’s about jobs” (Business Standard), I argued that India’s essential need is to create millions of high-quality jobs, those with the potential for consistent productivity growth. That requires us to get the supply of quality talent right — improving our skilling programme, school quality, and female participation in the workforce. This second article in the series is about demand in industry: We need millions of good jobs in manufacturing companies to absorb the supply of millions of well-educated and trained women and men.
Most emerging markets have put millions of people in work in low-skilled labour-intensive manufacturing. China, for example, employs over 100 million people in export-oriented labour-intensive manufacturing. As a middle-income country (with a per capita GDP of $10,000), low-wage jobs have been moving out of China, encouraged by uncertainty over trade policy. Vietnam and Bangladesh are picking up millions of such jobs in the thriving garment, footwear and assembly industries. Why aren’t they coming to India?
We occasionally make the argument that while large Indian manufacturing firms have not created millions of jobs, our small firms have. A recent CII (Confederation of Indian Industry) MSME (micro, small and medium enterprises) survey, the largest ever undertaken, surveyed more than 100,000 small firms on job creation between 2014 and 2018. The great bulk of firms were micro-firms — employing on average three people. The 105,000 firms, among them, added 330,000 jobs in the four years, about 3 per cent annually, with most of the jobs added by micro enterprises. From this we must subtract the average mortality of firms. Small enterprises live a tenuous existence. In the most vibrant entrepreneurial environments — the US, Taiwan and Israel — firms enter and exit constantly, and the government data on employment is consistently adjusted for the entry and exit of enterprises. While large Indian firms have long, lingering deaths (only in India do firms fall “sick” — everywhere else in the world they either exist or don’t), small enterprises in India are constantly starting up and vanishing. Think of the churn in your neighbourhood — street vendors, barbers, restaurants and shops. But here, too, there is no good Indian data. The best we can do is to look at typical mortality rates for enterprises in other countries. The Organisation for Economic Cooperation and Development (OECD) reports firm mortality across 23 of its 34 member economies: Firm mortality in 2015, the most recent year available, ranges between 2 per cent and 15 per cent annually, with a median of 7.7 per cent. So while we cannot arrive at an accurate net employment number, it would seem that we need a rate of job creation well above 3.3 per cent in small firms to make up for the enterprises that die each year.
What is true of small industry is even more true of large industry: Between 1991 and 2017, according to the Annual Survey of Industry (ASI) data, industrial output increased five times in real terms. Labour employed in ASI firms increased 1.8 times, by an average of a little over a quarter million people a year. This made firms roughly three times more productive — decent progress for industry, but not for industrial employment. With 15 million people employed in the firms the ASI surveys (those employing over 10 people), India is missing mass-scale industrial employment. In particular, we are missing the huge firms in export-oriented labour-intensive sectors that employ millions in China, Vietnam and Bangladesh. This matches anecdotal observation too. Foxconn's largest factory in China, making i-phones, among other products, reportedly employs 400,000 people — in a single factory — of the 1+ million it employs in the country overall. Samsung employs 100,000 people in its largest phone assembly plant in Vietnam. These giant factories are simply missing in India.
Consider the most labour-intensive sectors. A large garment factory in India employs 3,000-5,000 people whereas a large garment factory in Bangladesh employs 30,000-50,000 people. A company we met in Vietnam on a recent CII visit manufactures Agarbattis. They learnt how to make Agarbattis by sending 10 workers to a factory near Chennai for training. They today employ 10,000 people making Agarbattis, which they mainly export from Vietnam to India. What does it say when the technology is Indian and the market is India — but the economics says mass manufacture is more efficient 4,000 km away from India?
The mention of labour reform prompts the reaction that this is in the interests of industry and capitalists. This is wrong. Labour reform is in the interests of labour. Labour regulations protect incumbents — those already in permanent jobs in large factories. Making it easier to hire people is the other side of the same coin of making it easier to fire people. We must ensure adequate social safety nets so that those displaced are protected, but providing a flexible labour market could transform our market for jobs. We otherwise prompt behaviour contrary to the national interest — with firms first avoiding labour-intensive manufacturing, and then relying on contract labour where possible instead of direct employment. The result is that our fastest-growing large private-sector employer in the country is Teamlease, a provider of temporary and contract manpower, which currently employs over 100,000 people. In recent years, we reportedly added 7 million jobs in security services and 1 million jobs as private drivers in the National Capital Region alone. These contractual jobs are welcome to those who get them in the absence of alternatives, but they are not the high-quality jobs we need.
This government came to power promising to reform our outdated labour policies. It is unfortunate that this key area has since vanished from the agenda — and is not spoken about at all in this election. If we wish to attract the millions of jobs in garments and footwear and assembly moving out of China, an environment where one can cheaply increase and reduce hiring as needed is essential. We may rightly express concern about the “sweat-shops” making garments in Bangladesh, but given the choice workers have chosen by the million to move off the rice field and into the sweat-shop. Indian workers should have the same choice.
(Published in Business Standard on 29 April 2019)
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