Now, Indian corporates look to Narendra Modi to defuse jobs time bomb

May 05 2014, 13:00 IST
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According to a Goldman Sachs report if other states boosted manufacturing employment to levels achieved in Gujarat, India could create 40 mn industrial jobs in next decade. According to a Goldman Sachs report if other states boosted manufacturing employment to levels achieved in Gujarat, India could create 40 mn industrial jobs in next decade.
SummaryIn Narendra Modi, businessmen at last see a leader who offers a better recipe.

When Narendra Modi talks about creating jobs in labour-intensive manufacturing, textile entrepreneur Sudhir Dhingra hopes the Indian opposition leader means business.

Dhingra, who employs 30,000 workers in more than 20 factories around the capital New Delhi, says that politicians - for all their promises - have shown no interest in acting to avert a looming employment crisis.

"The government doesn't care," says the outspoken 66-year-old, who got his first break when he sold a batch of cheesecloth shirts to Britain in 1972.

Early on, Dhingra survived a change of fashion that saddled him with a pile of unsold stock. Learning his lessons - to keep close tabs on the market and control costs - he built Orient Craft into $250 million business making 200,000 garments daily.

That success has come despite, and not thanks to, India's politicians, who Dhingra says are obsessed by the size of investments but have given "no serious thought" to how jobs are actually created.

In the 63-year-old Narendra Modi, who polls show could become the next prime minister, Dhingra at last sees a leader who offers a better recipe: labour reforms, cheap land, steady power supplies and better infrastructure.

"Modi understands how to promote industry. He has a track record," said Dhingra, a tall man who cut a patriarchal figure as he strode the floor of his busy factory.

MODI MODEL

Backers highlight Modi's economic success over more than a decade as chief minister of Gujarat, which boasts one of the highest growth rates among Indian states thanks to the type of business-friendly policies that Dhingra favours.

In a recent research report, U.S. investment bank Goldman Sachs estimated that if other Indian states boosted manufacturing employment to levels achieved in Gujarat, India could create 40 million industrial jobs in the next decade.

Yet sceptics counter that Modi's vaunted 'Gujarat model' favours capital-intensive industries and has failed to generate better jobs, while his Bharatiya Janata Party (BJP) had little success on labour reforms when it last ruled in 1998-2004.

Asia's third-largest economy needs 12 million new jobs every year to absorb a growing workforce and urban migrants - a task made harder by the longest spell of growth below 5 percent since the 1980s.

The stakes are high: either India gets its youth working Ė more than half of its 1.2 billion people are under 25 Ė or it will fall further behind Asian leaders like China or South Korea that long ago embraced jobs-driven growth.

That is

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