India’s economic growth has been the centre of attention globally, and a steady rise in GDP growth could position us as the fastest growing major economy in the world. However, this has largely been a “jobless growth”—relying on pure optimism, governmental reforms and initiatives that seek to cash in on our demographic dividend. We have all the strategic ingredients necessary to bring about focused growth from an economic standpoint, so what’s missing in this near-perfect recipe for sustained development?
It’s the execution. Real growth lies in enhanced productivity and increased revenues that will come about only by creating meaningful jobs for the estimated 100 million millennials who will dominate the Indian corporate scenario over the next 15 years. As India gears up for a major economic upswing, it will be interesting to review the current scenario from a recruitment perspective, and how this heightened focus on developing the country’s skilled human capital will impact our economy in the years to come.
A lot has been spoken about government initiatives to put our economy on an upward growth trajectory, including focused investments in the infrastructure sector, as highlighted in this year’s Union Budget. Dedicated policies for empowering start-ups and campaigns such as Digital India and other reforms can facilitate game-changing innovation in diverse industry sectors. Welcome measures that empower the private sector with ease of doing business mean we could be looking at more structured job opportunities in the organised sector, especially in high-productive segments such as infrastructure, manufacturing, automotive, IT & ITeS, telecom and pharmaceuticals.
While the past year paved the way for progressive development in key economic areas, there are certain risks that lie in front of us, challenging our overall development.
A growing optimism about our economic growth and subsequently the creation of more channels of employment does have some pitfalls that could impact the very premise of making these positive assumptions.
For one, India is not a completely self-sustained economy. Global market weaknesses reflected in our shrinking exports continue to be an area of concern. The existing currency market volatility, which might adversely impact the rupee, has its own ramifications. A weak rupee implies that we will have to deal with high inflation, increased prices of consumer goods and commodities, and higher interest rates on foreign-denominated debt.
Another area is the lack of skill development in our country. Studies reveal that 75% of new job opportunities created are likely to be skill-based. India continues to grapple with the issue of skill development and, it appears, we are not effectively addressing this problem. Skill development needs to be integrated with education at graduate, vocational and higher educational levels. The onus lies not only on the government, but on the private sector as well. In addition to enhancing the employability of the young workforce, focusing on skill development will increase the share of formal employment. This, in turn, will effectively address the massive productivity drag on the economy that informal employment induces through its lack of access to credit and career corridors.
The good news is that the government taking positive steps in this regard. The setting up of 1,500 multi-skill development units at an investment of R1,700 crore under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is a first of the several focused steps towards arresting brain drain and cultivating our indigenous talent pool into a formidable work-ready, skilled and productive taskforce capable of meeting global market needs.
The Indian job market—with its share of ups and downs lately—looks promising in 2016. While the manufacturing sector has received its share of importance in the last few years, India needs to see more action in the services sector, which today contributes to nearly 60% of GDP. There is a dire need to ensure structured growth in this sector, both in terms of production capacity and job creation. Rapid business expansion will help augment this growth by fuelling massive employment drives and increasing the demand for skilled professionals.
The hiring outlook is showing positive signs and sector-wide recruitment is likely to project a bullish trend in the next few months. Having said that, the realities are right in front of us. According to a recent UN report, over 280 million people will enter the job market in India by 2050—this is in addition to the country’s already swelling 300-million-plus population in the working-age category. The need of the hour is to focus on skill development and create more jobs for a labour force that is increasing by the day. The country’s future-ready growth strategy requires an optimistic, forward-looking organisational attitude and the necessary corporate buy-in towards planned investments in the development of human resources. This will have a domino effect and eventually impact other economic factors capable of driving consistent growth in the next few years.
The author is MD & CEO, Randstad India & Sri Lanka