What is the real reason for unemployment in India, Can Modi government solve the problem?

Its been exactly 70 years since India got independence. Probably with the potential India has, with the talents Indians have and with our hard work and ancient knowledge we should have been Vishwa Guru or World leaders by now.

But what we see is unemployment, poverty, malnutrition and people still suffer to get food, water, house and electricity. Compare a nation like Singapore or Malaysia which got independence 10 years later than us. Singapore which is 4,716 times smaller than India has a better economy compare to us. India with every resource available, with favorable climate could not transform itself into a developed Nation. While Singapore with no land, minimum resource became a technology and educational hub of the world.

So why do we think India failed in every aspect?

The real reason was because our politicians including common man never understood the importance of manufacturing sector in India. Yes, the real job creators which can transform India is not IT or agriculture but manufacturing sector. With due respect to farmers and techies who strive hard in every way possible, we have to say that these sectors cannot create mass employment opportunities.

The reason why we say so is, consider developed Nations like Japan, Germany or US. They are considered the manufacturing hub of cars, engines, electrical appliances and houses some of the world’s biggest IT parks. Ex: Toyota, Honda, Mitsubishi, GE, IBM, HP, Walmart etc. Consider India, how many Indian big companies do you find?! Tata, Reliance, Birla, Infosys, Wipro are few companies which have established themselves well in India. But for a population of 1.3 Billion, the number of companies India has is way too low. Most of our people work for MNCs which provide no job security. These companies do not give mass employment and the lay offs are very common because the companies do not want to exceed the number of employees beyond a certain number. Unlike developed countries which have small enterprises that connect big companies, we do not have them. Mostly what we see in India is, people building E-commerce sites, apps which do not generate mass employment.

But this is not the fault of people, the Indian system has made it most difficult to start a company and its even more miserable running it. Not long ago, we remember how the previous Congress government had literally collapsed the economy with red tapism and corruption. The companies had lost hope in the government, their was no assurance for start ups and no support from the government. In such situation, how would anyone expect India to become a manufacturing sector?!

Getting custom clearances, licences and loans is the most tedious process in India, Bribing every bureaucrat while he treats an entrepreneurs like filth. Water, electricity and lands are most expensive which makes small and medium scale entrepreneurs unable to survive. With no skilled labour, one will have to slog to keep his/her company alive. With multiple tax (before GST) like wealth tax, income tax, corporate tax, customs, excise tax, the small and medium scale companies suffer to the core, while big companies shift their companies outside India.

So it makes manufacturing hub nearly impossible to flourish in India. JRD Tata, Sir M Visveshwaraiah, Vivekananada and the Wodeyars of Mysore were the ones who realised the importance of manufacturing sector in India and tried to establish manufacturing hubs to generate employment. But the greedy politicians since 1947 never supported their ideas nor appreciated their contribution and all they did was to bring the huge companies like Iron and steel industry, Paper industry, rice mills to utter loss and shut down. 30 years back we never depended on China products as much as we do now. Each passing year our imports from China has extensively increased while exports have sunk to the bottom….why so?? Because our manufacturing sector has nearly come to bits and pieces. Today we depend on China for every small material starting from Sindhoor to toys to electronics. China realised the importance of manufacturing 15 years back while India made no effort to revive the sector.

Making the society entrepreneur friendly is very important  for every government in order to generate jobs. Ease of doing business which the Narendra Modi government is focusing needs much more emphasis and a clear vision in order encourage entrepreneur minds. Establishing industrial training institutes, skilled labour plays a very important role in providing support to the manufacturing sector.

The opposition should stop criticizing and spreading fake news against the government for supporting entrepreneurs and start ups and call them pro rich if they want to see India transform into a developed Nation.

Credit: Based on the inputs from Balaji Vishwanath, CEO of Invento Robotics.

Aishwarya S