NEW DELHI: On a day when the National Sample Survey Office (NSSO) released its controversial job data that put India’s unemployment rate at 6.1% in 2017-18 — the highest in the last 45 years — Prime Minister Narendra Modi leaned on his troubleshooter Nitin Gadkari to remove the roadblocks in employment generation.
The best performing minister in Modi 1.0, Gadkari has been the PM’s go-to person for solving knotty issues, like cleaning up the Ganga.
Modi has now given him two ministries that have the maximum potential of job creation — the ministry of road transport and highways he previously held and that of MSMEs (micro, small & medium enterprises).
In Modi 2.0, officials said India will see a major infrastructure push, both in urban and rural areas. It will include doubling the length of highways to 2 lakh km in the next five years, construction of roads under the Pradhan Mantri Gram Sadak Yojana (PMGSY), increasing the number of smart cities beyond 100 and fast-tracking delayed projects.
The government is of the view that infrastructure development will boost the confidence of domestic and global investors, stimulate economic growth and spur job creation.
The MSME ministry’s role in job creation is equally huge. NRI Consulting, an affiliate of Nomura Holdings, in its report in May said that MSMEs, if nurtured well, can create one crore jobs in four-five years.
A survey by the Confederation of Indian Industry in March this year said MSMEs were the largest job creators in the last four years — with 13.9% growth — and will continue to be so in the next three years.
MSMEs can generate 1 crore new jobs
The MSME sector was the highest job creator, giving employment to around 3.6 crore people in 2017-18. “A deep dive into product groups manufactured in various clusters in India suggests that a dedicated focus on developing these MSMEs can create additional 75 lakh-1 crore employment opportunities in the next 4-5 years through partial substitution of imports,” NRI Consulting said
Economists and the government accept the best way to create jobs would be to revive the micro, small and medium enterprises (MSME) sector, which accounts for maximum jobs after agriculture.
“Reviving jobs has to be a priority, for which farm policies have to be re-tailored to create jobs in farming, food processing and logistics industry. To revive the small scale sector, we need to align our units to the global value chain, allow them freedom to scale up,” said M Govinda Rao, former member of PM’s Economic Council.
However, economists also say the MSME sector itself can’t be revived without addressing slow growth and shrinking consumer demand. “Jobs and MSME sector can’t be revived without addressing growth slowdown,” said Prof. N R Bhanumurthy.