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Can 'Startup India' reverse jobless growth?

The Modi government has to find ways to ensure that the growth in the economy moves in tandem with employment generation at various levels, writes N.S. Venkataraman for South Asia Monitor.

May 12, 2017
By N.S. Venkataraman
 
Day in and day out, the Narendra Modi government has been claiming that India is now one of the fast growing economies in the world and cites several reports by international agencies in support of its claim. While the statistics are impressive, there is huge concern in the country, particularly amongst the youth and the underprivileged section of society, that job opportunities have not increased for them and they are not part of the Indian growth story.
 
The income-disparity gap is steadily increasing and the economic and industrial growth are not generating jobs to the level of need. While the production figures and annual sales turnover of enterprises in different sectors have increased, the growth in employment level in them is showing a declining trend. The production increase and profitability increase are happening due to factors of technology, automation and computerisation, which mean that the number of hands needed becomes less. 
 
This scenario is now the biggest challenge before the Modi government. It has to find ways to ensure that the growth in the economy moves in tandem with employment generation at various levels.
 
Obviously, Prime Minister Modi is conscious of this under-current of anxiety amongst the people.
 
Keeping this need in view, the Modi government has launched schemes such as Startup India and Make in India hoping that it would lead to building huge enthusiasm amongst the first generation entrepreneurs, promote many employment opportunities and lead to massive growth at the base level. 
 
It has also taken special measures to develop skills amongst the people. But such steps are not yielding the expected results and it does not look that positive results would happen very soon.
 
In a vast country like India with steady increase in population growth at alarming level, it is just not possible for the government and organised sector to generate adequate employment opportunities for the rapidly increasing youth population.
 
The only way is to promote a large number of tiny and small scale enterprises which need not invest much in technology and automation and would generate employment opportunities in a big way. With Startup India projects, thousands of such tiny and small scale enterprises are required to be promoted all over India, particularly in small towns and rural areas.
 
When large enterprises are set up, they are supposed to lead to the setting up of many ancillary and small scale industrial units and service-oriented organisations around them, stoking chain of developments, industrial/economic activities and employment. But this is not happening as the needs of such large enterprises are increasingly being met by import rather than from the domestic small and tiny scale units. 
 
Obviously, there is lack of adequate level of skill amongst the small-scale entrepreneurs to set up projects in tune with the global standards and the need of the large sector. However, it should be made possible for the small and tiny scale units set up under Startup India projects to meet such needs. 
 
At the same time, it needs to be pointed out that several road blocks still exist for the tiny and small scale units, where the Startup India projects are expected to be set up to meet the needs. This is a serious issue that the Modi government has to attend to urgently.
 
The fact is that the Modi government has largely played its role and the role of the state governments and local bodies is extremely important to ensure that Startup India projects are facilitated to operate without hurdles. On the other hand, the level of nepotism and corruption in the government machinery at the state government level and local bodies really lead to delays and harassment of the small-scale units.
 
The Startup India entrepreneurs should also introspect about their shortcomings and how to overcome the problems instead of complaining about the various external factors. 
 
There are challenges and opportunities facing the Startup India projects and it remains to be seen whether the youth of India would overcome the challenges and seize the opportunities to meet the expectations of the nation from the Startup India entrepreneurs.
 
(The author is Trustee of Chennai-based Non-Profit Organisation Nandini Voice for the Deprived. Comments and suggestions on this article can be sent to editor@spsindia.in)

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