Cutting the Gordian Knot by T N Hari

Author:T N Hari
Language: eng
Format: epub
Tags: null
Publisher: Bloomsbury Publishing
Published: 2018-10-25T16:00:00+00:00

The Labour Ministry,8 SSCs and private platforms have tried aggregating supply (skills availability) and demand (job role openings) in a dynamic manner across locations, but a real-time effective solution to ‘matching’ skills to industry demand is yet to emerge. We are still talking about ‘jobs’ here and mostly formal sector at that and this forms a relatively insignificant part of our labour force. As per the 2016 India Employment Report (IEM), in 2011–12, 48.4% of the total work force was ‘self-employed’ (up by 0.4 points from 1999/2000), 30.6% was ‘casual’ labour, 13% was ‘regular informal’ and just 8% was ‘regular formal’.9 Skilling is languishing today precisely because only a small minority of the workforce is in the formal sector. This is also discussed at length in the chapter ‘From Human Labour to Human Capital’. Skilling will get a boost when the formal sector grows. While everyone understands that skills drive wages, there is a less understood reverse causation, which is one of higher wages (mandated by the government) stimulating skilling.

Entrepreneurship: A Path to Non-Linear Impact

As discussed, there are only so many jobs in the market and only so many high paying ones. At the same time, not everyone who goes through a skilling programme gets a job and not everyone wants a job. There are a few who go on to become self-employed or even entrepreneurs. From beauty parlours, to auto garages to electrical shops, more and more individuals are finding opportunities and taking the plunge.

Take the example of this unique programme run in partnership between a leading ophthalmic lens manufacturer and LabourNet in rural Telangana. Rural youth have started their own optical stores and are catering to the visual health of the local community. These young men and women — who were mostly school and college drop-outs — were given a course in optometry that helped them become certified refractionists. With an initial toolkit provided by the corporate at a low cost, they were able to start their stores in their respective localities.

Would the entire job crisis be solved if there were more such entrepreneurs who were filling a market need and creating value? Theoretically yes. However, building a livelihood when one does not even have an identity or safe accommodation, let alone access to finance, social networks or access to a predictable market is a daunting proposition. It requires an entire ecosystem to be working on these multiple aspects to enable livelihoods. Over 50% of MSMEs in India are rural enterprises that have a presence in low-income states. It is found that about 87% of MSMEs in India10 do not have any access to finance and are self-financed. These are precisely the places where markets don’t perform well and hence the need for an initiative like the Mudra Loan Scheme by the government where lending institutions provide loans up to ₹ 1 million for entrepreneurs at the bottom of the pyramid at competitive interest rates.

Automotive Sector – Matching Aspirations with the Market Need

The automotive industry has undergone transformation at an incredible pace in the last six years.

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