Priyanshu Singh, country manager and managing director of The Adecco Group in India, part of the world’s largest temp staffing firm, spoke to Mini Tejaswi about India’s twin challenges of education and employment and how the recent Union budget failed to address these critical issues effectively. Excerpts:
Job creation has been one of the key agendas of the Union government. Do you see this commitment highlighted in the current budget?
2017 has not been a stellar year for jobs creation in India. Despite the promises and initiatives of the government on this front, it remains one of the biggest challenges. Rapid automation, policy changes especially in the USA, and lack of private investment across the board worsened the already precarious situation. With almost a million people joining the workforce every month and an education system in need of an overhaul, much was expected in the 2018 Union budget — more so as it would be the last one for the current government.
Where does India stand with its job creation woes?
The budget has a lot to offer to the education sector. It speaks of plans to set up more institutions for higher learning, which is a positive step. At the same time, there is also a need to provide opportunities to gain job related skills post schooling. India’s job creation woes are further increased due to the lack of requisite skills needed for some of the jobs that do exist. As a result, either there are vacant positions or most first timers end up with jobs below their qualifications. There is a critical need to focus on bridging this gap, and it will take much more than the current efforts, for eg Skill India, to turn this around.
The central and state governments should ideally adopt a sector inmanufacturing (preferably) and try to build a global hub around it - skilling, infrastructure, ancillaries, etc could be built as an eco-system around the successful and sustainable ideas. This would be more a long-term benefit than one with immediate returns.
The budget proposes to create more jobs in the formal sector, but no mention about creation of new jobs. What you say?
While the budget speaks of creating more jobs in the formal sector, there is not much mention of creation of new jobs. In an economy as informal as India’s, a mere formalisation of jobs, while a welcome step from an employee perspective, could create an illusion of more jobs while the overall situation doesn’t change much. Infrastructure is going to be the biggest sector for the near future, and that is where most jobs will likely be created. However, most of these would be at the lower end and not sufficient to create jobs for all of India’s teeming graduates and post graduates.
Reducing the corporate tax for companies with turnover less than Rs 250 crore would increase the formalisation of employment in the short term as also likely increase tax collections, but the impact on new jobs would be minimal. Over time, though, this should be tempered with policies to encourage building of scale, and maybe discourage spin-offs.
Did the budget adequately address the twin challenges of education and employment?
On the whole, the budget does seek to address the twin challenges of education and jobs. While it will take more than a few budgets to see sustainable results on both these fronts, this budget is moving in the right direction. The budget speaks of providing support to encourage startups and other entrepreneurship. It remains to be seen how these funds get deployed. Correctly utilised, this could provide a boost to the jobs market.