Panagariya blames industry for employment crisis [Economy]
- Indian entrepreneurs’ tendency to invest only in capital-intensive businesses or those requiring high-level skills is to blame for the employment crisis in the country, according to Arvind Panagariya, Vice-Chairman, Niti Aayog.
- The successful industry in India has tended to be capital-intensive or skilled- labour intensive.
- Capital intensive sectors do not create well-paid jobs for those at the bottom of the pyramid.
- While Indian firms have succeeded in sectors such as automobiles, software, telecom, finance and engineering, investments in clothing, light manufacturing or food processing, where jobs could be aplenty for people with less or no skills, had been abysmal.
- This is the reason why the transition in India of taking the workforce out of agriculture towards industry and services is the slowest in the world.
- While it was transformational growth, we didn’t see a transformation in the workforce because not enough well-paid jobs were being created for those who could migrate from agriculture.
- It is actually an issue that industry associations need to take up on a war-footing, seeing the high average growth of 8.3 per cent from 2003-04 to 2011-12.