Business

Panagariya blames industry for employment crisis

Arvind Panagariya

Arvind Panagariya  

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. If I may be blunt, our entrepreneurs have a Brahminical attitude towards entrepreneurship so the industries that they get into are either towards the high-end of technological or capital deployment,” said Mr. Panagariya at a conference hosted by the Confederation of Indian Industry (CII) here on Monday.

He stressed that these sectors did not create well-paid jobs for those at the bottom of the pyramid.

“We have just not done a good job of creating jobs with over 90 per cent of our workforce in the informal or unorganised sector, where jobs are clearly not well-paid,” he said.

Rampant underemployment

“If you look at any set of statistics on unemployment — those numbers are not terribly high. If you take a liberal definition, then it’s about 2 or 3 per cent (of the working-age population). If you take a highly conservative definition, it could be around 6 per cent,” he said stressing that underemployment was rampant and resulted in lower productivity. 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, Mr. Panagariya said.

“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,” he said.

“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. That is actually an issue that industry associations need to take up on a war-footing,” Mr. Panagariya said citing the high average growth of 8.3 per cent from 2003-04 to 2011-12.

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Printable version | Sep 20, 2020 2:32:49 PM | https://www.thehindu.com/business/Panagariya-blames-industry-for-employment-crisis/article14558972.ece

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