It is about eighteen months that the new government took over the charge. The manifesto which the present government prepared and presented had a huge promise through the catchline of Achchey Din (good days). Month after month media kept writing about the gap between the promise, policies and practice. The government has been on toes for providing a boost to the economy and to send across a strong message that they are committed to bring Achchey Din. There were surging effects witnessed in the market and the steps so taken were being building positive business sentiments across different sectors of economy. Different agencies got interested in sharpening their eye towards economic growth that was projected.
The World Bank recently has put forth positively a strong scenario for Indian economy, better as compared to our mighty neighbor China. It estimates that India is going to grow at 7.5 per cent in the current fiscal so far as its GDP is concerned. It is the result of the efforts that government has taken through required reforms towards encouraging FDI and developing platforms for the ease of doing business. The growth has been surrounding financing, insurance, real estate, hospitality, transportation, communication and other business services.
Through Make in India initiative the government expects that the manufacturing sector would form one fourth of GDP as against around one seventh where it is today. It has resulted in huge investments by multinational manufacturing giants to put forth their energy in India through choosing it as a destination of production as compared to that of availability of market. Sectors like telecom, medical (for devices), single-brand retail, railways (construction, operation and maintenance of specified activities) have been opened fully for FDI. Amar Babu, COO, Asia-Pacific & Chairman, Lenovo India says ‘The Indian government’s thrust on Make in India has opened up a plethora of opportunities for organizations looking to conduct business in India’. Lenovo and Motorola are going to be produced in India through the plant of Flextronics near Chennai. Flextronics is world’s second largest electronics contract manufacturer.
A Taiwanese public firm Foxconn is the world’s largest electronics contract manufacturer which produces on behalf of Blackberry (earlier known as Research in Motion-RIM), Apple, Sony, Amazon, Sharp, Toshiba, Nokia, Motorola, Huawei, Cisco to just name few. Now it is entering India with 5 billion USD investment in their manufacturing arm and it is estimated that it would provide job opportunity to more than fifty thousand youth. Further it plans to have more than ten units in India across states by 2020. Just to mention, it employs more than 1.2 million people in China. And if things go well in India I see a possibility of Foxconn becoming world’s largest employer in the years to come. Twenty One electronic clusters have been given approval. India is expected to become a manufacturing hub for all kinds of electronic gadgets.
General Motors is planning to invest one billion USD in the years to come to boost its production facility and capacity in its plant in Maharashtra which is going to further provide employment to sizeable youth. Ford Motor plans to manufacture EcoSport in India for exporting it to US. German car manufacturer Mercedes-Benz is putting efforts towards doubling its manufacturing capacity in India. These are few cursory announcements made by these companies in last few months.
At a time when about half of the world population is having access to the internet, Digital India initiative of the government of India is yet another intervention which shall propel the growth of service sector. The greater challenge shall be to develop requisite infrastructure to counter industry expectations and responses. There are going to be more technology driven startups in all parts of the country. Use of technology for logistic support and for delivery of services has provided boost to India in a big way which is attracting world players to enter this market. However employability of our graduates is still a major concern which is expected to be addressed through Skill India initiative. It is believed that once it is embedded in our education system, it would enthuse an exceptional level of confidence in youth to take up initiatives to stand on their own feet. It would also facilitate manufacturing and service sector where huge job opportunities are expected to grow. Demographic dividend has to be capitalized through empowering youth in developing their competence levels. Job portals report that there is going to be huge demand of jobs in the areas of Ecommerce, Banking & financial services, IT & ITeS and retail sector and some signs have already started in that direction. The challenge would be to make youth employable through imparting required skills.
The end of this fiscal shall pave way for the next fiscals and I have reasons to believe that Achchey Din would be a reality for the economy of India and the unemployment rate shall go down below 4 per cent. Youth would have ample opportunities to explore possibility of making choices for their future career and it would really be a positive thing if India is able to drive back that talented workforce and entrepreneurs who migrated to other countries in search of better pastures.
The question as to whether we are able to enthuse a sense of entrepreneurship among the youth or not has to be seen from the perspective of their dependence on available job market. The youth has to start thinking differently as they have to play their role in providing employment rather than seeking one. The current year has witnessed many startups and the support from the venture capitalists is remarkable. This trend has to continue and has to further spread across the geography so that small sector grows at a better pace.
All that I have mentioned so far is related to market, economy, opportunities and physical infrastructure. The sentiments are positive and the business opportunities are growing much faster than before. Corporates are competing to capture better share of the pie and the customer is flooded with choices. Perhaps things are going to improve a lot on this front and India is going to become a destination of attraction for foreign investment. The investor might feel safe in putting the money here. However it would be seen whether economic growth would really result in improving well-being or not. GDP is a strong measure of development accepted by economists and policy makers but much more than that is the indicator which shows reduction in the size of poor population, improvement in education levels and health parameters. Social infrastructure has to back economic growth otherwise the visible development of physical infrastructure shall create white elephants and it would utterly be a challenge to sustain it for the future.
We were taught lessons on mixed economy structure. We have a lot to do on social front and it requires an urgent attention of the government and policy makers. The economic growth led Achchey Din might not sustain long in the absence of good education and good health standards. And as witnessed putting health and education in the market shall do more harm than good for the cause of Achchey Din.