Driven by PM Narendra Modi, the ambitious “Make in India” campaign has never failed to stimulate imagination. Its logo of a prowling lion – an intriguing assembly of cogs, nuts and bolts – symbolizes manufacturing, strength and national pride. It is the testimony to the dreams we have to be the largest manufacturing hub in the whole wide world.
We also have some impressive facts in our favour. For instance, manufacturing has emerged as one of the high growth sectors in India. By 2020, the country is expected to become the fifth largest manufacturing destination, and is touted to hold potential to account for 25-30% of country’s GDP while creating up to 90 million jobs by 2025.
Now, while the sector has captured our imagination in ways unimaginable, the potential of this dream to turn into reality seems to be a long haul – especially when it comes to creating lucrative jobs. While the Government of India is continuing with its visible efforts in the right direction, we as the second most populous nation don’t have enough jobs coming out of the much-celebrated manufacturing sector.
Ironically, the frenzy ‘Make in India’ movement sent the nation into for the new-found admiration for ‘manufacturing sector’, the sector per se accounts for only around 15% of the total national employment, leading us to what we can term as ‘jobless growth’. And whatever jobs are out there in the sector, are woefully low paying in comparison with other sectors, with a visible gender gap.
According to our latest salary index, manufacturing is the lowest paid sector with Rs. 211.7 median hourly gross salary in 2016. This comes as a jolt at a point where there have been concerted efforts otherwise to make India a manufacturing hub. Despite economic growth, the median hourly salary dropped 16% for the manufacturing sector. This daunting phenomenon can pose as a major challenge in attracting talent to the sector.
However, expectations from India’s manufacturing sector are as high are our hopes, especially in terms of worthwhile job creation at that. While the sector holds good prospects for jobs with promising remuneration, what makes it an unsatisfactory scenario is that 65% of India’s population is below the age of 35 – giving us the edge of demographic dividend. Manufacturing sector could have played a huge role in bridging this divide as there is a considerable gap between India’s manufacturing potential and its realization.
Nevertheless, we are the land of selling dreams, and we are completely sold on this one! And therefore, though the fruition of this dream looks challenging right now, with steady vision and great planning, we can salvage and achieve it.
The Indian government has already laid down a red carpet for manufacturing businesses – be it the startups or major corporations. It has backed its initiatives with positive moves towards streamlining policies that ensured consistency and removed various regulatory and bureaucratic hurdles of starting business in India.
In the recent past, the manufacturing sector has also suffered because of poor tax structure and inadequate infrastructure. However, government’s policy reforms like implementing GST and improving public spending through infrastructure projects are again favorable moves for the sector. Many manufacturing industry players have shown confidence in their companies achieving increased growth on the back of introduction of GST and an incessant push to infrastructure such as highways, etc.
With some of these manufacturing sector growth-friendly moves already in place, we now need to focus on making the sector more employment friendly. Presently, a major impediment to this is the nature of Indian manufacturing, which is capital intensive.
On paper, capital intensive manufacturing looks pretty damn advanced and progressive as it involves automation and high-skilled employment, contributing much more to the economic growth. But behind the scenes, it doesn’t help a nation like ours deal with its jobless growth as we have not been able to interweave our rich labor skills (and abundance of it!) with automation. If we get this right, we will see remarkable movement of manufacturing jobs being led by able people, with assistance of technology.
Unlike the service sector that requires specific education and skill set, which a large chunk of India’s population cannot afford and meet, the labour-intensive manufacturing sector is the only ray of hope for India to absorb its burgeoning labour force. With standards of living on the rise, manufacturing sector can be a big boon if it can generate jobs and hand people a well-deserved pay cheque.
The need of the hour is to generate large-scale employment, which can happen by the new-found spirit of encouraging entrepreneurship. Fortunately, government’s admirable initiatives of Start-up India and Stand-up India are in the right direction to promote entrepreneurship, which will result in the growth of small manufacturing units in every nook and cranny of the country, and will result in creation of job opportunities for large-scale employment.
Such small manufacturing units can become the support base of the value-chain that major multinationals seek before setting up their manufacturing hubs in a country. And once we figure that out, attractive remuneration is something to be worked upon to motivate people to join the manufacturing sector, which has only kick-started in India with a long, bright way ahead of it.
At the same time, our skill ecosystem needs an overhaul. According to a FICCI report, India has 5.5 million people enrolled in vocational courses, while China has 90 million of them! The monumental difference clearly signifies a need to have a curriculum that focuses on soft-skills and value-based training that meets the demands of the industry. If we can’t create an education system that fosters employability, it is only unfair to expect a sector to handle employability by itself.
If we can survive these issues by producing solutions that actually work for the manufacturing sector, India being the dream manufacturer in every way is no distant dream.
The writer is Managing Director, APAC & Middle-East, Monster.com