A $5trillion dollar economy target over the next five years, constant focus on promoting start-ups with investment and business opportunities, and aiming to create an economy that makes living easy by promoting serious innovation capacities – these seem to be the underlying mantra of creating opportunities for the youth under NaMo 2.0 that had been validated by the electorate in 2019.

A recent study had shown that the absolute poverty in India had come down from 200 million to around 84 million people only. This validated the trends that had been noted by earlier studies - Brookings hadfound that the number of people living in extreme poverty in India has reduced from 268 million in 2011 to less than 50 million, while an analysis by World Data lab suggested that the number of people below poverty line in India are now less than 5 crore.This definitely tells a story that is near to impossible to miss now – poverty reduction in India has happened at a pace unseen like before. Should one then be under any doubt on the number of jobs being created in the economy? How can people escape poverty if they are not being employed or are unable to start their own businesses?

The government, unlike some critics may want to believe, has a plan up its sleeve when it comes to generating employment. Investments into infrastructure through the National Infrastructure Pipeline (NIP) into multiple sectors – roads, railways, airports, power plants, healthcare, telecom, education – each sector needs capital and human investment at massive scale. A $5trillion dollar plan that creates prosperity and encourages ease of living all around is one plan that people certainly would support.

The NIP talks about strengthening service delivery in India. To that end, the developments in recent times clearly underline the fact that India’s strength lies in the service sector, which is for sure a strong economic driver. Significant growth in sales of commercial vehicles and passenger vehicles tells you a picture of people being employed at various strata in the service sector. Net of exports, approximately 10 lakhvehicles were sold in FY19 in India. Even if one were to use an adjust factor of 25% to account for replacement of vehicles, there are still7.5 Lakh new commercial vehicles added to the transport sector. With an assumption of employment capacity per commercial vehicle pegged at 2, one clearly sees that 15 lakh jobs were added within a year in this sector alone. Add to this the sales of cars, 3 wheelers and tractors, and one realizes that over 30 lakh, or 3 million jobs have been created in this sector alone yearly. Moreover, the economic productivity that has arisen as a result is even more stunning at the macro-economic level – increases cess collection and incomes from transport of goods and services, repairs etc. are spin-offs that also arise. Job for every skill level clearly happens, showing just how detailed a mindset it requires to think global while thinking local.

Speaking of global, it was worth noting that India has been among the top 10 recipients of Foreign Direct Investment in 2019, receiving $73.46 Billion in FY2019-20, an 18% increase over the previous year. This includes USD 463.44 million in the food processing sector in first half of second half of Financial Year 2019, a sector that creates large number of value added jobs in rural sector. How then can one assume that there has been no job creation arising from the various activities, not to mention the benefits for farmers thanks to this investment?

Going Hi-Tech, Opening New Doors

India is a story to watch out for in many ways in the more advanced technology spaces as well. NASSCOM in its annual report revealed that India is the world’sthird largest start-uphub, and 1,900 startups were added in 2019 alone. Between 2014-20198,900-9,300 start-ups were born.Will this not have created massive number of jobs, not to forget the thousands if not lakhs of people who have jumped into the entrepreneurship space, thus becoming job makers and not just job seekers? App-based aggregators have come up in India across food, logistics, e-commerce, mobility solutions and many more such sectors, and have contributed significantly to creating jobs and prosperity for people.

Or take the case of mobile manufacturing. From just 2 mobile manufacturing units in 2014 we have grown to become second largest mobile manufacturing hub globally. Value of electronic equipment manufactured in the country has increased from Rs. 1.90 lakh crore in 2014-15 to Rs. 4.58 lakh crore in 2018-19. How is it then that this growth happened and no jobs were created?

Think of unconventional sectors with great job potential like tourism. Foreign tourist arrivals in India grew 50% in the past 4 years, bringing in foreign exchange earnings of worth more than 28 billion, a growth of 58% in 4 years. Domestic tourism has also grown. Thanks to its growth among others, India is seeing a historic boom in the aviation sector, with over 17 crore people taking a flight last year. Thanks to the UDAN scheme, many more places, particularly Tier-II and III cities, are now prominent spots on India’s aviation map, becoming major growth and tourist spots, creating jobs and opportunities across the board, something validated from data by the Ministry of Tourism (14.62 million job opportunities in the country during last four years) and other research and consulting agencies like KPMG (travel and tourism sector grew at 16% p.a, adding 30-40 lakh jobs each year).

Self-Employment for The Masses

Self-employment is also a critical source of employment generation in India, given that it has always driven India’s economic growth. A critical source to enable people to do this in recent times has been the successful MUDRA scheme, whereby 24 crore MUDRA Loans worth more than 10.4 Lakh crorehave been disbursed to small entrepreneurs. This enables some to set up, and others to expand – the realization that one person in turn ends up hiring anywhere between 1 to 3 people has a profound effect on the scale of its success. A survey by theLabour ministry revealed that MUDRA loans led to a 28 percent rise in jobs, withmore than 1.12 crore jobs resulting from the scheme!Further, the number of workers in the establishments who availed these loans increased from 3.93 crore to 5.04 crore. 51 lakh new entrepreneurs were created solely due to MUDRA. True to what PM Modi said, MUDRA has turned India from being a nation of job seekers to the land of Job Creators!

Looking at some of the more organized spaces, an analysis by the MSME Ministry says that 11 crorejobs have been created in the MSME sector.To add to that, there has been significant job creation among professional service providers such as chartered accountants, lawyers and doctors. Gleaning through the Income Tax (IT) data provides a good indication on the number of new self-employed professionals - an average of 150,000 tax paying professionals were added annually between assessment year (AY) 2014-15 and AY 2017-18, while the number of Income tax returns filed increased by 53% from 3.8 crores in 2014 to 5.78 crore in FY 2018-2019.Further, it is well known that most of these professional tax payers hire support staff, likely to be below the threshold of twenty employees which then makes social security registration mandatory. Assuming each professional hires some support staff, this indicates a few lakh jobs being created annually.

No Dearth of Numbers to Show Increased Employment

A study by McKinsey Global Institute entitled “India’s Labour Market- A New Emphasis on Gainful Employment” has highlighted that increased government spending, rise of independent work and entrepreneurship have boosted incremental jobs for 20-26 million people during 2014-17. A January 2018 NASSCOM Report had pointed out that 1.4 crore new jobs had been created between 2014-17 in four core sectors: Automotive, IT-BPM, Retail and Textiles, with 65 lakh of these in the Retail sector alone.

Or examine the extensive data available on people contributing to social security benefits through the Employee Provident Fund Organisation (EPFO), the Employee State Insurance Corporation (ESIC) and the National Pension Fund (NPS). This is not survey data where a few thousand people are asked and the results then extrapolated. In this data, money is actually being deducted for the various social security schemes.ESIC reported that 1.49 crore had joined in 2018-2019 showing the massive formal employment created in the country.Clearly, the Modi government’s money, or rather the people’s money is where the government’s mouth is.

By January 2020, the Purchasing Managers Index reported India’s manufacturing activity expanding at its quickest pace in nearly eight years. with robust growth in new orders and output. PMI Index expanded to 55.3 in January 2020. The Survey also reported an uptick in business confidence, with participants expecting buoyant demand, new client wins, advertising and product diversification to boost output in the year ahead. Also, the report noted how in response to this jump in sales, the factories had hired new workers at the fastest rate in more than seven years. India’s service Industry has been a major contributor to the Indian economy also increased at a massive pace in the month of December. The Nikkei/IHS Markit Services Purchasing Managers’ Index rose to 55.5 in January from December’s 53.3, the highest reading since January 2013 and above the 50-mark separating growth from contraction. This report also showed that with business revenues rising, service providers continued to increase capacity to meet further strong growth in sales. As per the report, this augurs well for jobseekers, particularly when we consider the results from the manufacturing industry which showed the steepest upturn in employment since August 2012, which came on the back of strong domestic demand showing increase in domestic consumption.

Another plan up the sleeve apart from the NIP is the push for manufacturing. The National Manufacturing Policy identifies employment intensive industries like textiles and garments, leather and footwear, gems and jewelry and food processing, etc. as special focus attention sectors and aims to generate 100 million jobs within the decade. The policy provides special attention for Small Scale Industries as they offer employment opportunities both for self-employment and jobs across diverse geographies.

Further, Team India’s cooperative federalism philosophy that Prime Minister keeps talking about has truly transformed India. West Bengal says it created 68 lakh jobs between 2012-16 and 9 lakh jobs in the last year.Karnataka says it created 53 lakh jobs in the last 5 years, while Tamil Nadu said its investor summit will help create over 10 lakh jobs. With states leading India’s story, the government is going all out to help them chart the path of prosperity.

With a powerful paradigm having been drawn up during the first term, one realizes that the government has created an ecosystem ripe for rapid widespread economic growth. The economic framework has been prepared in a manner that the arrow has been strung on the bow and is ready to be released to hit the bulls-eye.