Would it be fair to say that we are creating 10 jobs when there are 15 people looking for one, and that number in the last few years perhaps has gone to 20?
The key point is what the government is now aiming to do in terms of bringing in size and scale of manufacturing. And secondly, the big challenge was to push the levels of investments because eventually there cannot be a policy of only job creation. There has to be a policy of growth, consequence of which is job creation. Let us get that clear. You cannot be distributing poverty. You have to distribute high levels of growth.
Firstly, the government has pushed for size and scale of manufacturing by bringing in the production linked incentive (PLI) scheme across 13 different sectors. It has allocated $26 billion, which is one of the biggest schemes. But a consequence of the PLI, as the prime minister said, a logical consequence is you’re providing 5% to grow bigger and bigger and bigger in size for the next five years. If you grow bigger, we support you. And as a consequence of that, logically what the country should get is an investment – an increased production of 520 billion in the next five years. That should really lead to job creation. That is the number one point, which is very important.
Second is this government’s policy of asset monetisation. The government is good at doing some things. So government build assets, roads, highways, airports, power grids, pipelines, etc, but government can be rather poor at maintenance. So, the government wants more and more and more assets to be created. What it is doing is it is putting out these assets on InvITs, REITs and on TOTs for long-term basis so the private sector comes in and starts operating. And what does the private sector do when it comes in? It brings equity, it raises debt from financial institutions and it runs it. And the government uses that money to create more and more of assets. The government has created a pipeline of 111 lakh crores for national infrastructure pipeline.
When you had a similar situation as COVID in the 1920s at the time of the Great Depression, they got rid of it through what Roosevelt called nothing else but infrastructure, infrastructure and infrastructure. Therefore, the whole focus is on top-class infrastructure creation, driving a huge amount of assets and monetisation so that the private sector comes in and with it brings in greater levels of efficiency and investment. Once it comes in with investment, it will bring in debt. Therefore you start this whole virtuous cycle of high-level growth, as a consequence of which you will drive job creation in the economy.
Let us talk about the other aspect. You have created the environment, brought in the money, set up the factories or pushed certain sectors that can be sunrise sectors. What about skill matching? Do we have the workforce that is ready for that? Does that parallelly need to be a big focus?
One of the big drivers of change is the new education policy, which really pushes for skill from school level onwards. To my mind that is a paradigm shift. More important than that is what the national skill qualification programme has done – broaden a vast range of skilling programmes and actually equipped people for today’s new generation of jobs in a very big way. My only complaint is that the private sector should pay a skilled worker more than what they are getting now, which the private sector is still not willing to pay. This is very-very critical to my mind.
The second key challenge is as we are digitising in a very big way across sectors of the economy and COVID-19 has only accelerated that pace, we have become a highly data intelligent country from being just a mere data rich country. Therefore, we need to create the new data scientists of tomorrow, the new artificial intelligence people of tomorrow and our IITs need to be restructured to create artificial engineers of tomorrow to really drive India on an accelerated path forward.
A lot has been done in terms of skilling, in terms of both the new education policy and the vast number of skill programmes. But as the world is changing so rapidly as I mentioned earlier, it is very important to understand this. For years we have been exporting in areas where there is only 25% of global trade taking place. You need to get into completely new areas. Tomorrow, hydrogen will be a new area of growth, battery production will be a new area of growth, genomics will be a new area of growth, 5G technology will be a very major new area of growth. These are all sunrise areas of growth. That is how we missed out on the mobile revolution, that is how we became a major importing nation of mobiles, we became a major importing nation of telecom equipment.
That is what this government is equipping us for doing, actually getting into new areas of growth, skilling you for that and preparing you for the world of tomorrow which will really reshape the new world of trade and growth.
How do you ensure that a skilled worker gets paid more by the private sector?
My belief is that, essentially what the private sector will be doing with increased investment will be higher levels of productivity. If you are going to have data, if you are going to drive your company tomorrow, you need to use the data for becoming a completely digital economy. If you look at the top 10 companies of the world, 8 are digital companies. Even the manufacturing companies are all digital companies. Therefore, if you are not keeping pace with the new trends of becoming a digitised company, you are getting wiped out totally.
Look at this new study by Credit Suisse, 100 new unicorns in this country producing a market capitalisation of 240 billion. What it really shows is that there is a completely new era of new start-ups, there is a new era of disruption, there is a new era of digitisation and therefore those companies will grow which get the right people to work for them and pay a higher salary for them. Otherwise you go bust.