Unemployment in India is at its 45-year high. India needs to create at least 8 million new jobs yearly. Prime Minister Modi has failed to formulate policies and strategies to implement. India must shed its socialism and go for full and complete capitalism. Compared to China, India has lost 40 years.
Not only did the Modi government not create additional jobs, it also snatched the employment of small traders and their workers because of demonetization. Thus, Modi created a constituency that is opposed to him. People impacted negatively on account of demonetization is large and they will not vote for Modi. The unemployed youth is also fiercely opposed to Hindu nationalism. The protesters are demanding a bigger slice of the budget for education and an end to “the saffronization in universities.”
In the next election, more than 130 million first time voters are expected to vote to cast their ballots, making them potential kingmakers. Young people’s frustrations were evident at a massive protest march in the capital on Feb.7. They demand employment and quality education.
Regulations and policies on land, labor or environmental clearances, and taxation impede investment and growth. Every month India is adding 1.8 million youth reaching working age. The lack of infrastructure pushes up the logistics cost, which at 14% of GDP is the highest globally. There is no vocational training to help the youth to qualify for jobs.
IBM chairperson Ginni Rometty spoke during a company conference in Mumbai on March 13, related to the global issue of job and employment. She said that most Indians are not employable not because they don’t have a degree, but they lack the required skillsets, expected to be obtained from beyond the set educational frameworks, according to news reports in Indian and other media.
I must point out that the Indian I.T. industry applied capitalism and began with almost zero capital. Narayana Murthy, the founder of Infosys, invested Rs. 250,000. Not only is he a billionaire but Infosys has created several billionaires. It applies to the I.T. industry as a whole. The government did not provide any help. Narayana Murthy, Wipro founder Azim Premji, and others took initiative and put together organizations to deliver outsourcing services. These enterprising men provided the infrastructure required, including electricity, water, roads, etc. They did not depend on the government for anything.
Fortunately, the government did not interfere, but offered incentives by not taxing. This is how India started earning foreign exchange though in a small way but became highly successful. The 180 billion I.T. industry is an example of capitalism in India. The Indian I.T. industry has invested several billions in the U.S. If the government does not interfere, Indians are smart enough to grow India’s economy.
The next prime minister of India has no choice but to build the most modern infrastructure in a hurry. This will enable the private industry to start building large-scale factories that can manufacture clothing for export in 100 million pieces each of underwear, pajamas, shirts, bedsheets, tablecloth, pillow cases, towels, dresses, etc. and many household goods.
India has a comparative advantage in wages over China. India has a large supply of labor force needing well-paying jobs. As of now, Vietnam has advanced more than India in emulating China. Irrespective of whoever wins in the next election, the top priority should be to deliver modern infrastructure so that several huge factories could be built all over India.
India’s goal should be to grow its GDP at 10% for the next decade to start with. If India fails to grow its GDP, the youth of India will be restless and they could start a revolution to throw the government out. The Indian unemployed youth is going to say, enough is enough, and make sure the power of the bureaucrats is cut to size.
The U.S., headed by President Trump, and Prime Minister Modi have signed a “Closest Ally” relationship on a par with the U.K. It is now up to India to take full advantage. India can attract massive foreign investment in multibillions year after year. I must reiterate once again that India has no choice but to privatize all public sector corporations for better productivity and efficiency. Too many public sector corporations, including Air India, are running at a loss. By privatizing, India can cut the red tape and corruption. By opening up the economy, and liberalizing, India can become the easiest place to do business.