The December figure for industrial production at 7.1 per cent, compared to November’s 8.8 per cent, signals the need to pay attention to job creation and tackling rural distress. The silver lining, however weak, is high growth in manufacturing as it is this sector that provides jobs which in turn will boost production. Growth, however, must be commensurate with demand, as it’s estimated 13 million people enter the job market annually, or roughly around 35,648 people every day. Against this, just six million jobs are created annually, and these too aren’t always of a permanent kind. Employers increasingly preder to hire contract workers in order to circumvent labour laws.
Mr Modi’s election promise of 10 million jobs and doubling farmers’ incomes have come back to haunt the economy in the fourth year of his government. Indeed, this week the government reiterated its intention to give farmers cost plus 50 per cent bonus. How far will this oft-repeated promise be implemented remains to be seen. But the entire job creation issue is crying for a resolution.
Even if the Central Statistics Office revises this figure of 7.1 per cent growth in industrial production as it did with the November figure, it would still be low. Job creation is the key to increasing demand, which in turn will put purchasing power in the hands of people, particularly in rural India, where the bulk of the population lives. More out-of-the-box thinking is needed to create the jobs that may make the Prime Minister’s promise a reality and meet the needs of 13 million people who enter the job market every year.