India's private sector will be the engine of growth in employment in the organised sector in the next decade.
As many as thirty sectors have the potential to create a minimum of 4 to 8 million jobs, mainly in the private sector and at least a third of these will be high quality jobs in the organised sector if the government helps in putting in place a policy and regulatory environment that facilitates private entrepreneurship to harness the unlimited opportunities that await resurgent India.
Cutting the red tape, fostering private public partnerships for ensuring uninterrupted and reliable provision of both physical and social infrastructure -- specially transport and communication as well as basic education and skills training -- reducing transaction costs, revamp the tax structure to avoid multiple taxation and allowing flexible deployment of labour as per business needs will go a long way in creating high quality productive jobs in the next Plan period.
"The time is ripe for India to emerge as an economic power and at least 100 Indian companies are poised to become transnational companies with a turnover of $10 billion each. As many existing units in banking, coal, insurance and large public sector enterprises continue to rationalise manpower to meet the competitive challenges," R Seshasayee, president, Confederation of Indian Industry, observed while making public some of the main conclusions of a study prepared by Confederation of Indian Industry for the Employment Summit it jointly organised on Monday with the Planning Commission, the Government of India, and the New Delhi-based International Management Institute as the knowledge partner.
"The projected employment increase will materialise in spite of continued thrust on capital, technology and knowledge intensity in Indian industry. There are opportunities for growth in all three sectors, agriculture, manufacturing and services. Given the right policy mix and public private partnerships it is possible to ensure that we have not only faster but also inclusive growth. The CII has initiated policy dialogue with government in this regard," said Seshasayee.
The significant growth drivers of employment will be the infrastructure (specially construction), media and entertainment and information technology sectors.
The CII Employment Potential Study indicates that in the automotive sector, for example, which is witnessing introduction of modern technologies, an additional 2.5 million jobs can be created.
In the financial services sector, another 1.1 million are possible. The construction industry could employ 9.9 million more people, whereas the defence equipment sector sees the possibility of generating only 160,000 jobs. Employment potential in banking & financial services sector is 1.1 million jobs.
Other important sectors where high employment is possible are oil & gas (2.3 million), gems & jewellery (3.16 million), healthcare (6.1 million), horticulture (2.6 million), khadi (1.9 million), media & entertainment (1.0 million), retail (9 million), tobacco & tobacco products (6.4 million), tourism (19.6 million), railways (1.9 million), state transport undertakings (2.3 million), food (2.1 million), etc.
The CII Study shows major initiatives are needed to provide skilled manpower for these sectors failing which future growth and employment may not be sustainable.
The Study indicates that for the IT/ITES/BPO sector, infrastructure-related issues have to be resolved to meet industry requirements by 2010. The sector is talking about creation of five new "Gurgaon-plus" townships and five to seven new 'Pune-plus' integrated townships to meet the requirements of the industry by 2010.
Contrary to the popular perception employment growth in insurance sector may decline by 85,000 due largely to large scale restructuring considered inevitable in the four public sector insurance companies. The scenario with regard to retailing and special economic zones (SEZs) are still unfolding.
Although retailing is manpower intensive, it is difficult to predict the net effect on employment. At least 2 lakh (200,000) customer associates will be needed in the next five to six years. Though there are arguments about displacement of traditional jobs and farmers respectively in these two sectors, the study notes that retail revolution will bring many benefits to millions of farmers and secures better quality jobs to thousands of people. There is, however, a need to minimize the social cost of providing better quality products at low price, C S Venkata Ratnam, director, International Management Institute, observed.
As for the affected farmers, the study notes that it is inevitable that the agricultural economy is restructured. Currently, 60 per cent of the workforce in the sector generates a fifth of GDP. Without a major transformation and drastic phasing out of farm employment into non farm and agri-processing, horticulture, floriculture, etc., majority of Indians will continue to remain poor. There is, of course, a need to see that the transition effects are moderated to minimise hardship to farmers.
Besides expansion in business, there is going to be a shift in business form the public sector to the private sector. Non-metallic minerals and heavy engineering machinery sectors also are expected to witness a marginal fall in employment over the next plan period.
Several sectors identified critical skill shortages requiring heavy investments in education and skills development. CII is adopting some IITs. Maruti and Suzuki have adopted two IITs to prepare trained technicians for auto industry.
There is opportunity for at least one B-school to run a manufacturing management school specially for automobile component manufacturing units. Similar initiatives are needed in other sectors as well.
There is a need for building up a massive infrastructure to provide skills training and facilitate a blue revolution to reap the manufacturing sector growth potential while sustaining the present advantage with regard to white collar and professional manpower.
Even in the field of science and technology and management education there is a need and scope for significant increase, both in numbers and quality. There is a need for a dialogue between industry and academia to bridge the skill gap and between industry and government to foster public private partnerships to bridge the investment gap to ensure consistent and adequate supply of high quality manpower.
Each of the 36 sectors, Seshasayee observed, have come out with specific suggestions in this regard.