Budget 2015: For "Acche Din', FM Arun Jaitley should focus on jobs creation
The real India works in informal jobs (90% of total employment) and massive job creation is the only sustainable way to make India proud of herself again.
Updated:
By Manish Sabharwal
The Delhi assembly election results were a harsh reminder to the NDA that it won the Lok Sabha elections on a platform of development, jobs, and hope. Next week's budget is a chance for the government to remind voters that it is not timid, dyslexic or ungrateful. It will probably be useful for the budget authors to remember the two things that Gokhale told Gandhiji exactly one month and 100 years ago: Go see the real India and make India proud of herself again. Both are related because the real India works in informal jobs (90% of total employment) and massive job creation is the only sustainable way to make India proud of herself again. It is economically and politically crucial that our next budget pray to one god: jobs.
Creating a fertile habitat for private, non-farm, formal job creation needs the budget to fix four things...
1 | Expanding the formal sector and increasing average firm size must get priority. At present, India has 50 million enterprises but only 7,500 are companies with a paid-up capital of more than Rs 10 crore. About 85% of manufacturing is done in enterprises with less than 50 employees. The budget needs to set a go-live date for GST, fully fund a plan to bribe state governments on variables that will bring our ease-of-doing-business ranking to 50, simplify our tax regime and roadmap financial sector reform.
2 | Instead of taking jobs to the people by massive migration, what the country needs is massive urbanization. The budget's focus on infrastructure should combine with a target of raising the number of cities with more than a million people from 40 to 100 in the next ten years — China has 375 such cities. Smart cities are not about hardware but software; to avoid the next wave of cities becoming like Mumbai the budget should offer specific incentives to state governments to create "real" mayors and unify city governance. The Make-in-India plan should be used to shift the 50% of our labour force that works on farms and only generates 15% of our GDP to factories. This involves massive infrastructure commitments to roads and power and a clear roadmap for land title guarantees that will blunt the need for state land acquisition.
The Delhi assembly election results were a harsh reminder to the NDA that it won the Lok Sabha elections on a platform of development, jobs, and hope. Next week's budget is a chance for the government to remind voters that it is not timid, dyslexic or ungrateful. It will probably be useful for the budget authors to remember the two things that Gokhale told Gandhiji exactly one month and 100 years ago: Go see the real India and make India proud of herself again. Both are related because the real India works in informal jobs (90% of total employment) and massive job creation is the only sustainable way to make India proud of herself again. It is economically and politically crucial that our next budget pray to one god: jobs.
Creating a fertile habitat for private, non-farm, formal job creation needs the budget to fix four things...
1 | Expanding the formal sector and increasing average firm size must get priority. At present, India has 50 million enterprises but only 7,500 are companies with a paid-up capital of more than Rs 10 crore. About 85% of manufacturing is done in enterprises with less than 50 employees. The budget needs to set a go-live date for GST, fully fund a plan to bribe state governments on variables that will bring our ease-of-doing-business ranking to 50, simplify our tax regime and roadmap financial sector reform.
2 | Instead of taking jobs to the people by massive migration, what the country needs is massive urbanization. The budget's focus on infrastructure should combine with a target of raising the number of cities with more than a million people from 40 to 100 in the next ten years — China has 375 such cities. Smart cities are not about hardware but software; to avoid the next wave of cities becoming like Mumbai the budget should offer specific incentives to state governments to create "real" mayors and unify city governance. The Make-in-India plan should be used to shift the 50% of our labour force that works on farms and only generates 15% of our GDP to factories. This involves massive infrastructure commitments to roads and power and a clear roadmap for land title guarantees that will blunt the need for state land acquisition.
4 | On labour law changes, we should stay the course with the two broad themes of encouraging states to change laws and avoiding any fiddling at this stage with the hire-and-fire clause. But the budget must create employer and employee choice; it must give employers the option to comply under the Central Factories Act or the state-wise Shops and Establishments Act. The budget must give employees three choices around how they get their salary — first whether to pay employee provident fund or not, second whether to pay employer provident fund to the Employee Provident Fund Organization or to the National Pension Scheme, and third whether to pay their health insurance premium to ESI Corporation or buy IRDA-regulated health insurance.
Sometime over the next decade, for the first time in human history, the world's largest economies (China and India) will also be among the world's poorest economies. But the world's most successful minimum wage programme — the Chinese migration of 400 million people from farms to factories — means that China will soon eradicate abject poverty. India's problem is not job creation but the fact that 100% of net job creation in the last two decades has happened via informal jobs. This means we have too many working poor — people who make enough money to live but not enough money to pull out of poverty. A formal job changes a life in a way that no informal job or subsidy ever can. The global economic downturn ensures that India is attractive by contrast; the budget is a great opportunity to build on this luck by demonstrating boldness. Counter-intuitively, acting and thinking like a one-term government by aggressively taking on the vested interests and regulatory cholesterol holding back massive formal job creation is NDA's best bet for a second one.
(The writer is chairman, Teamlease Services)
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Related Articles
DC vs RR pitch report, IPL 2026: Check Arun Jaitley Stadium pitch, Delhi weather forecast and match conditions2026-05-17T11:31:19Z- DC vs CSK Delhi Weather Updates: Check Arun Jaitley Stadium pitch report for IPL clash2026-05-05T12:18:07Z
- DC vs CSK Playing 11: Predicted XIs and head-to-head record at Arun Jaitley Stadium for must-win IPL 2026 clash2026-05-05T11:30:34Z
Text: Devina Sengupta, ET Bureau
India Inc is rallying for diversity, and companies heading to campus or hiring laterals have to meet the gender diversity quotient.
Representatives of all sections of society are also on interview panelists’ ‘must have’ list.
Although like in every process, the human element of bias could creep in here, there are ways to avert it, says Devina Sengupta.
India Inc is rallying for diversity, and companies heading to campus or hiring laterals have to meet the gender diversity quotient.
Representatives of all sections of society are also on interview panelists’ ‘must have’ list.
Although like in every process, the human element of bias could creep in here, there are ways to avert it, says Devina Sengupta.
ADVERTISEMENT
