Some ONE MILLION ( ten lakh ) youngsters enter the job market
, EACH MONTH
How much CAPITAL ( fixed + working ) would be required to give jobs
to all of them ?
Following are my guesses to create just ONE JOB in :
·
Pan Beedi shop (
self-employed )………….Rs 1 lakh
·
Tiny grocery shop ( owner operated )…. Rs 3
lakh
·
Barber shop
…………………………………………..Rs 5 lakh
·
Pharmacy shop……………………………………… Rs
10 lakh
·
Auto Repair Garage………………………………. Rs
20 lakh
·
Small Factory ( 50 people )………………..
Rs 50
lakh
·
Medium Factory ( 100 people )…………….
Rs 75
lakh
·
Large light engineering
factory………………Rs 100 lakh ( Rs 1 cr )
{ Just
proposed SAMSUNG factory in UP will invest Rs 5,000 cr and , at full capacity ,
employ 5,000 people }
·
Machine Tool Manufacturing
factory…………………. Rs 2
crore
·
Heavy Engineering factory ( Pressure Vessels )…. Rs 5
crore
·
Service Industry ( based on IT / internet )…………. Rs 50 lakh
It is not difficult to see WHY jobs are not getting created ,
despite the fact that we have a huge DOMESTIC MARKET to serve 1.3 BILLION
people !
It would require a huge amount of CAPITAL to create jobs for 12
million people, each year
On top of that , labour costs ( in organized sector ) are rising
very rapidly , prompting the businessmen / industrialists to resort to “
mechanization / automation “
A report in Times of India ( 09 June ) , titled ,
“ India Inc deploys more capital than
labour “ ,
provides following information ( source / Annual Survey
of Industries / CSO ) :
·
Employment Growth ( 1980-2015
)………………. 1.9 % per annum
·
Capital Growth – CAGR (
1980-2015 )…………… 14 %
·
No of Employees / factory :
# Early 1980s…………… 80
# 2014-15……………….. 60
·
Total Capital Employed / Factory :
# Early
1980s………….. Rs 5 lakh
# 2014 – 15……………. Rs 10 Crore
·
Unit of Labour :
# Early
1980s………… Rs 10,000 per year
# 2014 – 15
………… Rs 157,000 per year
·
In 2009 – 10 :
# Cost of a Unit of
Labour……………. Rs 1.47 lakh
# Cost of a Unit of
Capital………….. Rs 1.32 lakh
·
In 2014 -15 :
# Cost of a Unit of Labour………….. Rs 2.54 lakh
# Cost of a Unit of
Capital…………… Rs 1.46 lakh
Since businesses / industries in large
organized sector have to get ever more “ Competitive “ with arrival of Foreign
Companies in India , it is not surprising that they are resorting to more and
more “ mechanization / automation “ , given the above-mentioned scenario
That means less and less job opportunities
! More and more unemployment !
IS
THERE A WAY OUT ?
May be , if we set aside some “ holy cow “
beliefs and make India , a “ Low Cost Economy “
Policy Makers may want to consider following
suggestions :
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It is still not too late
!
22 June 2017
www.hemenparekh.in
/ blogs
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