Urbanisation, less regulations key to job creation in India: panel

An article in Mint talks about how job creation in India can be boosted; along with inputs from Manish Sabharwal.
Two key areas — more regular wage employment and female employment—need urgent attention, say experts.

Over 600 million people in India are under 35 and an efficient workforce can help boost the country’s productivity thus economy.

India’s job problem is complex, and to create more jobs, the country must reduce regulations for industries, focus on urbanisation and boost manufacturing, a panel of experts from industry and World Bank said Wednesday at the India Summit organised by The Economist.

The question is whether India can create a million jobs every month, said Martin Rama, chief economist, South Asia at World Bank.

Rama said there is a gap, and the number of jobs are falling. India, he said, has two key areas which need urgent attention: one, more regular wage employment, and two, female employment.

The female labor force participation rate in India is less than 23%. Around 20% of the total labour force earns regular wages.

“Unless we reduce regulatory cholesterol and improve the efficiency of people, it will be a tough environment. The role of the government is to create a conducive atmosphere,” said Manish Sabharwal, chairman of Teamlease Services, a staffing company.

He said India does not have a job problem but wage problem, and efforts must be made to shift the informal workforce to formal job creation in India.

Urbanisation, overregulation, and human capital are three areas that need urgent attention to address the employment problem.

Over-regulation and the multiplicity of laws are restricting the growth of industries, he said. India has 63 million companies, and 12 million of them do not even have offices. Of the total number of companies, just 18,000 have a paid-up capital of Rs. 10 crore each, Sabharwal explained.

Suraj Saharan, co-founder and chief people officer of Delhivery, a logistics company serving e-commerce firms, echoed the sentiments of the Teamlease chairman. The compliance burden is huge, said Saharan, adding that there are too many laws and too much paperwork.

Saharan said the country needs to have a database of workers to facilitate clean hiring, as background checks on employees right now is a tedious process.

However, all three believe that the demographic bulge in India is not a problem, and things have started improving over the last few years. Over 600 million people in India are under 35, and an efficient workforce can help boost the country’s productivity thus economy.

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This article was published in Mint