Manufacturing is considered as the Achilles heel of the Indian economy, and while rigorous attempts are being made to expand this sector, India should not lose sight of the potential of the services sector.
When you get a chance to go around a factory, you go past huge machines, trying to catch the explanations over thundering noise, and come away impressed with the precision, detail and sheer synchronisation that goes on in the manufacturing process. But the question is – will manufacturing create the jobs that India needs?
The shop – floors of a factory are quite bereft of workers, and the machines are doing all the work, happily churning out millions of pieces of the product in rhythmic harmony. The few people wandering around are just keeping tabs on operations, peering into computer screens now and then and fiddling with knobs.
Automation, technology and incentives for capital investments have greatly reduced the need for assembly – line human intervention, and manufacturing appears more to be the domain of knowledge workers rather than low – skilled people, except in few sectors. Labour laws, land acquisition, and permits have further stunted manufacturing which has been in stagnation mode for more than two years.
India has drafted a manufacturing policy targeting creation of 100 million jobs in the sector over the next 10 years. Between 1999 – 2000 and 2011- 12, the number of workers employed in manufacturing increased by 17 million. The services sector on the other hand came up with 38 million new jobs in this period. In the drive to expand manufacturing employment, India should not leave sight of the potential of the services sector to create jobs on a large scale.
The services sector does not quite have the propensity of manufacturing to do without human effort. A film with no actors or technicians would be dull indeed; hotels are still rated on their friendly smiles and I’d really hate to have a beauty treatment done by a machine. It is difficult to imagine hospitals without nursing staff while retail trade depends hugely on the actual presence of people.
According to the World Economic Forum, one in 11 jobs worldwide are related to travel and tourism, and the sector offers more jobs than automotive and chemicals manufacturing combined. The Indian ITeS sector provides livelihood to about nine million directly and indirectly, and wellness employs some three million people.
Services may require a high skill level, but this is true of most manufacturing as well. A survey by the Ministry of labour shows one of three persons in the age group 15 – 29 with college education was unemployed as of 2012-13. Some basic skill training could help make them employable in services sectors like organised retail, BPO, and hospitality.
It is thus equally important to create the necessary conditions to encourage the growth of these sectors, and especially to target a few sectors with greater employment potential. Let us not ignore services in the overall mission for job creation.