Dear Members,
Greetings of the Season! October this year was unusually sultry at least here in Mumbai. However, the season has been ‘hot’ not just in the meteorological sense. The political climate has been hot with large number of hot seats at stake in Bihar. The professional scene is also hot with ICAI elections on 4-5 December. The fraud reporting landscape has been hot too, with a new type of scandal breaking out, from none other than the Volkswagen group.
As a patriot, the theme of India keeps on playing in my mind. Although India is such a wild, ever changing mix of positives and negatives of all hues, there is something about our country which makes us feel deep down that we will surmount it all. When we read statistics we can just skim through the magnitude and complexity of the challenge at hand. One theme that really fascinates me is the theme of gainful employment for all. Not only from the economic angle but also from every other perspective we can imagine.
Today, the generally accepted number of people who join the workforce is about 1.2 crore (12 million) each year (it could actually be higher). The job creation is barely 25-30 lakh jobs per year. Although, we frequently hear comparatively less relevant numbers such as stock indices, this indicator is downplayed. Yet, it is perhaps one of the biggest internal threats, which could potentially be an epidemic that could potentially become unmanageable, both economically and socially. A recent Hindustan Times report (25th August 2015) stated that a Chhattisgarh government department received 75,000 applications for 30 posts of peons. However, the startling fact is not the disproportionately large number of applications compared to openings, but what the commissioner of that department said “several engineers and post-graduates in arts and science also applied for the job”. The reality on the ground level seems to be serious. Unless the jobcreation, and that too for better paying jobs, is faster than people entering the job market, we are likely to pay with social instability.
Of course the role of the government and expected speed of reforms cannot be over emphasised, when our population is turning younger1. Although the Make in India program seeks to address this and the Prime Minister himself playing the role of its ambassador for attracting investment from across the globe, the challenges are very steep. Today the capacities across the world are excessive in almost every sector, demand is not growing as one would like, credit is not cheap in India and ease of doing business has only gotten better by some 4 points as per the latest World Bank Report.
Let’s start to look at this from the perspective of reliability of data on employment. Since policy making and all that follows thereafter depends heavily on data, measurement needs to be accurate and valid, to be reliable. With a large unorganised sector and a bunch of government agencies producing this data at long intervals and with incongruous basis and results, this data is all that is there.
The Conundrum gets even more complex when you look at some data points. When one looks at the GDP growth in the manufacturing sector, the employment growth in this sector is much lesser than the value add. Another data point is the estimated addition of 54 million people to the working age population coming from UP, Bihar, MP and Rajasthan between 2011 to 2021. More developed states like Maharashtra, Gujarat etc. are likely to add 22 million people. To deal with such possibilities, a reliable basis and real time measurement is imperative. There is a well known axiom – you can only change that, which you can measure. This measurement and mapping project perhaps requires the thrust like the ADHAAR project.
A direct fall out of unemployment could be the souring of the ‘demographic dividend’ story, if we do not look at this many faced monster of: job creation rate – skill development2 gap – hands without work3 – unorganised sector – lack of data reliability– low ease of doing legitimate business – inflation and the structure of labour force, we are headed for some trouble. The price of unemployment arising from low GROWTH could be worse than higher price due to INFLAT ION. From the Chhattisgarh news, the choice seems quite clear and I hope that the Reserve Bank understands the difference between not having any wage to buy food vs. eating less due to high prices.
4th and 5th December are big days for the Chartered Accountant fraternity. We all will have the opportunity to elect the people we want to be led by. Leadership has emerged as one big challenge in our country. Now that most of us have faced the barrage of messages wishing us for every possible reason, we now have the opportunity to cast our vote for the right candidates. I hope you will be able to make your choice wisely – firstly to decide to vote and then decide to select the appropriate person. I wish that as a fraternity we make a choice that is based on competence and credibility of the candidates, a choice that will rise above every other divisive factor. The questions that we need to ask before we choose is – Will this candidate be fit to lead and pave the way for the profession? Does he/she have the integrity, energy and capability to make the right decisions for the profession as a whole? I hope we bring the best central council possible in these challenging times for the profession.
Every holiday season calls for giving. Giving of gifts, good wishes, prayers and blessings bring out the spirit of the season. Giving, not only to the known, the near and dear ones, but also to those who may need our giving so much more! I hope we can keep this on our minds this holiday season to make it truly blessed for that part of us that is in all. I support the midday meal scheme, a wonderful initiative that is curing the menace of hunger, education and malnutrition, all at once. Just as I found this program, I am sure you too will find a project that you can relate to and support in a measure that you possibly can.
Wishing you and your family a joyous Diwali! May your dreams come true and may you help others fulfil their dreams this New Year. Amen!
