one can take cue from the agriculture sector of india, where the demand for farm produce is not commensurate with supply, to understand the jobs generation issue. on the supply side, the number of growers is high and this has resulted in glut in the market for such crops as wheat and sugarcane. by contrast, farmers who have wisely shifted towards alternative options, for example floriculture, are prospering in an otherwise distressed sector. this is enough to understand what needs to be done in manufacturing and services sectors to generate jobs for the large number of youths entering the labourforce. be it the conventional textile industry or telecom, the demand for their products has hit the wall. thus, these industries cannot be expected to generate the jobs needed in the economy. the information technology sector is not in similar distress and new engineers (with updated skills) are being recruited. this is owing to demand for new tech, including cloud, artificial
wage restraint as a policy action can be traced back to germany, a european country that has trumped china (the so-called ‘factory of the world’) in terms of positive balance of trade. germany is a net exporter and its economy is one of the most stable and commanding. the edge was attained on the back of curbing any imprudent rise in wages of the working class. on the contrary, asia’s third largest economy, india, never cared about the rising government bill on account of salaries.central government employees or those of state governments or public sector undertakings, including banking companies, are paid salaries that are not proportionate either to their labour or to the financial capability of the employer. why do we have a current account deficit? simple, our exports are less and we import more. let us go in some detail. since our wages are high our exports become expensive than those by other countries where wage restraint is exercised.
india is being positively looked upon by the otherwise aging world economies owing to its ever-high proportion of population in the working age group that is expected to spur economic growth. you may find endless bonuses of this, the bottom line is this group needs work, while the sad contrasting picture is dismal job growth rate of the indian economy. while infrastructure spending spree of the current government has given the hope for some occupation opportunities in roads, railways, ports, energy and similar sectors, would this state-backed, public spending-fueled exercise be able to serve the millions staring at work in coming days? the most rational solution is freeing the government sector employment space by lowering the age of superannuation, be it in central, state, autonomous bodies, public sector enterprises or state-owned banks. from current 58 or 60 as the age of retirement, it has to come down to at least 55, or even 52, and as a compulsion, not as
the gem of india’s service sector and of country’s export constellation is in the midst of an inevitable calamity. the scene is far more alarming than it appears at its face, and if corrections aren’t introduced promptly and forcibly, the ripple effects will be felt across the economy. in short, indian it isn’t just driving the service sector and exports, it has also fueled real estate, tourism and hospitality, textile and automobiles, thanks to unprecedented salaries drawn by mid-level, top echelon and even entry level staff in some cases. factors are many, to count a few are automation that will spark a war against human resource, india’s hefty dependability on outsourced projects from united states and many european and asia-pacific countries that is slowly subsiding owing to a backlash from nationalistic fervor and diminishing globalisation, sub-standard and outdated skills of indian workforce that works more in factory-styled way. the cherry on the top is heavy pay packages of it employees