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The Economic Survey 2020<\/a> was tabled on Friday, January 31st, amidst an economic slowdown, coupled with rising food inflation. While the Survey emphasized on the importance of an expansionary fiscal policy and an investment-led growth, it also advocated 10 key ideas that could help address some of the structural issues that have caused the slowdown. Among the idea of creating wealth, enabling entrepreneurs, examining government’s intervention, and reducing financial stress, one of the focus was on creating jobs and growth by emphasizing on “Assemble in India<\/a> for the world” and integrating it into our “Make in India” programme.
The desire to continue to build on initial reforms and programmes undertaken during Modi 1.0 comes across loud and clear in this idea. But what it also stressed was to chart a China<\/a>-like, labour-intensive, export trajectory. It was argued that by adopting a strategy like that of China, India can not only improve its share in global exports<\/a>, but also create well-paid jobs. The emphasis was on specialising at large scale in labour-intensive sectors and enabling assembling operations at mammoth scale, specifically in network products. The survey proposed to combined this with targeting to export to larger economies through prudent trade policies.
Creating jobs will be crucial in order to deal with concerns regarding sustaining consumer demand at the macro level, and the economic survey addressed this issue. Highlighting the importance of the manufacturing sector in its ability to create jobs is also worthwhile. However, following China’s strategy might require some prudence among policymakers given that the world has dramatically changed in terms of technology<\/a> and the environment since China adopted it in the early 1990s. In those years, economies were not exposed to the world of internet and the Industry 4.0, which have and are constantly changing the production dynamics and future of jobs in every field.
Post its liberalization, China rode the wave of globalization and low factor costs aided in creating a scale and capacity that was needed to be globally competitive. During this process, China also emphasized on building its own infrastructure, thus creating a sustainable demand for its own manufacturing produce. As the economy expanded its scale and scope of production, it also evolved in terms of creating its own ecosystem of technology and entrepreneurship.
This time it’s different
<\/strong>Over the past few years, Industry 4.0 has provided manufacturers with faster, flexible, and more proficient processes that produce goods of higher-quality and at lower costs. Manufacturing industry leaders in today’s world have taken an increasingly large role around climate change and environmental sustainability as well as resource scarcity. Besides, India has to fight the wave of anti-globalisation and trade uncertainties that the world is experiencing currently.
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If India wants to be the next manufacturing hub for the world and improve its exports share in global trade, it has to move up the global value chain and has to close a quality gap faced with the best in class among its peers, while ensuring environmental sustainability. This would require manufacturers to leapfrog to newer technologies and transition to a new and exacting definition of competition, both of which will have implications on job creation, especially for the unskilled.
According to a study by WEF in 2018, the adoption of Industry 4.0 may impact low skilled employees because of their vulnerability to automation. These employees and workers may need to upskill or shift their focus to a new discipline to stay in the game. Besides, the technology ecosystem and the social infrastructure, which is needed to support the kind of manufacturing growth the survey envisages, will have to evolve rapidly.
Over the last eight years, the average productivity in India fell to 5.5 percent during FY 2011-18 from an average of 7.0 percent during FY 2002-10. Health and wellness, ecosystem for sustainability, water and sanitation, disparity in terms of education and income are some of the areas that India has not fared well relative to its peers. Over 75 percent of the population work as informal employees. Gender disparity remains high, with a greater proportion of employed women belonging to the vulnerable employment category. India has successfully reduced some of the poverty gap, but owing to its population, a lot needs to be done.
What we can learn from China
<\/strong>One of the things India can learn from China is to create a sustainable demand for its manufacturing products over a long period of time and investing in infrastructure could be the way to follow. One of the largest sources of demand for manufacturing products is the government’s investment in infrastructure and building assets. The good news is the massive infrastructure investment of Rs 102 lakh crore announced by the government in December 2019 suggests that the government is already taking the necessary steps in that direction.
Over the years, China has encouraged its startup system through channelising funds and by being the biggest buyer of its products and services. For the manufacturing sector to be globally competitive and cost-effective, India has to channelize foreign capital (in addition to domestic capital) for investment and has to nurture the start-up ecosystem by building research infrastructure and promoting access to labs and research facilities. An effective collaboration among academic institutes, industry, and the government research infrastructure can go a long way in establishing research and innovation capability in the country. These efforts may not only help technology take roots in the overall ecosystem, but also create jobs for both skilled and unskilled.
India has to work toward building a strong social infrastructure to ensure that the manufacturing sector growth translates into job creation for poor and the unskilled. It can begin from allocating higher resources for health and family welfare, women and child development, human resource development, drinking water and sanitation, and social justice and empowerment.
Doing what China did will be challenging because India has to overcome several structural bottlenecks. However, being selective of its strategy and rapidly growing such identified technologies to global scale and sophistication will help in achieving the aim of becoming a US$5 trillion economy by 2025.
Kumar Kandaswami is Partner, Deloitte India and Rumki Majumdar is an Economist, Deloitte India.<\/em>
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的2020年经济调查提出在周五,1月31日,在经济放缓,加上不断上涨的食品通胀。在调查强调扩张性财政政策的重要性,一个投资导向型增长,它还主张10关键思想,可以帮助解决一些经济放缓造成的结构性问题。在创造财富的概念,使企业家,检查政府的干预,并减少财政压力,重点之一是创造就业和经济增长通过强调“组装印度对世界”,将它集成到我们的“印度”计划。
希望继续进行建立在最初的改革和规划在莫迪1.0遇到在这个想法响亮和清晰。但它也强调是图表中国例如,劳动密集型出口轨迹。有人认为,中国通过采用这样的策略,印度不仅可以提高其在全球分享出口,但也创造高薪就业机会。重点是专门在劳动密集型行业,使大规模装配操作在庞大的规模,特别是在网络产品。调查提出了结合针对出口通过审慎的贸易政策更大的经济体。
创造就业机会将是至关重要的,以处理问题对于维持消费需求在宏观水平上,和经济调查解决这个问题。强调制造业的重要性在创造就业机会的能力也是值得的。然而,中国的战略决策者可能需要一些审慎考虑到的世界发生了翻天覆地的变化技术和环境自中国采取它在1990年代初。在那些年里,经济并没有暴露在互联网和工业4.0的世界,和不断变化的生产动态和在各个领域的未来工作。
后其自由化,中国骑的全球化浪潮和低要素成本辅助创建所需的规模和能力的全球竞争力。在这个过程中,中国还强调建立自己的基础设施,从而创造一个可持续发展的需求为自己的制造生产。随着经济的扩大生产规模和范围,它还创建自己的生态系统进化方面的技术和创业精神。
这一次是不同的
在过去的几年中,工业4.0为制造商提供了更快、灵活、更精通流程生产商品的高质量和低成本。制造业领袖在当今世界已经越来越大的作用在气候变化和环境可持续性以及资源稀缺。此外,印度对抗的反全球化浪潮和贸易的不确定性,目前世界正在经历。
如果印度想要成为下一个世界的制造中心,提高其出口份额在全球贸易,它必须提升全球价值链和关闭之间的质量差距面临着最好的同行,同时确保环境可持续性。这将要求制造商跨越新技术和过渡到一个新的竞争和严格的定义,它们都将对就业产生影响,特别是对于不熟练。
根据世界经济论坛在2018年的一项研究中,采用4.0产业可能会影响低技能的员工,因为他们容易自动化。这些雇员和工人可能需要upskill或他们的重点转移到一个新的学科留在游戏。除此之外,技术生态系统和社会的基础设施,这是需要支持的制造业增长调查设想,将不得不迅速发展。
在过去的八年里,印度的平均生产率下降到5.5%在2011 - 18年财政年度从平均在2002 - 10财年的7.0%。卫生和健康,生态系统的可持续性,水和环境卫生、教育和收入方面的差异的一些地区,印度相对于同行没有表现好。超过75%的人口作为非正式员工。性别差异仍然很高,大比例的雇佣女性属于弱势群体就业范畴。印度已经成功减少贫富差距,但由于人口,很多的事情需要做。
我们可以从中国学习
印度可以向中国学习的事情之一是创建一个可持续的长期对制造业产品的需求的时间和投资基础设施可以遵循的方式。对制造业产品的需求的最大来源之一是政府的基础设施投资和建设的资产。好消息是十万的10乐动扑克2卢比的大规模基础设施投资由政府宣布在2019年12月表明政府已经采取必要的措施。
多年来,中国鼓励其通过channelising基金和启动系统通过其产品和服务的最大买家。制造业的全球竞争力和成本效益,印度疏导外资(除了国内资本)对投资和培育创业生态系统通过构建研究基础设施,促进实验室和研究机构。一个有效的学术机构之间的协作、工业和政府研究基础设施可以在建立研究和创新能力。这些努力可能不仅有助于技术整体生态系统的根,而且熟练和非熟练的创造就业机会。
印度必须努力建设一个强大的社会基础设施,以确保制造业增长转化为创造就业为贫困和不熟练。它可以从更高的资源分配卫生和家庭福利部,妇女和儿童发展,人力资源发展,饮用水和卫生设施,社会正义和权利。
那样做将是一个挑战,因为中国印度必须克服一些结构性瓶颈。然而,被选择的策略和快速增长的全球规模和技术水平将有助于识别技术实现的目标在2025年成为一个5万亿美元的经济。
Kumar Kandaswami是伙伴,德勤印度和Rumki Majumdar是一个经济学家,德勤印度。
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