Rational China approach can boost Indian jobs

By Hu Weijia (Global Times, 10 April 2019) – During the 2014 election campaign, India’s Bharatiya Janata Party (BJP) said the country had been led through “10 years of jobless growth by the Congress-led UPA Government,” and promised that after coming to power, it would “accord high priority to job creation,” according to Indian media reports. Five years later, similar accusations over “jobless growth” have rebounded on the BJP itself, as the Congress party highlights job creation in its election manifesto.

One achievement of Prime Minister Narendra Modi during his term has been that he made India the fastest-growing major economy in the world. Whether or not he wins re-election, there is no question that Modi has had a positive impact on India’s economy. But frankly speaking, India so far hasn’t found a fundamental solution to its “jobless growth.” Not enough jobs are being created in the populous nation, despite optimism about India’s prospects for economic development.

The specter of jobless growth is one of the toughest challenges facing the BJP during this year’s election campaign. To win a second term in office, Modi has to build public confidence that his administration can solve the employment problem.

Why hasn’t India’s high growth rate translated into a fast increase in jobs? In the past five years, India’s economic growth has been driven too much by domestic consumption, and its export sectors haven’t been fully developed. Indian manufacturers are mostly small and medium-sized enterprises (SMEs) with limited funds. But in the era of globalization, SMEs are generally less competitive than strong multinational foreign-based companies such as Apple Inc and Samsung Electronics. The competitiveness of products from such multinational companies is the outcome of technological advances, intensive production, lower input costs and abundant financial resources, none of which can be realized by SMEs. 

India usually accords high priority to opportunities for entrepreneurship in a bid to shore up job creation. However, India can hardly develop an export-oriented economy by relying on small homegrown brands. The emerging country has to transform itself into a processing base for foreign-based companies to create jobs on a large scale.

China, which is having a boom in outbound investment, is an important global source of manufacturing investment. It is almost impossible to talk about attracting foreign investment without cooperation with China. A more rational attitude toward China is needed by India during the election campaign to deal with its jobless growth problem.

The author is a reporter with the Global Times. [email protected]

Comment Here