 "Demonetisation will lead to better jobs, says Naushad Forbes")
Confederation of Indian Industry (CII) President Naushad Forbes talks about various aspects of a CII report, Future of Jobs in India, as well as the impact of demonetisation, in an interview with Indivjal Dhasmana. Edited excerpts:
You are coming out with a report on job creation at a time of demonetisation...
Demonetisation is temporary and is affecting workers in the cash economy. The CII jobs report suggests strategy shifts over 10 years. We have incorporated digitalisation and expect its impact over the longer term will be beneficial. Demonetisation will lead to better jobs less dependent on cash transactions.
Do you think demonetisation will lead to job cuts?
Any job losses are temporary. As soon as there is a movement to less cash use, the economy will rebound, and job creation will resume.
Do you expect GDP growth to be hurt?
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There will be a significant fall in growth in this quarter and the next.
The US Federal Reserve has raised interest rates…
The interest rate hike is largely factored in and is unlikely to affect the Indian economy, apart from short-term currency flows. As it represents a positive turn for the US economy, the spillover for India will be positive in job creation.
Your report talks about a universal safety net. Who will fund it?
We have a system that provides protection to very few workers and no flexibility to companies. We need to bring in more protection to informal sector workers and flexibility to companies. Our assessment is better targeting of subsidies and expenditure management can create the space for expanding social security.
Spending 0.34% of the GDP can provide social security to unorganised sector workers. Social insurance is the way to go for pension and unemployment benefits. And social assistance can be financed through general tax revenue.
The Cabinet recently allowed workers in the textile made-ups sector not to contribute to their provident fund. Does this go against a universal safety net?
The report refers to universalisation of social insurance for the unorganised sector. This can be used for old-age, sickness, disability and maternity benefits.
Not much has moved in terms of labour reforms in this Parliament session. Do you think the unions should be brought on board?
The unions are already working with the government and employers on good regulatory practices. Participative policy-making is necessary for a country like India. The policy on textiles has come up with workable solutions such as fixed-term employment.
When do you think the gap between employment generated and unemployment can be bridged?
Over the last 25 years, India has been among the top ten fastest growing economies and is expected to remain so for the next 25 years. We also have a young and energetic population. These advantages must be leveraged. India has created millions of new jobs during the last 25 years, but they are mostly in the informal services sector. Our report talks about the government’s outreach in policy-making, industry’s investments in skills, and people’s investments in themselves. It suggests strategies for more productive jobs.
Is your report a supplement to the Make-in-India programme?
Make in India is an excellent initiative targeting labour-intensive industries. Tourism, healthcare and natural infrastructure are insufficiently understood in terms of their employment generation capability. Renewable energy, water and sanitation are also potential job generators, and the government has recognised this in its campaigns.