 "jobs, employment, work")
Emphasising that India should focus on productivity to ensure robust GDP growth, Mastercard president and CEO Ajay Banga cautioned that the country cannot depend on manufacturing alone to create one million jobs a month which it is aspiring for.
"My belief is that what India is trying to do and needs to do more of is democratising productivity. India is all about creating jobs and quality of life. Whether you are a politician or a government employee, private sector person, mother, rich businessman, if you create jobs and you give quality of life that's all India is speaking about now, he said on Monday.
The India-born head of the American multinational financial services corporation was addressing the 6th New India Lecture' on the topic The Importance and Impact of a Purpose-driven Business' organised under the aegis of Consul General Ambassador Sandeep Chakravorty at the Indian Consulate here.
The lecture series is organised by the Consulate in partnership with the US-India Strategic Partnership Forum (USISPF).
Voicing concern about India's over-emphasis on manufacturing to grow its economy and create jobs, Banga said, You are thinking only about manufacturing today, everything about India is manufacturing. That's where I differ."
"The manufacturing train is a hard train to get on today because supply chains in the world are getting disrupted, trade barriers are going to create further disruption of the supply chain. Besides, the cost of production in India is much higher than the cost of production elsewhere," he said.
It irritates me no end that India does not get the idea that democratising productivity cannot continue to be done with yesterday's rules. It needs what is going on today plus more. Yes (it needs) Goods and Services Tax (GST), yes demonetisation, yes skill-building and focussing on other sectors like tourism, the Mastercard CEO said.
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Giving the reasons why focus on only manufacturing concerns him, Banga said apart from changes in supply chains and trade barriers, Artificial Intelligence and robotics will create a different manufacturing environment from the one that has existed in the last 30 years.
India needs to provide a million jobs a month. You cannot create a million jobs a month only from manufacturing. Manufacturing is only one component, he said.
Banga applauded Prime Minister Narendra Modi's focus on digital India, saying digitisation will help in job creation as will focussing on sectors like tourism.
It's going to need to unlock the power of entrepreneurship of women in India. There is progress in some of these areas and in others more energy is needed, he said.
Speaking passionately about his thoughts on India's future, Banga said the country does not have dearth of labour but has low productivity. He stressed that GDP growth does not depend on labour growth alone.
GDP growth is equal to growth of labour multiplied by growth of productivity. India has lots of labour and thanks to the demographic dividend, it will have lots of labour maturing over the next 25-30 years. But India does not have productivity, Banga said.
If you don't get productivity, you cannot get GDP growth. You cannot get GDP growth only with labour growth. You will get a very low level no matter how much effort and energy you put into the system, he said.
Banga noted that 80 per cent of India's labour outside of agriculture is in the informal sector. The informal sector by the nature of the beast has no form of contract and health benefits, of increasing a person's productivity. It's a low productivity sector, he said adding that there is no incentive for an owner of capital or of business to make its employees more productive.
Emphasising that he is bullish on India's future, Banga said he is also worried that the country does not have 25 years to fix this situation. Time is not on our side because that demographic dividend could change into challenge relatively quickly.
Banga made a strong call for India to focus and leverage its tourism industry given the richness and variety in culture that it has to offer. India gets 10 million tourists a year as compared to New York City's 47 million a year and Paris's 80 million.
We are talking about 10 million in a country with the richness of India which has everything to offer. What does India not have? There is no point in producing only incredible India ads. Change what people see when they go there, what they feel there, he said.
On the need for India and its government to do more to empower women, Banga said half of the country's population is women and they must be empowered to run businesses, work and be educated.
You will see India's productivity being unlocked in a way that nobody would have dreamt of 25 years ago, he said.
Banga said pointing to politicians alone to undertake measures to empower women will be a mistake, instead the country's citizens have to take things in their own hands.
When you think about the India you want to have, think about an India that democratises productivity and cares about a woman," he said.
He also underscored that it is not acceptable to make a girl child feel inferior to the boy in the family by asking only her to focus on household chores. How is that ok? How is that acceptable? That is not democratising productivity. That is enhancing a feudal system for the future.
