January 15, 2019

Speaking at CII – Workshop on Jobs & Livelihoods, in New Delhi


..has been one area where we have been trying to bring about a change in the way we prepare the youth of tomorrow. Soumya Kanti Ghosh, the Chief Economist of State Bank of India, I think he set the context extremely beautifully for this morning’s deliberations. My good friend Chandrajit Banerjee was able to put together this very-very exciting group of business leaders, government leaders, think tanks, economists, also union leaders I see in the room. So I think we have a very good eclectic mix this morning, a very-very warm welcome to all of you and my season’s greetings to each one of you. Whichever part of the country you come from, we are celebrating Makar Sankranti, for example, in Mumbai or Maharashtra, Pongal in Tamil Nadu, Onam in Kerala. Is Onam now, or is it later, it’s happened already? Or Maghi in Punjab, Poush Parbon I am told in West Bengal where you come from.

So it’s really a time of celebration that we have all got together, and yesterday I was seeing my party president flying kites, celebrating Uttarayan in Gujarat. So I think it’s really a time for celebration. We are ushering in a new year. The New Year brings with it a lot of happy tidings, and I wish all of you and your families a great year ahead. Of course, it’s also Army Day today, and we salute all the people in uniform. They always put the nation first. They stood up for the country and really sacrifice their lives serving the nation. The great personal commitment and I think it’s really the defence forces who give us that feeling of security, the feeling of oneness in the country and ensure peace and harmony. My salutations to all the army personnel on Army Day.

And, of course, there is another good day today, the Kumbh Mela is commencing at Prayagraj, and it will go on till the 4th March. Anyway, if you look at where the Kumbh originated from, I don’t know how many of us in this room are aware. Kumbh basically signifies the amrit, the nectar, which dropped on earth at four different locations where Kumbh is celebrated at different times. And that was the ocean churning, the Manthan, and out of that Manthan the nectar came, amrit came onto earth at four different locations.

So, I just similarly hope your breakout sessions today will give us that amrit, will give us that nectar of knowledge and help us take this dialogue forward in the months and years to come. So my best wishes to all of you and your families on all these three happy occasions.

Of course, Soumya Kantiji put the context very well for today’s deliberations. Very often it’s a situation where we are not able to fully appreciate what’s happening both in India and around the world. With technological changes, with artificial intelligence coming in, 3D manufacturing, the big data analytics, all of these are changing the work profiles of people, not only in India, across the world.

In fact, in Niti Aayog we had some sessions with leaders or thinkers from around the world. And one of the issues that came out when Michael Porter came here or when Bill Gates came here was clearly the changing nature of work that the world is witnessing. We in India are no different. And very clearly, there are going to be more and more new opportunities to work which will probably take some time to define, probably take some time to capture data, but which really can be given an impetus, both by government policy and with the collective effort of industry and business to see how those changing profiles can be both captured in terms of opportunities for the people of India, and then captured in terms of data.

I, for example, see huge opportunities as we evolve around the world with renewable energy, an area which is very dear to Prime Minister Modi where I had an opportunity to play some role in the initial years of this government. And I often use this example of my own assessment of how the changing nature of generating electricity or energy is going to impact the job market.

In the good old days, if we set up a large power plant, maybe a thermal power plant or a coal-based power plant, you could very safely assess and validate and probably come out with a very specific figure of how many jobs are created per unit of electricity, per kilowatt hour of electricity that is generated from a coal-based thermal plant, for example. So you would know how many people are working in the coal mine where coal is taken out, or in the transport system as the coal is transported in the electricity generating station where the thermal coal based plant. And possibly a little bit of indirect employment around that plant where you have dhabas coming up, you have some transporters, some small hotels and the ecosystem developing around the power plant.

When we moved to renewable energy and we tried to do an assessment of the nature of job, the number of people who would get gainful employment – may not necessarily be in the formal sector but in the entire ecosystem around generation of renewable energy, around the maintenance of those setups and large setups they are. I mean, every unit of electricity generated through renewable energy involves much larger setups compared to a coal-based thermal plant.

And looked at the entire ecosystem, my own assessment came to a figure of almost 8 or 10x of the number of people who would be gainfully working around renewable energy and protecting the earth, protecting the planet from the very-very dangerous impact that we are all aware of – the problems of the ozone layer depleting, the problems of carbon emissions.

So, it’s a win-win situation. It’s not something which is detrimental to India’s interest when we talk of increasingly going towards renewable and clean energy. But it’s extremely detrimental to data, when we are trying to put together the data of the number of people who would be employed or would get work around this, you will not get a large power plant where you will have 3000-4000 people working. You may not get a formal data of a coal mine which has maybe a thousand people working. Because all of this would be largely distributed workplaces. It would be largely distributed working environment, many times not even been captured in the EPFO data, which Soumya Kanti talked about.

I mean EPFO data very clearly brings out that in the last year alone, probably 7 million new EPFO accounts were added. In the last 14 or 15 months I was assessing, it’s about 7.9 million. Now this data cannot be entirely ignored. It’s a harsh reality. And by the way, EPFO you only register once you have 10 or 20 people, once you have a 20-people organisation or business unit. Under that you are not even recognizing or including it in the EPFO data.

So very often, we have people who try to wish away this EPFO data’s reality by saying no, it’s just the GST impact because of which there has been a move towards the formal economy, and therefore, the EPFO number has gone up. Initially, we also were a little confused about the reality between these two schools of thought. But then when we assess the large player, the large formal employers were in any case not out of the tax net, in any case, anybody beyond 20 people were registering all their employees in the EPFO data.

So, if at all there has been an impact on EPFO data it has to clearly be either smaller units becoming larger, where you could say that okay, if there was a unit employing 10 people and it became 20, so probably the data of their employment will reduce a little bit. But clearly, it cannot be the entire ecosystem which turned formal or which is now gradually moving more and more towards the formal economy that will represent such a large increase in EPFO numbers.

And when you juxtapose it to the base, and a base created over 60-70 years that’s when you realise that it’s a pretty significant growth, probably never seen before in so many years. Similarly, there are many other data points which I think don’t get captured when we look at employment data.

For example, the other day we were discussing with a large organisation which helps people get gainful employment. And they said that they could clearly see that at least a million people have been engaged in the last year or so in the new age businesses that have emerged. So you have the Oyos and the Olas and the new age businesses which have of late been pretty much shining like a bright star, which don’t formally take you onto a payroll, but give you a good living, working, earning opportunity through a distributed model.

So each one of those 500,000, I think, Ola or Uber drivers is a self-employed individual, and may never get captured into…Ola is not going to give out a data that these many people are employed with us. Probably, they will never even come into the EPFO data, and for which we would be happy to hear some suggestions, some ideas emerging out of this brainstorming on what we can do to really get a fix on the reality, and then, of course, also the problems wherever they still exist.

And in that reality I think ways of capturing data would be very-very important. Whether there is anything we can do on the unorganised employment sector or unorganised sector to also see that how we can bring them into the social security net, is there a way we can go beyond this minimum 20 employment without causing distress to very small employers and their employees, and see whether we can expand this coverage either through ESIC or through EPFO, and yet in a way ensure flexibility in employment, ensure that we do not cause a distress to the very small companies.

And the purpose of today’s engagement, actually I had told Chandrajit don’t even keep any speeches, let’s only have a free and flowing interaction. But I think in his wisdom, he rightly thought that some sort of context setting may help us deliberate better, and in the afternoon session – and I am trying to keep my own time completely free in the afternoon that even if we overflow. But I am very-very keen that these engagements that you are going to have through your different groups are presented and are deliberated and discussed at length amongst all of us.

I have requested Prakashji also, he has agreed to join us for about 45 minutes between 2 to 2.45. So, that way we want to really get some outcome oriented discussions today, help us understand, for example, better ways to look at data, without a prejudiced coloured eye. Of late, I am seeing one or two persons literally like a campaign working to try and drive down all the data points that are available, and with some juxtaposition or some analysis of one or two data points trying to drive down the mood of the nation, the mood of business.

And to my mind that’s not really something we should attempt to do with a prejudiced vision. Wherever there is a problem, we must come out with that and address that problem. For example, if I may submit what I feel is one issue where I would love to hear from you is about something which I had learnt when I was in school. It is not something that has emerged in the last year or two years or three years.

In school, when I was being taught economics or when I was learning about employment, one of the greatest thing that was at that time articulated quite a lot – I don’t know how the school books today talk about it – is underemployment, is about millions of people who would look for an alternate engagement if they were able to get out of the current place where they are or the current work that they are doing.

Now this is no better place where this is reflected than, for example, a government recruitment drive. So, very often, a lot of comments are written and talked about that oh, but when the government asked applications for, let’s take the railways, for example. A 132,000 jobs, right? We got over 15 million people at Bangalore, a 132,000 jobs and about 15 million people applying. Now this is very often touted as one of the data points which shows there is a lot of unemployment. While not denying the fact that a lot of people are looking for engagement with the formal sector, I would like to submit and I would like you to deliberate on this that there are a lot of people who would be probably working in the private sector, there are a lot of people who would probably be doing, who maybe self-employed, or who maybe in agriculture or in different professions or vocations currently also. But the attraction and the lure of a government job in the traditional Indian context is extremely huge.

So you have people who would think that ok, if I can get a government job I am sorted for the rest of my life. If I can get a government job nobody can touch me after that, I am permanent and how. Even if I had misbehaved, even if I am not found to be good in my work, it doesn’t matter. The unions can take care of me, I am sorry, I don’t mean to be….

But that’s the reality that in a very formal setup and more so in the government that kind of a job security that irrespective of performance, irrespective of how you work or behave, you are sorted for life. That’s a lure which will get a lot of people, so I often hear people who would probably have a very good degree and would still apply for a lowly or a very-very bottom of the pyramid job in the government system. And that is being often touted that there are no opportunities for that person. I beg to differ on that. Wherever there are opportunities, we find it very difficult to the people.

For example, when we are looking for good finance professionals, even in the PSUs, we find it very difficult to get very good chartered accountants, management guys from the IIMs or who had studied aboard to even think of applying for a government job. I started that effort as Coal Minister very early on in the day when I advertised that in Coal India Ltd we will open the field and let’s get the best talent from the country to come in and head Coal India as CMD. While I did not get too many applications from the private sector, I certainly got an article in the newspapers criticizing me, and a paper which is one of the votaries of free business and votaries of opening up everything and a big critic of this government, which criticized me for spending money on advertising and opening up the job for the private sector.

Doctors – I am looking for doctors in the railways and how, but not enough people because there are alternate, equally or if not very substantially higher paying jobs or opportunities for self-employment as a doctor. So I think it needs to be deliberated that if at all a person still insists or wants to come into the government sector, is it always for lack of opportunity or is it because there is a certain section which looks at this as a very-very safe, secure and permanent employment irrespective of how good or bad one would perform, irrespective of, even in many cases where misdemeanours come to our notice and we are unable to still take action given the very difficult system that is being created around.

In fact, without any offence to anybody, particularly, since it’s something beyond the control of this government, I don’t know how many of you are aware that if I was to have the opportunity to write Soumya Kanti Ghosh’s appraisal form, the appraisal profile or his CR at the end of the year. I am actually writing his CR and handing it over back to him. Now you imagine, if I have to work with my personal secretary, my private secretary all through the year or if I have to work with all the members of the railway board, with all the general managers of the railways and I am writing their profile and I am handing it back to them. And this goes down the line, right to the bottom of the pyramid.

What can I write in that? I have to get work from the same person for the rest of the years or next year and I am expected to give an honest appraisal and hand it back to him and still continue to work with him and get the best out of him. Now this is something which is beyond the ambit of the government of the day, but probably something on which everybody will have to deliberate and find how we can change. Ultimately, we are all equally interested that the workings of government and the government departments should also improve, should also be upgraded.

So, I think this is the kind of challenges that one faces. I am sure you will also deliberate on which are the new openings given the way things are changing. What we can do, for example, on tourism. Tourism in my view is one area, virgin area, huge opportunities. I had the privilege to Hampi last month, thanks to a daughter who likes to be engaged with history. I am not so much of a person excited about archaeology, but even I was excited going there. It was just phenomenal, and then I read a week ago that even the UN has said it’s probably the second most preferred site or one of the top destinations that the world should look up to.

Now, we need to work together, the government, the private sector, all of us, to see what we can do and which are the areas which need focus. We started the Ayushman Bharat. We can clearly see a hundred thousand new hospitals or dispensaries and clinics being required in this country as a billion plus people start getting healthcare, many of whom never got healthcare for lack of ability to pay. But a free healthcare of 5 lakh rupees a family is going to open up a huge opportunity in the healthcare sector.

In the same way, I think technology upgradation in different sectors of the country are called for. We are going to look at more and more people getting opportunities through reskilling in different areas. I remember about a month and a half ago I interacted with 70 young entrepreneurs in Mumbai. We had a couple of hours of engagements, young and I would say in the age group 22-23 to about 40-45. We have a huge set of people who are working in this age group as entrepreneurs.

And when I spoke about unemployment amongst various issues we discussed that day, believe me, unanimously they all said that we are facing a challenge getting people. One lady said I need 40 people in my team, I am making do with 17. I am not getting the profile of the people that I want. So, I think what we need to work together, government, industry, think tanks, economists, union leaders, all of us, is on what the future holds for the country, where we need to engage more to provide better and more paying and quality opportunities for the youth of tomorrow. How we can capture the data of today more accurately, because ultimately when we go to a doctor unless we know the problem properly, unless we describe the problem properly to the doctor, he will never be able to treat you.

So we should not even get demoralised or not even get carried away by some false data points, or inaccurate or incomplete data points because then we will plan wrongly. We will not be able to really fix the problem unless we recognize the problem correctly. And that’s what I hope during the course of the day all of my friends here will be able to discuss, would be able to come up with some very good suggestions. And I am very-very eagerly looking forward to engaging with you in the post-lunch session.

Once again my best wishes for today’s programme. A big thank you to Chandrajit and the CII for organising this at such short notice, possibly we can do some more engagements in other parts of the country. And at the end of it, maybe by the end of January or something, we can come up with a real actionable agenda on finding the problem, finding what’s reality on the ground and then trying to assess what we need to do to fix the problem and how we need to go forward.

My best wishes to the day’s celebrations. Thank you.

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