Local Green Enterprises:
Possibilities to Reverse Trend of India’s Jobless Growth
is seen as a bright spot in the global economy landscape. It is one of
the fastest growing emerging market economies in the world (IMF, 2017).
What does this really mean to the people of the country?
Does it mean more, better and decent jobs
for the people of the country?
Analysis (Mint, 2018) (Wire, 2017) shows
that there are indications of jobless-ness nature of India’s growth.
Some other analysis reports (Mint, 2017) (The Print, 2018) point out to
deeper concerns, highlighting, that there may be enough jobs but not
decent jobs, not jobs that are well-paid. Most of the workers, 84% of
all, whether self-employed, regular wage earners, contract workers or
casual workers, were getting an income of less than INR 10,000 per month
(Mint, 2017). Economic growth may lead to lesser jobs, if the strategies
of economic growth do not emphasise on valuing labour. A very critical
point here is how sectors and scales of these sectors need to ensure
that they must ensure and enable better jobs and livelihoods for people.
Further to that, some studies (World
Economic Forum) estimate that 85% jobs of 2030 have not been created
yet. This means that there is need for huge investments in re-skilling
and focus on quality education and skilling systems in the country.
it mean better ecological systems for the country?
Bright spot in the global economy surely
means that India will become a global hub for production and services.
This intends to translate into boom for industries and businesses with
rise in demand of their products and services and higher economic
activity. Service based cities of India like Bangalore, Gurgaon and
Hyderabad are indications to the nature of development that service
sector boom (IT, banking and insurance) can induce.
Industries and businesses are centres of
mass consumption of our resources - water, fuel, minerals and other
material sources. All of this majorly factors into the kind of air
pollution levels city dwellers have to live in (due to traffic,
industrial pollution); the quality of water in the area; and the waste
castles and the environmental hazards associated with it. Many urban
centres in the country have surpassed their ecological boundaries, where
living standards have deteriorated. The recent Report on 11 out of the
12 most polluted cities on a World Health Organisation list were in
India, is perhaps a manifestation of the same phenomenon. So economic
growth may not translate to better ecological systems. In fact, it can
degrade them further, unless adequate systems and regulations are set to
keep checks and balances.
Capturing Global Lessons: Government of
India’s Approach to Address Jobless Growth
Existing government programmes (including
new programmes like Skill India, Start-Up India, Make in India) may have
marginally added few jobs to the overall demand-supply gap in selected
organised sectors of employment, but none of them structurally addresses
problems of prolonging joblessness within rural and urban areas (Wire,
2017). Further, there is a huge gap between the self-employed and those
employed in the formal economy and a similar trend will only worsen the
state of joblessness.
Global experience (Garikai 2011, Baptista et
al, 2005; Stel & Suddle, 2005), innovation (e.g. Fritsch & Mueller,
2005), corroborates that there is a high correlation between the degree
of poverty hunger, unemployment, economic well-being, standard of living
of the citizens of countries and the degree of vibrancy of the
respective country’s SMEs. Local green enterprises are instrumental for
transitioning towards a green and inclusive economy.
As a contribution to the economy and
development, local green enterprises develop economies at the local
level providing job and livelihood opportunity to the lower economic
strata of society. In this way, they play a major role in including the
poor and the marginalised in the mainstream development model. Local
green enterprises (LGEs) bring value addition at the local level, unlike
big businesses, where most of the value addition is at the end of the
value chain. In this way, LGEs help in building the value of shared
prosperity in practice and addressing inequities. LGEs are also the key
ingredient for building resilience of development models. Clusters of
small businesses build more diverse economic models versus big
businesses. This is critical in building resilience of the system. In
case of any shock, diversity in economic models ensures that there are
recovery mechanisms to prevent total loss from the shock. Further, the
most vulnerable group to climate change are the poor and the
marginalised. Local green enterprises are usually enhancing their living
conditions through better livelihood opportunities and thus enhancing
resilience of local communities.
There are many cases from across the world
that corroborates their role in providing poverty solutions, environment
solutions and building a more resilient development model. According to
EU, Micro, Small and Medium-sized enterprises are socially and
economically important, since they represent 99% of all enterprises in
the EU. They provide around 90 million jobs and contribute to
entrepreneurship and innovation. In Netherlands, SMEs account for 98.8%
of all private sector companies, contribute 31.6% to Gross Domestic
Product (GDP) and employ 55% of the total workforce. At present, there
are more than 10 million SMEs comprising 99 per cent of the total number
of enterprises in China, contributing to 60 per cent of industrial
output volume and 40 per cent of the total taxes and profits realised by
enterprises in China. MSMEs account for about 91% of the formal business
entities in South Africa, contributing to 55% of GDP, providing almost
60% of employment.
More prosperous nations involved state
intervention in the form of higher investments in education (as a
variable in human capital) linked with industrial demand over the long
term, while allowing their employment base to expand with development of
entrepreneurial capabilities and job opportunities amongst its people.
This was complimented with procedural ease in setting up enterprises
within organised sectors (Wire, 2017).
Policy shifts to move from Job-seekers to
Job-creators: Investing in local green enterprises
Following are some policy levers that can
support to build our economy such that it creates decent jobs, while
working in the safe operating space of ecology:
Indian economy should determine the choice
of investments in sectors that creates decent, well-paid jobs in the
country. Choice of technology and scale should add to the current jobs
or enhance the experience of jobs in the current sector, rather than
replacing the jobs with capital investments. In the era where Artificial
Intelligence is trending as the next revolution in the economy, it is
very critical for India to define its principles of use of such
LGEs, especially manufacturing sector
enterprises are particularly resource intensive and emit high quantum of
pollution and carbon emissions. For India to fulfill her international
commitments (Nationally Determined Contributions, Sustainable
Development Goals), it is of high importance to invest in greening the
current MSMEs and promoting green in future. On the other hand, India
needs to identify economic sectors where there is a huge need and a high
potential to set up LGEs. Some such upcoming sectors include waste,
eco-tourism, decentralised renewable energy, organic agriculture-based
Rural entrepreneurship in the country
provides triple benefits of poverty eradication, economic and livelihood
resilience, and provision of (basic) goods and services to the rural
population in the country. It is therefore critical for Government of
India to incentivise set up and sustenance of such local enterprises in
rural India. Currently it holds a portfolio of INR 2.32 billion (ASPIRE)
of the total INR 65 billion budget for MSMEs. There is limited attention
to providing ecosystem for greening the MSMEs in the Union Budget 2018.
As a long-term measure, India needs to boost
entrepreneurial instincts within the young demographic base and
substantially invest in human capital via education systems and other
knowledge and skill development initiatives. This will compliment the
boost to LGEs and enable ecosystem for youth to aspire to be
job-creators rather than job seekers. ■
Anshul S Bhamra
Amitabh, U. (2018, April 2). Jobless growth a myth, not possible for
India to grow at 7.3% with decelerating labour. Retrieved May 18, 2018,
from Print: https://theprint.in/opinion/jobless-growth-myth-india-grow-decelerating-labour/46044/
Gopalan, R. (2017, December 19). India’s jobless growth is a myth.
Retrieved May 18, 2018, from Live Mint: https://www.livemint.com/Opinion/vq9GUtDmIQfoQnKHOSvnGK/Indias-jobless-growth-is-a-myth.html
Vyas, M. (2018, January 9). India’s jobless growth is not a myth.
Retrieved May 18, 2018, from Live Mint: https://www.livemint.com/Opinion/oIfsn1Djr4KpR1mNNe1zDN/Indias-jobless-growth-is-not-a-myth.html
Back to Contents