Job Market is Dull But May Revive Soon

Anil Khaitan, Chairman of SNK Corp, took over as the president of PHD Chamber of Commerce and Industry in October , this year. He shared his views on Indian economy and its impact on the job market with Business world People’s Aradhana.

Two major agencies namely Moody’s Investor Services and S&P have provided two different ratings outlook for India, one being cautious and other stating positive outlook for the country. How do you interpret this?

The Moody’s Investors Service has upgraded India’s sovereign credit rating from Baa3 to Baa2 after a gap of 13 years while the S&P has maintained status quo at BBB-. However, both the agencies have divergent ratings for the economy, their views on India’s growth story remains positive as both expect the economy to grow at a higher trajectory in the next financial year. Further, both S&P and Moody’s have appreciated the structural reforms initiated by the government and both have suggested that the government should address other critical structural issues in the coming times.

Finance Minister Arun Jaitley recently said that India is passing through a stage, which will be recognized as a phase of fast formalization of the economy. What is your view on this?

I totally concur with this view and believe that we are living in the most dynamic times when the government has been initiating several reforms in diverse fields to formalize economy and at the same time bring about an all inclusive growth in the country. What is needed now is the acceptance and openness to such dynamic changes and embraces it with full vigor and enthusiasm.

Job market is dull, when it will revive. Which will be the fastest growing sector?

The present economic structure in itself is a major reason why there is huge unemployment in the economy. The shift from agriculture to services directly has resulted in shift of labor force to skilled jobs due to which the manufacturing sector also suffered and people were not able to find jobs in services sector due to mismatch of skills possessed and skills needed. The low growth in the manufacturing sector coupled with the decline in growth of services sector from 9.7 percent in Financial year 16 to 7.7 percent in Financial year 17 is the reasons why job market is dull. In the coming quarters, industrial activity is expected to pick up and with the reforms in GST being announced regularly, the services sector is also expected to pick up soon.

What actions should be taken to create jobs in the economy as promised by Narendra Modi – one crore jobs every year?

I believe that job creation is a consequence of creation of new enterprises and expansion of existing enterprises. For encouraging both these initiatives, the government has taken a number of steps ranging from launch of Make in India, Digital India, and Start-up India to launch of smart cities, which is expected to garner huge investments in the economy in the coming times.

Going ahead, it is imperative that the government fast-track reforms in land, labor and access to finance that will encourage entrepreneurship in the economy and at the same time encourage existing enterprises to expand. 

What are the long term effects of the GST on job market? How GST will help?

I believe that GST is going to have a very positive impact on the job market, as it would lead to simplification of taxation, which will facilitate ease of doing business. Thus, more investors will be willing to come to invest in India and entrepreneurs in India will get a boost, which will lead to setting of new enterprises, which will create jobs, going forward.

Demonetization hampered the job market. Do you agree? Market is still slow because of GST and Demon. When the Mojo will be back?

Demonetization has affected the job market significantly, majorly the informal market. The market would revive in the upcoming quarters as the slowdown in the economy due to demonetisation and the teething problems of GST implementation will be bottomed out. In addition, this would revive the lost demand which will improve the overall industrial growth.

How to boost the culture of entrepreneurship?

In order to boost entrepreneurship culture in the country, there is a need to develop the seed of entrepreneurship in the young minds from the beginning i.e. introducing entrepreneurship related programmes and courses in the schools and colleges. Many new ideas are generated but to turn them into reality, there is a need of investments. Therefore, the government should take some additional steps to ensure supply of funds to the new ideas. The government should simplify the process of setting a new business. An effective policy with clearly defined goals is the need of the hour, which will go a long way in establishing entrepreneurship culture in India.

How to create our own Uber, Google and AirBnB kind of models?

The best way to develop business model is to learn from the success stories of the models described in the question such as that of Uber, Google and AirBnb. In addition, it is essential to keep in mind the key objective of your business and the expected outcome before creating any model as this is the basic step of business models created by some big players in the market.

Moody’s has upgraded our outlook. What is your outlook on the economy?

The Indian economy will emerge as the world’s fastest growing economy in the coming years due to the efficient policy measures and reforms being undertaken by the Government to boost the investment environment and trigger overall growth momentum in the coming times.