I am not an economist. But I don't have to be one to know to be one to know that there is something horribly skewed with the Indian economy. About 60 percent of the country's labour force works in agriculture to produce just 21 percent of national income- GDP. Conversely, survives sector that generates over 50 per cent of the GDP employs only 27 percent of working Indians. The missing link that I am hinting at is the industry. Unlike the services sector, industry can create jobs of the kind that can absorb unemployed and underemployed from agriculture. Industry today has only 17 percent of the labour force on its rolls.
India is either rewriting the laws of economic growth - that say an economy transits from an agricultural one to being industrial before becoming services-driven-or it is doing something fundamentally wrong. In China, 70 per cent of the workforce is employed in agriculture and only 30 per cent is with industry and services.
That's tragic because it's India, and not china, which claims to be an emerging knowledge superpower. In a knowledge economy, it's the people and the people's skills, what experts call employability, that determine success. For companies in such an economy, their talent pool becomes the most valuable asset, more valuable than capital, land or machines. We all knew India has the world's largest pool of 'skilled' manpower.Ironically we were wrong. It took two years of sustained job growth to blow this myth. India's workforce is large but not skilled. In a McKinsey surveys, 81 per cent of the executives polled said the biggest challenge to growth was not infrastructure or poor governance but scarcity of talent. That's a dubious distinction for the world's second most populous and the youngest country. Obviously, we desperately need to fix our education system.
That's bad news for companies and the country. But for today's job seekers it's the most heartening news. Today companies using innovative ways to overcome the shortage of skills and going beyond the metros to hunt for talent. I always felt much of India's economic progress has been despite the government. It seems much of employment growth will also take place without any significant help from the government.
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