Using our exports as tool to create jobs, more jobs

While software, IT services and BPOs have grown tremendously, this is not enough for a country of India’s size and the diverse composition of its youth. The biggest challenge that India faces today is to generate employment for its huge labour force of unskilled or low-skilled workers, whom the services revolution has not been able to absorb.

We need a ‘manufacturing revolution’ in parallel with the ‘services revolution’ to be able to respond adequately to the massive challenge of employment generation and alleviation of poverty.

Exports represent the incremental production that is not absorbed in the domestic economy. To that extent it represents the potential for greater economic activity. Export growth leads to higher employment.

The experience of countries like China, Malaysia, Thailand and others is particularly relevant in this context. They have successfully built up export oriented manufacturing industries to create job opportunities on a massive scale.

Nearer home, there have been numerous individual instances of exports creating income and wealth. There is the instance of the sudden transformation in the lives of women in a remote village of Gujarat brought about by a huge export order procured online for ties with ethnic design. There is the interesting case of Chanderi fabric and how a UNIDO-McKinsey marketing strategy for the fabric has changed the lives of 24,000 Chanderi weavers. Clearly, such instances can be multiplied manifold to demonstrate the positive impact of trade on job creation.

Given that India is still predominantly an agrarian economy with over 600 million people dependent on agriculture for their livelihood, agriculture has tremendous potential to bring prosperity to our people. It also has the largest potential for increasing employment in some of the poorest regions of our country. We are the largest producers of fruits, vegetables and milk in the world, and yet 40 per cent of our agricultural produce rots. We more or less meet our domestic food needs, but the real boom can be had through exports. If we can tap the export potential of this crucial sector through developing cold chains, food processing and food packaging industries, we can literally provide tens of millions of jobs in the rural areas.

Indeed, no empowerment is possible in India without empowerment of the Indian farmer—in fact, the entire Agri sector. My Ministry is pursuing the development and upholding of farmers’ rights, at the national and international fora, to ensure that the Indian farmer takes his proper place in the country’s national development, and in international trade. Focus is also on Agri Export Zones to ensure that the fruits of a buoyant economy accrue to the farmer, through local and foreign trade.

In divesting itself of powers, the State has ensured that at different levels of self-governance, the people are able to manage their innate abilities and resources better with a fresh and generative understanding between the people and the administration. Even the non-agro, rural based economy of the village artisan has received due attention. Bharat Nirman is an ambitious yet pragmatic effort towards this end. Handicrafts and other cottage industries are being reorganized to create an export strategy that would benefit the country’s village craftsmen. Our cottage industries in backward and rural regions will, not only become self-sufficient, but they have an enormous potential to become one of the country’s leading export sectors, with their exquisite workmanship, which fascinates the western and eastern mind.

My Ministry commissioned a study on Employment-Oriented Export Strategy. The report submitted by RIS (Research & Information System for developing countries) in June 2005 showed that the 26 per cent increase in exports in 2004-05 (from 63 billion dollars to 80 billion dollars) created 1 million additional jobs.

This pioneering report highlights the vast opportunities for expanding exports as well as employment that remain untapped. When we achieve the US $150 billion target for exports (set for 2010, but which I hope we can reach earlier) we will have created ten million new jobs in manufacturing and ancillary areas such as transportation, accounting and trading.

India empowered is the empowerment of the individual in all its core sectors. It is the power that comes from the nation’s youth with its unquenchable thirst for knowledge, energy for success and the will to achieve. India empowered is the strengthening of each sector that our economy, and health as a nation depends upon.

In conclusion, I need to reiterate that India as a fast developing economy is harnessing its potentialities and empowering its multitudes through education, employment and economic growth of its agri and rural sectors, by a planned and judicious disempowerment of the state and the empowerment of India. As we make India an international trading and manufacturing hub, we can trade our way out of poverty as some of our Asian neighbours have successfully done. And as this metamorphosis reaches its acme, the country will have collectively responded to the call for the restoration of the nation’s pride of place in the world hierarchy.