India’s twin challenges of politics and economics involved two risky experiments in 1947. The political one—votes for everyone—has worked out spectacularly, with India creating the world’s largest democracy on the infertile soil of the world’s most hierarchical society. But the economic one—embodied in the Avadi resolution of 1955 where the Congress session adopted a socialist economic path—failed spectacularly because it sabotaged mass prosperity by confiscating the entrepreneurial freedom to create jobs. Consequently, our labour is handicapped without capital and our capital is handicapped without labour. Our unfinished journey from national independence to mass prosperity requires policy innovation at the intersection of jobs and skills. The recent budget has made a great start, but reforms must accelerate.
The Hitopadesha suggestion vidya dadati vinayam (knowledge brings humility) was ignored by knowledgeable romantics, elitists, welfarists, bureaucrats, educationists and trade unionists. Romantics unfairly view private employers as perpetual entities like the government. Elitists think private sector salaries are paid by shareholders rather than customers. Welfarists believe private employment can be substituted by government spending financed by debt. Bureaucrats think statutory employer benefits are financed outside salaries rather than from them. Educationists looked down at skills. And trade unionists believe job preservation is a form of job creation. All six worldviews suffer from inattention to detail; a bird’s rather than a worm’s eye view of the daily life of investors, employers, employees and job-seekers.
The following reforms need to be carried out to remedy the situation.
Jan Vishwas 2.0: The Jan Vishwas Bill removed excessive jail provisions vis-a-vis employer compliances last year by recognising that criminalisation of civil offences hurts small employers, enables corruption and rewards informality. It was a small start—only 113 jail provisions for employers from over 25,000 were removed—and we must now undertake Jan Vishwas 2.0 to eliminate hundreds of needless jail provisions.
Fixing government schools: Smaller class sizes, regular/ adequate teacher salaries and better teacher qualifications have not delivered learning outcomes because they were necessary, but not sufficient. We must urgently fix governance (allocation of decision rights) and performance management (a fear of falling and hope of rising) because government schools are the first rung in the ladder of opportunity.
Reimagining skill development: The challenge of scaling skill development programmes has shifted from curriculum and delivery to financing. Over the last decade, we have learnt five design principles that attract new financing—learning by doing, learning while earning, learning with qualification modularity, learning with flexible delivery and learning with signalling value. The central government is important, but state governments must take the lead in innovation.
Create a national open compliance grid: India’s revolution in payments, identity and vaccination certificates enabled by DPI (Digital Public Infrastructure) has not been replicated in government plumbing. We must replicate this open and stacked architecture by creating a non-profit national compliance corporation that will use a unique enterprise number to house the API/ interface layer for all employer filings, compliance and workflows and enable private sector innovation in straight-through processing for employers.
One labour code: It is impossible for employers to comply with all of India’s labour laws without violating some of them. Increasing our manufacturing jobs needs a single labour code as a powerful signal of our policy intent to protect employees while creating more formal employers.
NEP acceleration: India’s many education policy documents—the 1948 Radhakrishnan report, the 1968 Kothari Committee report and the 1986 National Education policy—were useful but incomplete. NEP 2020 finally gives us a roadmap that breaks down the barriers between education and employability, pushes holistic learning, grants poorna swaraj (complete independence) to universities, expands apprenticeships, and much else. Unfortunately, the NEP’s glide path for implementation was 15 years for consensus-building. But the world of work and education are changing fast and we should bring down the implementation of this roadmap to five years.
The Chinese Communist party’s third plenum recently decided to seek “high quality” rather than “high speed” growth. China’s reliance on high debt, high leverage and enormous levels of fixed investment in infrastructure has banged into natural limits unfamiliar to democracies like India. India may not have mass prosperity but we have impressive islands of excellence—exporting more software than Saudi Arabia did oil in 2021, getting $120 billion in remittances from 17 million Indians overseas and being the world’s pharmacy. The arrogance of the Avadi Resolution of 1955 sabotaged mass prosperity. Righting this wrong—our new tryst with destiny—is complementing our political independence with economic freedom.
The author is Co-founder, Teamlease Services
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