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Budget 2017: Services Will Create More Jobs Than Manufacturing, Says Biocon Chief

Biocon’s Kiran Mazumdar-Saw says IT will be an enabler, not creator, of million of jobs



A man reads a newspaper outside Chhatrapati Shivaji Terminal in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)
A man reads a newspaper outside Chhatrapati Shivaji Terminal in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

"We have to stop kidding ourselves that manufacturing will create jobs in large numbers," says Kiran Mazumdar-Shaw, chairman and managing director of Biocon Ltd. In a free-wheeling chat about the economy and Budget 2017, Shaw says creating new jobs is the biggest economic challenge facing India's policymakers today. Edited excerpts.

Do you think the government has achieved the goal of creating enough new jobs in the economy?

I think this is a huge challenge for our economy. We keep talking about jobs and I don’t think there is enough thought going into what is going to happen to us as an economy over the next 10-20 years. I think we really need to focus on where the jobs are going to be created in the next 10 years. And, I am afraid, there is not enough focus on what kind of jobs are we going to create.

It is very sad that wherever we talk about jobs, everyone only thinks about IT jobs. They are not going to create the 15 million jobs that we are talking about.

But yet, I think IT does have a very big role to play in creating more jobs. They are going to be enablers, not necessarily creators of those millions of jobs. For creating those jobs, you have to look at aspects of skilling capabilities.

You recently said ‘we are in a period of jobless growth’. Will the policy thrust on manufacturing create a large number of jobs?

Manufacturing today is about automation. So you are not going to be able to create those huge numbers of jobs.

Yes, I think manufacturing as an economic opportunity for India is very large, but not necessarily for large job creation. 

We have to get real about this. And even if there are labour-intensive manufacturing jobs, we have to see what kinds of sectors can do that.

I don’t think we have done a proper mapping of our manufacturing sector and our skills. It’s a daunting task. I believe we can create those jobs if we map these requirements properly and stop kidding ourselves that these jobs are going to come from manufacturing.

So where are the new jobs going to come from?

Today, 55 percent of our jobs are from the agricultural sector. But these are poor productivity jobs, and many of them are subsistence jobs. We have to take them from farm to non-farm and focus on semi-skilled opportunities in the services sector.

I think services are actually going to create a larger number of jobs than manufacturing. 

But, having said that, I think jobs of the future are going to be very different from the jobs of the past.

Will labour reforms help in new job creation?

I think someone needs to give us the right data of how many jobs does unionized labor actually contribute to the economy. I really want to get that data properly because unless we really have real numbers, we are not addressing the problem. Yes, I think we need labor reforms. I think people need to focus on becoming more productive and accept the fact that labor-intensive manufacturing is going to be displaced by automation. What are we going to do with the displaced labor is the question.

Your budget expectations? Will there be a cash transfer or a stimulus?

I certainly believe that there will be a direct cash transfer to Jan Dhan Yojana account holders. I also believe there’s going to be an approach to reducing tax rates. There should be emphasis on relieving agricultural stress. I hope there is a greater investment in health care and science and technology. I would like to see this government being far more visionary for India to become the world leader in science and technology. We have everything it takes but we are under-invested. It is pathetic to see the kind of approach and the mindset the government has in building capacity in science and technology. And you know I am shouting myself hoarse to get the government invest in what will create global leadership.