As India looks to grow at over 7% in the next two years, it will have to focus on sectors like tourism, retail, textile, leather and construction to create more jobs, said Richard Rekhy, Chief Executive Officer of KPMG India.
As per government data, only 1,35,000 jobs were created till October last year (for which latest data is available).
“That is one area where India has severely lagged. Not just in the last two years, but in the last 7-8 years. The country has had a very bad track record when we link GDP growth to job creation”, said Rekhy during his visit to the city .
The main reason for this situation and the solution thereof, he said, is with the “much ignored” micro, small and medium enterprises (MSMEs) segment.
“The maximum jobs are created in MSME sector and that sector has been neglected. They have been crying in wildnerness for help and support,” Rekhy said, adding, “For MSMEs to succeed, they need capital, they need technology (which they cannot afford) and they need R&D (which again they cannot afford), which have been lacking. If you create a cluster-based approach, if you are putting up an R&D centre from the government side and give them funding support, it can help.”
MSMEs in India are estimated to account for 45% of manufacturing output (in terms of value) and 40% of the total exports. The sector employs about six crore people.
One more sector that has been ignored, he said, is the country’s arts and crafts sector.
“Majority of the arts and crafts in India are dying because of inadequate attention,” he said.
Rekhy said there are a lot of positives that have come about as a result of policy changes like opening up of foreign direct investment in different sectors, passage of goods and services tax bill, actual change on ground will take about 2-3 years more.
“There are two things that are required when a transformation is happening in a company or a country. The first is for the leader to put out the vision. Here the PM has laid out the vision of where he wants to take the country . Like in most cases, the regulations and the rules that go with this take some time to formulate. And they are getting done. A lot of that backroom work is happening. The bureaucracy is not moving at the same pace. We will see some of this getting played out in the next 2-3 years,” he added.
