India needs to focus on creating jobs that give a reasonable income to tackle the issue of inequality, stated Infosys’ Co-founder N.R. Narayana Murthy. He also emphasized on shifting more people from agriculture, where the per capita GDP income is low, to low-tech manufacturing and services, where the income levels are comparatively better.
Murthy said while addressing a techfest organized by IIT Bombay through a video conferencing, “The only way you can reduce inequality in a country like India is through creation of jobs, and creation of jobs with reasonable income.”
In India, nearly 58 per cent or about 650 million people depend on agriculture, which contributes only 14 per cent to the GDP, he said. So if the per capita income of an Indian is $2,000, those working in agriculture it is hardly $500 per year because these 58 per cent people contribute only 14 per cent of the GDP, said the IT industry veteran.
Murthy further said that this $500 per year translates into around USD 1.5 per day or Rs 100 per day, in which these people have to eat, take care of health, educate their children and pay rent, among others. Hence the way to improve the lot of this is by moving people from agriculture to low-tech services and manufacturing, where, hopefully, they should be able to get them somewhere around $1,500 to $2,000 per year.
The IT veteran added that unfortunately, India has not been successful in doing that because of the poor infrastructure and the fact that state governments do not understand the problems and they have not made the life easier for entrepreneurs to get into low-tech manufacturing and services. He stressed that there is a need to improve agriculture productivity by using more and more technologies and advised the country’s IT companies to focus on innovations to improve, quality, provide better value to customers and encourage their employees to embrace new ideas which will start giving opportunities in the next 10-15 years.
Murthy’s remarks could not be more apt given job creation is an issue that has been plaguing the economy for a while. The latest OECD Economic Survey of India highlights also highlights the same- while India has greatly expanded its participation in global trade in recent years, private investment remains relatively weak, the employment rate has declined amid a shortage of quality jobs, rural incomes are stagnating, and per-capita income varies considerably across states. The Survey sees India’s GDP growth recovering to 6.2% in 2020 and 6.4% in 2021 after dipping to 5.8% in 2019 following several years of robust growth. Given that the nature of jobs is going to change even further, it becomes even more urgent for organizations to create jobs of reasonable income to bridge the inequality gap.