A bottom-up approach is essential to prevent jobless growth in India

05 November 2018 Consultancy.in 4 min. read
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At the current rate of growth in the country’s GDP, India risks what is termed as ‘jobless growth’ in a new report from PwC’s strategy consulting arm Strategy&. The firm recommends a bottom up approach, wherein concerted efforts should be made to promote employment in rural areas. 

India is among the fastest growing economies on the globe, which has led experts to make various projections about its future position in the global economy. Some suggest that India’s level of economic integration with its neighbours will position it as a driver of regional growth in Asia.

Big Four accounting and advisory firm PwC has suggested that the current rate of economic growth will position India as the second largest economy in the world by 2050, behind only China. Nevertheless, failing to ensure that this growth takes place in equitable fashion could have adverse economic consequences.

Jobless growth in India

The firm’s strategy division Strategy& has now released a report that details how a large portion of the country’s wealth and prosperity is concentrated amongst very small sections of the population, while other segments continue to struggle against unemployment and other economic barriers.

PwC itself has begun to engage in concerted efforts to solve this issue of unemployment, not least through its comprehensive Nagarik strategy. “Nagarik is a platform that addresses this challenge as a strategic opportunity,” says the new report. At its core, the firm lays emphasis on promoting growth at the grassroot level.

To this end, Nagarik is focused in the smaller regions of the country with relatively low economic output. The majority of India’s population is situated in rural areas, which indicates tremendous economic potential, given that these regions have rampant unemployment levels.

Nagarik focus states

Employment generation at this level will, according to the report, establish a strong economic base to support the country’s rapidly expanding urban business environment. Specifically, the programme allows for a nuanced approach wherein the existing skills at the rural level can be capitalised upon.

Based on this principle, “Nagarik solutions have their basis in the existing traditional strengths of the state in agriculture, self-enterprise, and its social and cultural heritage – namely local capabilities,” says the report. The specific regions of operation are the states of Uttar Pradesh, Madhya Pradesh, Chhatisgarh, Rajasthan, Jharkhand, Maharashtra, Odish, West Bengal, Bihar and Assam.

The selection of these states is motivated by the fact that these regions account for nearly two-thirds of the country’s population and will consequently have the highest demand and potential for employment in coming decades. These states also constitute the majority of rural to urban immigrants in India, which is another issue that causes overcrowding and strain on urban resources in the country.

Key principles of Nagarik

The end goal of Nagarik is primarily the connection of the rural economy to the urban market and subsequently to the international economy. To this end, the programme will focus on mechanisms of integration and the development of long-term capabilities in the specific regional areas of strength.

The firm expects the programme to not only help with India’s issues of unemployment, but also to bring about a shift in attitudes towards citizens across the country. Rather than the traditional perception as consumers, the firm recommends perceiving the vast pool of Indian citizens as a valuable asset.

Nevertheless, the firm expects implementation of the programme to have its own share of challenges. “Any solution to employment generation that is located in our smaller districts will have its own challenges. The challenges in implementation relate to bringing together a diverse set of stakeholders who add value to the local product or service; connecting entrepreneurs; securing financial partners; and finding a market connect as well as satisfying the requirements of stakeholders at the district and state level to create infrastructure and provide subsidies if needed, says the report.