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Sunday 5 November 2017

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Who Will Create Jobs ?

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Certainly , not BIG companies !

Here is the proof :

Economic Times ( 03 Nov ) carries following news report :

“ Big Cos Not So Big On Job Creation “

For instance, the gross block of top 10 large companies, such as L&T, BHEL and Indian Oil, rose 8.6 % a year since 2008 , but headcount increased at just 0.5 % a year

The average manpower growth at Manufacturing companies included in the BSE 500 was 2.88 % a year , with more additions at smaller companies

To validate , just take any BIG company’s Annual Report

Find out

( A )…… “ No of Employees “

( B )…… “ Total Capital ( Fixed + Working ) Employed “

Divide….. B / A

You will come up with a figure of Rs ONE CRORE or more !

India adds ONE MILLION ( 10 lakh ) persons per month to its workforce ( 12 Million / year )

Let us “ desire “ that , out of this 10 lakh , BIG companies should provide jobs to just 1 lakh persons

That means , BIG companies would need to put in Rs ONE lakh*crore worth of CAPITAL ( Fixed + Working ) , EVERY MONTH !

Even if market demand keeps GROWING for their “ Products / Services “ [ month after month ] , who has that kind of money ? ( Remember , even the fastest growing markets for any product / service is no more than 1 % per month ! )

And putting up large / organized sector businesses , take years – especially , factories !

So , what should be the government’s focus as far as job creation is concerned ?

It should be “ Self Employed “ sector , at the “ Bottom of the Pyramid “ !

Obviously , it is not practical to increase the number of “ Licensed Hawkers “ in Mumbai , from ONE LAKH to TEN LAKH , without bringing all traffic ( pedestrian and vehicular ), to a complete stop

But we must find a way to enable ONE MILLION ( 10 lakh ) flat / hut owners to carry on business from their homes / residences , by simply registering as “ Self Employed from Home “ , as long as such business / industry / service is non-hazardous ( air pollution – noise pollution – chemical effluent – explosives – harmful radiation – vending of banned items – delivering of banned services etc )

To understand why , read :

How Much Capital Required to Create One Job ?

https://myblogepage.blogspot.in/2017/06/how-much-capital-to-create-one-job.html

Capital Goods Policy : Some Questions

https://myblogepage.blogspot.in/2016/05/capital-goods-policy-some-questions.html