1st December 2022

Confidant Classes

Competitors' very first choice

Home | Edu NEWS | Indian Job Conundrum

Indian Job Conundrum

All countries see real progress when they create jobs. This happens when small and medium-sized businesses grow and create jobs at the same time. India, over the years, has faced the problem of lack of support. There are not enough medium-sized companies operating in the country.

How are job creation and company size related?

McKinsey Global Institute (MGI), in a recent report titled India’s Tipping Point: An Economic Agenda to Stimulate Growth and Jobs, notes that India has around 600 large companies with revenues of more than $ 500 million dollars per year.

  • The labor productivity of these companies is 11 times higher than that of the economy in general.
  • These companies are also responsible for 40% of exports and employ 20% of the direct formal workforce.
  • But there are not enough companies of this type. India has fewer large companies relative to gross domestic product (GDP) than China, Malaysia, South Korea, and Thailand.

Why does India have fewer large companies?

In 2018, the revenues of large Indian companies accounted for 48% of nominal GDP. The contribution of large companies from other emerging economies such as China, Malaysia and Thailand was 1.5 to 1.6 times that of India. There are not enough large companies in India due to the lack of medium and medium-sized companies. It is the midsize companies that become large companies and create jobs and competition along the way. As MGI points out: “India’s 1,500 midsize companies with a trillion dollars of GDP, with revenues between 40 and 500 million dollars, are only half the number of similar emerging economies compared to their GDP.”

Does the slow growth of the body have something to do with this?

In 2012, the revenues of large companies in India amounted to around 58% of GDP. In 2018, that figure fell to 48% of GDP. This weak business growth resulted in slow economic growth and a situation where only 77 midsize companies went big between 2012 and 2018. By comparison, 93 midsize companies went big between 2008 and 2012.

Why can’t midsize companies grow?

In large part, there are two reasons for this. The first is the high cost of compliance in India. Small and medium-sized companies lack “organizational resources to handle costly procedures … compared to large companies,” as the MGI report notes. It takes 1,445 days to fulfill a contract in India. In South Korea, it takes 290 days. So, Indian companies are not growing. Second, the lack of access to low-cost capital prevents companies from growing. This problem can be solved by deepening the financial markets of India.

What steps should be taken to solve this problem?

India needs to triple the size of its large companies by 2030. This can happen if more than 1,000 medium-sized businesses and 10,000 small businesses can scale, creating millions of jobs. This requires unlocking the land supply and allowing prices to fall by 20-25%, creating flexible labor markets, privatizing the 30 largest USP companies, distributing energy efficiently, improving performance by conducting specific business and sector policies to improve the productivity.

AILET 2023 Application Process Begins

AILET 2023 Application Process Begins

National Law University-Delhi NLU-Delhi will hold the AILET 2023 exam on December 11, 11:00 a.m. to 5:00 p.m. m. to…
Read More
All India Bar Examination 17 Syllabus and other details

All India Bar Examination 17 Syllabus and other details

AIBE 17 exam: Nearly one lakh candidates will take the AIBE exam this year, which will be held at 150…
Read More
AIBE 17 will take place in 3 months: BCI informs the Supreme Court

AIBE 17 will take place in 3 months: BCI informs the Supreme Court

Bar Council of India informed the Supreme Court that the syllabus for the upcoming All India Bar Examination 17 (AIBE17)…
Read More
Registration for CLAT 2023 will begin on August 8

Registration for CLAT 2023 will begin on August 8

CLAT 2023 will be held offline on December 18. Applicants can complete the online application form at consortiumofnlus.ac.in. CLAT 2023:…
Read More
AP LAWCET 2022 Results Declared

AP LAWCET 2022 Results Declared

Confidant-Classes-Judiciary AP LAWCET 2022 Results: Candidates who sat for the AP Common Entrance Test (AP LAWCET 2022) will now be…
Read More
Law graduates not practising since more than 5 years, must retake AIBE: BCI tells the Supreme Court

Law graduates not practising since more than 5 years, must retake AIBE: BCI tells the Supreme Court

The BCI has ruled that if a lawyer accepts a job not related to legal or judicial matters, then that…
Read More
Careers after Law

Careers after Law

Law has become the most common option in India at the moment. It has evolved and grown tremendously over time….
Read More
DU LLB Entrance Exam 2022 decoded

DU LLB Entrance Exam 2022 decoded

The University of Delhi will conduct the entrance exam of DU LLB 2O22 tentatively in next month. The university had…
Read More
UG-CLAT 2023 Exam Pattern

UG-CLAT 2023 Exam Pattern

The UG-CLAT 2023 would focus on the assessment of the candidates’ comprehension and reasoning abilities and skills. In general, it…
Read More
70-Year-Old Fortunate to Complete LLM | University of Delhi Centenary Chance Initiative

70-Year-Old Fortunate to Complete LLM | University of Delhi Centenary Chance Initiative

Under the University of Delhi’s Centenary Chance initiative, a 70-year-old man is given the chance to complete his LLM after…
Read More

About Post Author

error

Enjoy this? Please spread the word :)