The central goal for our nation today has to be to create sustainable livelihoods. Large numbers of sustainable livelihoods. To close the unemployment gap by the year 2010, India will need to create more than 12 million, perhaps more than 15 million, off farm jobs- each year. The “Modern” formal sector is not capable of creating this many workplaces. Its capital costs are too high and its generation periods are too long. Besides, its technology is specifically designed to replace labours by machines, to decreate jobs not to create them. With continued emphasis on large industries, we can not but expect the numbers of unemployed to grow over time. There are, of course, sectors for which the economies of scale only work with large mechanized units. These probably include steel making, oil refining and automobile manufacture. But the economies of most industries can be commercially viable even at quite small scales. If the full costs of the processes and resources used in the manufacturing and delivering products in taking into account, and no subsidies are allowed for energy, transportation, financial and other services, small scale production can become positively competitive. In any case, only small and micro enterprises can do the job that needs to be done on the job fronts. What is more, they can also accelerate economic growth, not only at the local level but also for the nation as a whole. Their return on investment is usually much higher than for a large industry and, needing only small amounts of capital for each unit, they can proliferate much faster. Many of the technologies that are needed for such enterprises already exist. So do the markets for these products. What prevents such enterprises from being set up and becoming profitable lack of capital, infrastructure and the marketing channels needed. Much more public investment is needed to provide these, but probably not nearly as much as is being made today for the benefits for urban areas or for large industries. Currently, finance is easily available to large enterprises that have capital requirement of 20 lakh or more. Also freely available (though not always accessible) is finance for household and micro industries that need capital of less than Rs20,000. For enterprises to be profitable and sustainable in the longer term, they need to set up basic production and marketing facilites which cannot be done without a basic minimum investment. There are innumerable technology based micro industries that could be set up today and run profitably which require capital in the range of Rs.20,000 and 20 lakhs. Such enterprises can usually create, directly several workplaces, each at a cost of less than Rs20,000 and a similar number of upstream or downstream jobs at an even lower cost. Such workplaces, in the villages or small town, yield incomes for workers whose purchasing power is comparable to, if not better than, those created at a hundred times the cost in large urban industries. There is virtually no source of funding today that can actually deliver financial credit in the intermediate range where it has greatest potential impact, both on the generation of employment and on the national economy. It is for this reason that we have given our full and active support to setting up the India Micro Industries Development Fund (IMEDF) which aims to fill this gap. We are gratified and reassured by the interest this fund was evoked among international donor agencies as well as the in the Indian corporate sector who have quickly understood its inherent viability and the self evident need for it. We can only hope that government agencies and public financial institutions will see this as a worthwhile opportunity to invest in the future of our country. |
||||
|
||||