Piyush Goyal says job losses is a good sign for economy, here's a reality check
ECONOMICTIMES.COM|
Oct 07, 2017, 02.50 PM IST
At the World Economic Forum’s India Economic Summit a few days ago, Railway Minister Piyush Goyal made an unusual comment. He said job losses is a very good sign for the economy. When all of the country is anxious about job losses in the private sector it was odd for a minister to be happy about it.
Piyush was responding to Bharti Airtel chairman Sunil Mittal who had mentioned India’s top 200 companies considerably cutting jobs over the past few years. “If these top 200 companies are not going to generate jobs, it’s going to get harder and harder for the whole business community to pull society along with it,” Mittal said.
Of course, Goyal was not taking pleasure in the pain of the unemployed youth. Why he saw job losses as a good sign was because he saw the youth getting self-employed.
"What Sunil just spoke about companies bringing down their employment is a very good sign, in fact. The fact is that today, the youth of tomorrow is not looking to be a job seeker alone. He wants to be a job creator. The country today is seeing more and more young people wanting to be entrepreneurs,” he said.
Perhaps, Goyal was referring to the MUDRA scheme, which was launched by Prime Minister Narendra Modi in 2015 to provide loans to small entrepreneurs. So far, Rs 3.42 lakh crore loan has been disbursed to over 8 crore people under the scheme, mostly small entrepreneurs, a report by SKOCH said.
But is it right to assume that those who lose jobs get loans and start small businesses?
Last year, Larsen & Toubro (L&T) laid off about 14,000 employees. In the first quarter of this calendar year, HDFC Bank’s headcount went came down from 90,421 to 84,325. In the preceding quarter last year, the headcount was down by 4,581. 67 textile units shut down in the last few years, hitting 17,600 employees.
Can we assume that these employees turned entrepreneurs?
Goyal explained why self-employment is rising. “With the advent of 3D manufacturing, artificial intelligence, with innovation playing a central role, more and more people are getting engaged on their own, and are looking to become franchisees, people who come up with ideas and want to be independent,” he said.
It's hard to imagine that those laid off by L&T or Infosys would become franchisees. Talking of 3D manufacturing and artificial intelligence in India, where certain areas even go without smartphones, is premature.
And if you consider the fact that startup sector saw a meltdown last year and this year the deal volume is down even though the funding has grown, you would realise Goyal's statement is futuristic and did not service to the hordes of unemployed and laid off youth.
Piyush was responding to Bharti Airtel chairman Sunil Mittal who had mentioned India’s top 200 companies considerably cutting jobs over the past few years. “If these top 200 companies are not going to generate jobs, it’s going to get harder and harder for the whole business community to pull society along with it,” Mittal said.
Of course, Goyal was not taking pleasure in the pain of the unemployed youth. Why he saw job losses as a good sign was because he saw the youth getting self-employed.
"What Sunil just spoke about companies bringing down their employment is a very good sign, in fact. The fact is that today, the youth of tomorrow is not looking to be a job seeker alone. He wants to be a job creator. The country today is seeing more and more young people wanting to be entrepreneurs,” he said.
Perhaps, Goyal was referring to the MUDRA scheme, which was launched by Prime Minister Narendra Modi in 2015 to provide loans to small entrepreneurs. So far, Rs 3.42 lakh crore loan has been disbursed to over 8 crore people under the scheme, mostly small entrepreneurs, a report by SKOCH said.
But is it right to assume that those who lose jobs get loans and start small businesses?
Last year, Larsen & Toubro (L&T) laid off about 14,000 employees. In the first quarter of this calendar year, HDFC Bank’s headcount went came down from 90,421 to 84,325. In the preceding quarter last year, the headcount was down by 4,581. 67 textile units shut down in the last few years, hitting 17,600 employees.
Can we assume that these employees turned entrepreneurs?
Goyal explained why self-employment is rising. “With the advent of 3D manufacturing, artificial intelligence, with innovation playing a central role, more and more people are getting engaged on their own, and are looking to become franchisees, people who come up with ideas and want to be independent,” he said.
It's hard to imagine that those laid off by L&T or Infosys would become franchisees. Talking of 3D manufacturing and artificial intelligence in India, where certain areas even go without smartphones, is premature.
And if you consider the fact that startup sector saw a meltdown last year and this year the deal volume is down even though the funding has grown, you would realise Goyal's statement is futuristic and did not service to the hordes of unemployed and laid off youth.
