December 4, 2020

iPods and jobs: Economic Survey proposes ‘Assemble in India’


As BJP-led government prepares to present its first Budget in its second stint, job creation will be on top of its mind. According to the Economic Survey presented on Friday, the government dedicated an entire chapter on `Creating Jobs and Growth by Specializing to Exports in Network Products.`

India wants to project itself as the world`s assembly hub to create jobs the easy way. Since it has China as its biggest competitor, India has to offer a better deal to companies. So what does the government propose to do? Integrate `Assemble in India for the world` into `Make in India`.

“By integrating `Assemble in India for the world` into Make in India, India can create 4 crore well-paid jobs by 2025 and 8 crore by 2030. Exports of network products, which is expected to equal $7 trillion worldwide in 2025, can contribute a quarter of the increase in value-added for the $5 trillion economy by 2025,” reads the opening statement.

Citing that between 2001-2006, labour-intensive exports helped China to create 70 million jobs for workers with basic primary education, India hopes to emulate the same.

But why does India think corporations who have invested in China will choose India over it? The US-China trade war, the government believes, is causing major adjustments in global value chains. It suspects firms are now looking for alternative locations for their operations. India hopes to be that destination with large workforce.

Citing Apple as an example, the Economic Survey read, “China assembled almost all of the 54.83 million iPods that Apple sold, which led to aggregate domestic value added of $219 million… iPod and iPhone are just two examples. There are thousands of such products, where China has emerged as an assembly centre.”

Talking about the way forward, the survey says, “The experience of countries that have achieved rapid and sustained export growth suggests that India can reap rich dividends by adopting policies aimed at strengthening its involvement in the export market for network products (NP). Given our vast manpower with relatively low skill, India`s current strength lies primarily in assembly of NP.”

when Apple employed 7,00,000 factory workers in China, it also employed 30,000 engineers on-site to supervise those workers. India hopes to create an eco system of jobs with its “Assemble in India”.

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How vigorously the government will move on it and how conducive Indian job market is, given the history of trade unions, is something the government will have to factor in. But for now, job creation is not just an economic necessity for the government, but it is also a political compulsion.

 





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