Emphasising that India should focus on productivity to ensure robust GDP growth, Mastercard president and CEO Ajay Banga cautioned that the country cannot depend on manufacturing alone to create one million jobs a month which it is aspiring for.
“My belief is that what India is trying to do and needs to do more of is democratising productivity. India is all about creating jobs and quality of life. Whether you are a politician or a government employee, private sector person, mother, rich businessman, if you create jobs and you give quality of life that’s all India is speaking about now,” he said on Monday.
The India-born head of the American multinational financial services corporation was addressing the 6th ‘New India Lecture' on the topic ‘The Importance and Impact of a Purpose-driven Business' organised under the aegis of Consul General Ambassador San?deep Chakravorty at the Indian Consulate in New York. The lecture series is organised by the Consulate in partnership with the US-India Strategic Partnership Forum (USISPF).
Voicing concern about India’s over-emphasis on manufacturing to grow its economy and create jobs, Banga said, “You are thinking only about manufacturing today, everything about India is manufacturing. That's where I differ.”
“The manufacturing train is a hard train to get on today because supply chains in the world are getting disrupted, trade barriers are going to create further disruption of the supply chain. Besides, the cost of production in India is much higher than the cost of production elsewhere,” he said.
“It irritates me no end that India does not get the idea that democratising productivity cannot continue to be done with yesterday’s rules. It needs what is going on today plus more. Yes (it needs) goods and services tax (GST), yes demonetisation, yes skill-building” and focussing on other sectors like tourism, the Mastercard CEO said.
Giving the reasons why focus on only manufacturing concerns him, Banga said apart from changes in supply chains and trade barriers, Artificial Intelligence and robotics will create a different manufacturing environment from the one that has existed in the last 30 years.
“India needs to provide a million jobs a month. You cannot create a million jobs a month only from manufacturing. Manufacturing is only one component,” he said.
Banga applauded prime minister Narendra Modi’s focus on digital India, saying digitisation will help in job creation as will focussing on sectors like tourism. “It's going to need to unlock the power of entrepreneurship of women in India. There is progress in some of these areas and in others more energy is needed,” he said.
Speaking passionately about his thoughts on India's future, Banga said the country does not have dearth of labour but has low productivity. He stressed that GDP growth does not depend on labour growth alone.