India has a wage problem, not job problem: Former Infosys CFO Mohandas Pai

Former Infosys CFO and multi-sector investor T V Mohandas Pai has said "India does not face a job problem, but one of wages, as a lot of low paid jobs being created do not find favor with degree holders."

"India is not producing good jobs, but creating a lot of Rs 10,000-Rs 15,000 low-paid jobs which are not fancied by degree holders. India has a wage problem, not a job problem," he told a media publicaton. 

Also, India has regional and geographical problems, Pai said. Pai suggested that India adopt the Chinese model of opening up labour-intensive industries and building infrastructure near coasts, besides investing heavily in hitech R&D to meet the aspirations of job-seekers.

"We should look at what China has done. They first opened up the labour intensive industry - invited the rest of the world to come and use its labour and started an export industry. We have not incentivised labour intensive industries. We don't have proper policies, so we cannot use our surplus labour," he said.

Pai pointed out that China has also invested heavily in hitech Research and Development in many areas, including electronic assembly and chip creation, by incentivising at lower level to create an eco-system.

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"Thirdly, China built infrastructure near the coasts so that infrastructure and supply chain comes down. We have not built infrastructure around the coasts," he said. Pai said the data on unemployment put out by the Centre for Monitoring Indian Economy (CMIE) that 11 million jobs were lost in 2018 was erroneous.

"There are flaws in the survey methodology for unemployment for the age group of 15 to 29 years," he said. Pai said the best data on jobs was the EPFO payroll data, which says 60 to 70 lakh people get formal jobs every year.

Even vehicle sales throw light on the job situation in India, Pai said, adding that every year 30 to 35 lakh people get jobs after discounting vehicle purchases.

"For example, India buys about seven lakh tractors, six lakh autorikshaws, seven-and-a--half lakh trucks every year. As many as 28 lakh cars are bought, of which five lakh may require drivers. The drivers create 30 to 35 lakh jobs every year," he said.