Indians must do this to keep their jobs
In this issue:
» Should one bet on commodity prices for the near term?
» No frills account subsidy to add to fiscal woes
» A telecom major on the brink of bankruptcy
» Poverty levels rise due to food prices
» ...and more!
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No doubt the rises in income levels have been a reflection of overall economic prosperity. Also they have accompanied commensurate rise in labour productivity. But being 2 to 3 times more expensive than their counterparts in Indonesia and Vietnam may soon cost Indian and Chinese blue collared workers their jobs. Now the question here is not whether emerging economies like India should remain cheap manpower destinations. But whether being low cost is the best way to remain employed.
Be it export of software, textiles and gems and jewelry or BPO services to MNCs, the low cost model is unlikely to sustain we believe. It is the value addition in products and services that will help Indians retain employment. Rise in compensations may make Indians more expensive than some labour classes in other parts of the world. But ensuring that most of the labour is skilled and up-skilling the rest is the answer to our woes. Unfortunately the government policies and investments in this direction leave a lot to be desired. Probably it is the private sector that needs to have this in the long term goals to ensure better employment scenario for India.
Do you think private sector investments in skill building can improve the employment scenario for India? Let us know your views on this or post them on our Facebook page.
01:10 | Chart of the day | |
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Note: Market cap as on 15th February 2011
01:50 | ![]() | |
We would tend to agree. We believe that a good amount of Chinese growth in recent times is stimulus driven. And when that stimulus stops, there could be a temporary slowdown in the Chinese economy. This slowdown could in turn impact commodity prices, mostly those of industrial metals. Thus, at the current juncture, it may not be wise to bet the house on commodity prices. Longer term though, the outlook remains as strong as ever. The inflationary scare from the US dollar and continued strong growth of emerging nations would continue to keep the commodities flag flying higher. However, we would like to caution that investing in commodities may not be everyone's cup of tea. Better to stick with one's circle of competence we believe.
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Banks have an ambitious target of opening 50 m such accounts in 73,000 villages by 2012. This subsidy, if given, will cost the government Rs 7 bn, but will at least help banks cover some costs of reaching remote areas. Tying up with the UID scheme will also help banks meet know-your-customer norms and make account opening easier. Having money from rural India flow into the legitimate banking system is definitely good. We just hope that the subsidy helps meet the noble cause of banking the unbanked. And that it reaches the right pockets.
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The company which had an enormous cash balance of Rs 300 bn in 2000 now holds only Rs 50 bn as cash. However, the company's expected losses for this year are expected to be to the tune of Rs 40 bn. If things continue as it is, then it will run out of cash in the next one year itself. Flat revenues but continued higher expenses have been weighing the company down. Coupled with the heavy competition that marks the sector and additional costs involved in the rollout of the 3G services, things don't look too good for this PSU.
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04:45 | Today's investing mantra |
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5 Responses to "Indians must do this to keep their jobs"
Manoj Kumar
Feb 17, 2011Upgrading of skills of employees will help them retain their jobs but it would in now way help increase in employment. Only setting up of new businesses can help generate the newer jobs. Secondly, it is a natural phenomenon that the workforce in a growing economy grows costly and the workforce of lesser developed economies takes up the job of the earlier ones.
VINOD HURIA
Feb 16, 2011"Mathematics is ordinarily considered as producing precise and dependable results; but in the stock market the more elaborate and abstruse the mathematics, the more uncertain and speculative are the conclusions we draw therefrom." - Benjamin Graham
That's the difference between mathematics, statistics and probability theory. Even the most perfect probabilty theory cannot predict the markets. Markets are more like consumer behaviour and rest on psychology, philosophy, astrology, luck and a host of other considerations. The intricacies / complications of all these subjects combined lead to the conclusion... 'markets represent the most unpredictable theory'.
Anupam garg
Feb 16, 2011ur primary article comes 2 me as a surprise. We have policies like NREGS coz of unemployment problems & at the same time our blue collared jobs r more expensive than other countries? its hard 2 believe that labor in our country is paid adequately or that wages r high.
BSNL is 1 fine example of a complacent company which had done well in its past. the company didn't look forward affecting its current revenue model. With source of income lesser than expenditure, it sure is on its way 2 bankruptcy. Growth in income cannot b ignored , no matter how much is set aside as reserve
LOUIS COLACO
Feb 16, 2011I agree with your view. We need to pull our socks and start working on our character and competencies including skills of our portential workforce. This has to begin in our homes, schools, university colleges, engineering & technology institutions, etc. Mr Azim Premji of WIPRO has set the ball rolling with a TRUST with a corpus of Rs9000 crores. Many can do it even on a smaller scale. I myself work with a Community College in Bangalore for the marginalized youth school dropouts. Just five of us started it with no capital but with moral support of the Church and are in the sixth year of operation. The need is the commitment teaching professionalism and Quality Management of resources.and a sincere & selfless dedication to the people of the country.
Shome suvra chakraborty
Feb 17, 2011India hasn't done the homework of building up labor intensive technology which could have transferred India into an industrial economy. The poor people who are redundant to increase agricultural productivity should get jobs in industries with more industrialization which will increase the labor flexibility.