CJP should set up a shadow government putting out policy recommendations and responding to government policy on an ongoing basis
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With the excitement generated by CJP and the certainty that this is the start of something big, I find myself thinking not of education but the end goal of education — employment, which, as we know, is, perhaps, the darkest hole in the Indian economy.We have all heard and some of us know stories about people with college degrees who are working as Uber drivers or delivery “executives”. The CJP protests about the failed educational testing system points to the lakhs of young people who are flailing by the wayside while they aspire to (as articulated wonderfully well by Rama Bijapurkar) “become middle class — have a predictable steady income with a regular job, have a qualification and credentials that provide income and social mobility over time and all the good things that come with it.”Market, the culprit?Interestingly, in an ethnographic study of lower-income mass India, the same author found that young people did not blame the government for the lack of jobs; they attributed that to “the market”, meaning that there just aren’t enough jobs.And that is the real issue and, perhaps, the most pressing failure of this (and, to be fair, previous) government policies. The truth is that the “market” is increasingly stacked against the young, lower-income person even when he/she can overcome not just the process difficulties that have been highlighted recently but also the poor outcomes of the general quality of education. There are nowhere near enough jobs that can support young Indians’ middle-class aspirations.And even where there are, the salaries paid are so low as to sometimes render more ad hoc employment commercially preferable. The starting salary in the IT sector, for instance, has been stuck at around ₹30,000 per month for the last five years; this is about the same a hard-working food delivery “executive” or Uber driver can make.Creating jobsThus, a parallel need to fixing the public examination system — and, thanks to the CJP, that is now firmly in the public eye — is for the government to take more focused creative steps to increasing professional employment.Fiscal policy, that has for decades favoured capital over labour in myriad ways, could be one tool. Evidence abounds in terms of the rapidly increasing income/wealth inequality, which is amongst the highest in the world (and certainly higher than it has ever been in our country) and, perhaps more relevant, the huge ratio of management to median salaries in Indian companies — at more than 200, it is (again) one of the highest in the world, topped only (and, of course) by the US.A more sensitive tax policy could, perhaps, provide concessions to companies that had a ratio below, say, 100 — this is quite common in Europe and even here I know of one small company that has a ratio below 15. This could be achieved by either bringing down the top salaries (likely a non-starter) or increasing salaries at the low end.This would, of course, affect company bottomlines which may affect equity prices, but it would also be good for growth since there would be more spending power in the hands of those who are likely to use it most, which in turn could lead to further investment setting off a favourable cycle.Fostering SMEsAdditionally, the key to increasing employment is to find ways to help SMEs to grow. To be fair, all governments have focused on this and there has been some movement, but there’s so much more to be done.A young friend of mine has a debt fund focused on cash-flow based lending, which is a critical tool to get capital to SMEs. While his business is doing well, he explained to me that it is difficult to be able to “see” the quality of many of his potential customers because information collection and flow is so weak. Perhaps this signals an opportunity for low cost consulting services, particularly in Tier 2 and Tier 3 cities.Another constraint the cash-flow based lending industry faces is availability of capital. Many young professionals like himself, who understand the importance of diversification, don’t invest in debt because the return they can get (even from high yield cash flow lending) is too low in comparison to potential equity returns because debt income is taxed at the marginal rate.Perhaps, the government needs to look at treating the yield delivered by funds involved in cash-flow based lending as capital gains if the interest is back-ended.Perhaps, the CJP should pick employment generation as another arrow to its bow. In fact, the CJP should set up a shadow government putting out policy recommendations and responding to government policy on an ongoing basis. We are, after all, the real government of the country. And we are ready.Aa jaon maidan mein!The writer is CEO for Mecklai FinancialPublished on August 4, 2026
