Gujarat may top 'ease of doing business' list, it lags in creating jobs

Assocham paper reveals TN and Maharashtra have pipped Gujarat in terms of job generation in registered manufacturing sector

Gujarat may have emerged in a recent report as the best state to do business, but Tamil Nadu and Maharashtra create more jobs in the manufacturing sector.

Tamil Nadu and Maharashtra have pipped Gujarat in terms of job generation in registered manufacturing sector across India, noted a recent Assocham paper.

Gujarat, had only recently topped a World Bank-compiled ranking of Indian states for bringing in reforms to improve 'ease of doing business'.

On the job creation front, however, the state lagged behind Maharashtra and Tamil Nadu, when it came to jobs in the manufacturing sector. Interestingly, the manufacturing sector, roughly contributes to around 28% of its GSDP.

The Assocham paper 'Assessment of employment in registered manufacturing industry' highlighted, "While Tamil Nadu and Maharashtra have topped with a share of over 15% and 14% respectively, Gujarat has garnered third highest share of 10.5% in the total 1.29 crore jobs generated in the registered manufacturing sector across India as per the latest available data of 2012-13."

Andhra Pradesh (9%) and Karnataka (7%) are other states with significant share in this regard.

"Tamil Nadu (1.2%) and West Bengal (0.2%) were the lone states that have recorded a positive year-on-year (YoY) growth rate that is during 2011-12 and 2012-13 in employment generation in manufacturing sector while all other states including Gujarat (2%) have registered a slump in this regard," the paper noted.

"Implementation of a single, nation-wide goods and services tax (GST), proper co-ordination amid different government departments to ensure time-bound project clearances, better Centre-state co-ordination for fast-tracking clearances, infrastructure development, significant investments in imparting vocational education together with thrust on innovation are certain key steps that can help revive manufacturing industry to generate more employment opportunities across India," said D S Rawat, national secretary general of Assocham.

He added that, "Lack of new investments is a real threat to the survival of manufacturing in India, as such there is a grave need to revive investments in food and beverage, textile sectors as they are highly labour-intensive and can create plenty of jobs."

Food products (12%), textiles (11%), basic metals (8%), wearing apparel (7%) and other non-metallic mineral products (7%) were the top sectors accounting for highest share in employment generated by registered manufacturing sector in India as of 2012-13.

Apart from wearing apparel, all of the aforementioned sectors had recorded a negative year-on-year (YoY) growth rate in employment generation - food products (5%), textiles (4%), basic metals (6%), wearing apparel (0.0%) and other non-metallic mineral products (5%).

According to previous analysis by Assocham conducted about a year ago, Gujarat, over the years has emerged as a prominent manufacturing investment centre over the years thereby accounting for highest share ranging between 26-33% in key product segments of non-metallic mineral products, textiles and food & beverages during 2004-05 and 2011-12.

Besides, the state had acquired second highest share of about 25% and over 18% in investments attracted by transport equipment and chemicals industry respectively during the said period.

With a share of over 9%, Gujarat had figured on fifth rung amid states that had attracted highest share in total investments worth over Rs 30 lakh crore attracted by states across India. Odisha (18%), Karnatka (14%), Jharkhand (13%) and Andhra Pradesh (10%) remained ahead of Gujarat in this regard.