That wasn't the point I was making. I meant I am not counted as a 'job created'.
If you want to convey that, you might do better if you separate out formal sector and informal sector, from the completely different formal employment and informal employment.
You missed the point. My aunt's business is very small and she has 4 employees. So how well do you think the more successful ones have fared?
Tell you what. Since you seem to be an ivory tower specialist, why don't you walk into any Naturals or Green Originals or L'Oreal franchise and count for yourself? I have never seen more than four at any of these. Unless in your opinion, productivity is very high in Hyderabad, that should be a good enough sample size. In small ones, there's either one, the owner-sole technician, or two.
So how well do you expect the more successful ones have fared?
Oh, so you don't believe in the rags to riches story? My family is filled with such stories.
Sure. If you say so. Your family is obviously an exception, and I am obviously speaking to one of the Birlas. I still don't believe in the rags to riches story. I deal with finance on a daily basis, as a financial advisor. If there were so many, I'd be out of work.
There are lots of cumulative growth stories, where people have had generations of foundation building, and have only branched out on a significant scale in the present generation.
A lot of people start with initial investment of less than 1L and have made business worth crores. Entrepreneurship is the only way to get rich. That's a fact.
Among other things, I've had occasion to go to THub, to their board meetings. Where are these successful entrepreneurs hiding?
There is always picking up after a loss. I have no backup and have suffered losses. I have a lot of debt, but I am comfortable with it even though the interest component itself is more than most people's salaries. If I was employed formally, it would have been insurmountable debt.
You may be doing well enough to pay the interest and still making money enough to stay afloat, but most of the cases where I have had work have been cases where people were undercapitalised and rapidly found that they were sub-optimally sized and got into debt. My job in those cases is financial re-engineering.
I have exactly one client who has gone from rags to riches. He has made great progress, but now has Rs. 4 crores of property, and has a loan of Rs. 96 lakhs from a major bank, can't get more money although he has an expanding market, and can't release his property value, although he can get facilities of at least Rs. 2 crores if he was to be making a loan application today. He has additional farm land of Rs. 5 crores + and can't do anything with it because banks won't lend him money on agricultural land.
Are you talking about India?
I doubt you have ever taken financial risks if you have such a negative attitude when it comes to dealing with money.
As the new Rockefeller, you obviously know it all. I did rather badly; I promoted and ran my own software services company on my own from 1988 to 1995, in Bangalore, and employed between 10 to 15 programmers at any given point of time after 1990. Finally gave it up as I couldn't run it single-handed, and the industry was growing so fast that my kids were picked up after their first year or so with me at three to four times the salary I could afford.
After that, I've turned around, independent of each other, three companies that had been making losses continuously during their existence, and put them on a permanently profitable footing. Last I heard, each was doing reasonably well, with around 10 to 20% annual growth. Besides re-positioning these, which meant knowing a lot about the market and the competition, there was a lot of financial junk to be jettisoned. I had to deal with the accountants and the accounting systems, with auditors, internal and statutory, with the bankers, and, in one case, with the government body responsible for rehabilitating loss-making companies, all of whom wanted to hear how the turn-around would look like in financial terms.
But you must be right, and I know nothing about entrepreneurship or managing money.
Dude, that's not counted as 'jobs created'. I think you have lost touch with the discussion. You have made the assumption that people are sitting with no work, I'm pointing out that people have setup their own businesses instead of being gainfully employed in a 9 to 5 job.
Yes, I know a number of these. They are generally people at mid-management levels who got fired in the down-turn and are making a virtue out of necessity. Only one, a pair who have teamed up in Bangalore, one from software services, and one from property management, seem to be making money. That's what they claim, but there's little to show for it. I tried to get them to support an effort for training and services in the cyber security area, but while they had bright ideas, they really couldn't do much in terms of results.
For those who have set up their own businesses, they are still employees - this time of their own businesses that they've set up. You do know that in Company Law, a Managing Director continues to be an employee.
And don't worry too much about my not having exposure to entrepreneurship. When the IIMC network got together to welcome the Director, on his first visit to an alumni association, 80+ people turned up. At re-unions, generally over 50 turn up. We do get to hear some snippets from the world of business at these gatherings.
I am not counted as an employee in a formal sector. So as far as the govt is concerned my job is not a job, it's a business and hence the govt has not helped create my job.
You are beginning to fascinate me. This is the approach of the Class D employee in government organisations, who still thinks that government's function is to create a job, his job, rather than creating conditions where individuals, groups or organised entities - organisations - create jobs. Your entire point seems to be that a job is what this government is being measured on; it is not. It is the capability of enabling employment, not by itself, but by enabling others. The private sector, or the public sector.
Self-employment - the small trader, the transport operator, the loading and unloading staff, plumbers, electricians, carpenters, masons, welders, taxi drivers, bus operators, ferry boat operators, tea shop owners - has existed from time immemorial. The government - this or any other - has done nothing, and neither have earlier governments. I don't know about this boom in the number of people sitting at home, making money, sufficient to beat a job, paying taxes and getting wealthy; I can't see any, I haven't met any, I haven't heard of any, except from you.
Uber drivers are not formally employed.
We were talking of their making money, a lot of money, and that getting missed out. My point is that they are NOT making money. It's a predatory employer, or contractor, or aggregator, whatever you want to call them, both Uber and Ola, and this is not a stable market.
And no, they don't overlap when it comes to govt statistics. And that's the problem.
Nonsense. The formal sector, that pays taxes, either employs or doesn't employ people. Once it employs people, those people are in formal employment. Conversely, people who are formally employed have to be employed by the formal sector in corporate terms. How can you say that these don't overlap?
What if growth in Q4 this year is 7.7-8%. Does that qualify as recovery?
If the figure relates to the old indexing system, hugely so.
If it relates to the new one, it's a disaster.
What you have considered is a stagnant economy. That's not the case. The economy has not stagnated to the point where freelancers are stealing someone else's job.
Stockbroking firms have more business than ever and an individual playing in the stock market is adding to the revenue generated, he is not taking away someone else's business.
Similarly, those who are working as freelancers are making more money than if they were formally employed. Of course, these people are probably taking away the jobs of people from other countries, but that's good for us right.
It applies to stockbroking firms because the stock market is in a bull run, and that, in secular terms, is expected to be the trend at least until 2020. It does not apply to all other sectors.
Completely wrong. The only people who can become freelancers are people who are damn good at their jobs. You can't be mediocre and a freelancer at the same time, nobody will give you work. You are given work based on the quality of work. That's also why you make many times more money than if you were employed.
Ho, hum.
Sure, if you say so. And this phenomenon is not known to anybody but yourself, because it doesn't show up in the government statistics.
Right. This is not the black economy, this is the mirror economy.
So people who setup their own businesses are people who have some level of competence in the field they are working in.
As I pointed out, there are 15 million people in the international freelance business, and this market has come up only recently. But the problem is this is not counted as 'jobs created'. But the fact is these people are adding more to the economy than the formally employed because they are earning forex for the govt as well as consuming more than when they were formally employed.
There are 15 million people in the international freelance business in India? Really? Sounds very very good. Now, if they don't show up in government statistics, where did this figure come from?
Please understand, we are talking about jobs created by the govt and its influence in statistics. The jobs situation is not as dismal as you believe, especially when you have the ability to setup your own business and try to get a few years out of that.
I am thunderstruck that that is what I have been doing myself, and that I don't see very many others doing something like that.
The only people who suffer are the ones who are mediocre or worse. But there's no saving them anyway.
3,000 management schools. Less than 300 of them placing their students at more than Rs. 25,000 a month at the outset. The top 6 or 8 IIMs get an average of Rs. 17 lakhs pa for their students; the next, even with the IIM cachet, average Rs. 12 lakhs pa.
In my experience as a teacher, at B School, about 70% are mediocre. The rest are snapped up by industry, and work for between 5 to 15 years before thinking of doing their own thing. No one has tracked these, but you seem to have copious statistics about them.
All that's great. But most of us* are earning forex. Forex = we can park it in safe havens and there's nobody to ask us about it. I can easily keep half my money in dollars or euros and then pay taxes only on money I have transferred and converted to INR. When you deal with forex, tax avoidance is quite easy. It's because the govt has not reached the level of maturity to make laws for, say, the Youtube business. How will the govt audit this stuff?
Right, so the state forex reserves are going through the roof, and you also have yourselves built up forex reserves in addition. Sounds like most of the loose foreign exchange in the world is making a beeline here. How do the other markets survive?
* Who is the 'us'? How do you know? Not reflected in government statistics; what happens? you have an association? You are the Cosa Nostra? The way you sling around statistics, it seems that there is a parallel government going on, and a parallel set of industry bodies, a shadow NASSCOM, a shadow CII, a shadow ASSOCHAM, a shadow FICCI. Fascinating. Such a complete grip on statistics, and the government has no clue.
I don't think you understand. Freelance became big in India only in the last 5 years. It's primarily related to the growth of startup ecosystem in India. 50% of the freelancers in India are swallowed up by tech startups in India alone.
Not to mention, you need high speed internet because you need the ability to network through streaming via video conferences with your clients. 128 bits per second gives you jack all.
Take Coursera for example. You are streaming a live video of yourself. Do you think that's possible with a 128 bits line? Please be realistic. The internet ecosystem has changed only in the last few years.
The point I was making was to thank you for telling your grandmother how to suck eggs. I never said anywhere that that was the speed today, or that instead of video codecs, we could use uucp. I was making the point that I've been watching from the 1990s. You were in school then, from your descriptions. Taking all the technical advance into consideration, where the growth is coming from is difficult to see.
At one point, you say that freelancers/entrepreneurs make pots of money; that is the new way, not dull, old 9 to 5 office jobs. You then go on to say that most freelancers are snapped up by start-ups. So great; so this is a solid base for growth? Have you seen the valuations? Do you remember the Dotcom boom and the valuations then? And this is what you are pushing as the new Indian economic miracle?
Yes, I speak to them every day. They moved up from getting paid 10k-15k all the way to 40-50k a month. Huge, huge upgrade. The ones who got screwed were the ones who took too much debt and expected to earn up to 80K a month forever. I have in fact advised some of them on how to expand their business over the next 10 years on just 40-50k a month.
Why don't you speak to an Uber driver yourself, he will tell you in detail how Uber raised his standards of living drastically.
I speak to them daily. Not occasionally. I haven't met one, in the last six months, that isn't struggling. Neither they nor Ola. I don't know where your examples are coming from, but they are flatly contradictory to my own experience. I'm not calling you a liar, mind you; that would be grossly impolite.
No they don't. I am not formally employed. I am not considered as a job created. Mainly because I work for foreign employers and they have no need to give any information to the Indian govt. And as far as the Indian Govt is concerned, I am a business, not an employee or someone who is part of the 'jobs created' statistics.
You pay taxes, don't you? The government doesn't need to worry about those paying taxes. It needs to worry about those not paying taxes, who also happen not to be employed. So you earn huge money, how does that help the millions who would so dearly love to pay taxes, but can't get three square meals a day?
Where are the jobs? Or, if that word offends you so greatly, where is the employment?
When I work on skills development, I am not working as a placement agency, trying to get those kids jobs. It helps if I know people, but what is core is to teach them saleable skills.
You'd be surprised how few of them can work through video conferences with foreign clients.
It is obvious that those who are formally employed will pay more taxes, but only for now. But it is the freelancers who have the biggest ability to scale up. The first big businesses that Indians will setup in the future will come from the freelancers and entrepreneurs. Naturally, these people have gained their experience from being formally employed previously, but that's how it all works anyway.
We are talking here and now, and what you want us to do is wait for us to get over the shocks to the economy and wait for the promised land to come. We are to wait for these Godzilla set ups, by freelancers and entrepreneurs, who have been employed before, in a formal sector whose growth is shrinking.
You get experience, you branch out, you setup new businesses and then one or many of them succeed. But the problem is the govt doesn't count it as 'jobs created', it's counted as new businesses.
The fact is after Modi came, the startup ecosystem has expanded beautifully. MUDRA has given loans to over 90 million people out of which 22 million are new businesses. That in itself is the biggest achievement of the govt in the field of employment.
Bullshit. You just said it yourself. 68 millions are NOT for new businesses. And you feel that is the kind of conversion ratio that will build a huge business complex in India in future?
Sure.
While I pick my myopic way through them, and learn what I have been missing, why don't you return the favour? Go out and talk to people; not your self-referential way, where all you can see is yourself reflected a thousand million times, but to management guys, who are struggling to cope with the twin shocks; with employees, who have lost jobs, or expect to lose jobs, or have friends who have lost jobs; with service providers, who have found the going increasingly difficult with the shrinkage of working capital, and with increasing dues, because their buyers can't pay (Vodafone owes the cyber security consultants I talked about elsewhere around Rs. 68 lakhs; the firm has factored its receivables - these were gold-plated, right? - to the hilt and is now paying penalties because of delays; employees had not received salaries on time earlier, at present they are two months in arrears - there you go, another set of freelancers in the making). Or talk to Uber drivers or Ola drivers, currently earning between 25,000 to 40,000 a month, and unable to cope, unable to balance their EMI payments and their consumption needs; or small artisans and technicians, who can get work, but can't get payment, and are forced to compete with more and more flooding into the marketplace, no, not for jobs but for work. I could go on and on, and I haven't come to the rural market yet.
So what? I pointed that out long ago that MGNREGA is the reason why the govt has successfully saved the rural sector.
The quality of life in the rural area has increased under Modi after demonetization. That's the simple fact. Why else do you think Modi won big time in UP 5 months after demonetization.
The quality of life in the rural areas is dismal. Earlier people got paid, in cash; now things have got back to near normal, but there is no improvement. Far from it. Your rosy picture really needs special glasses; the crops are withering in the fields in north India, as any damn fool can tell you, if you had looked up from the monitor screen and asked, and I am telling you that in a satisfactory rainfall state, things are grim.
I don't know how long you will go on thinking that what happens, apparently, reportedly, to one individual represents the picture for the country as a whole. And I wonder about an analysis that depends on saying, 'He won, didn't he? How could he win if things hadn't really been great!'
Had the rural areas failed, do you think they would have voted for him? Get real.
And there you go.
What happened to the people of UP under the Yadavs doesn't matter. Decades of misrule and the faint hope that this time, things MIGHT change doesn't matter. According to you, the voters of UP looked at the $600 bn that's been added, looked at freelancers flourishing (never mind their - temporary - debts) and the vast opportunities opening up due to fast Internet and video conferencing possibilities, and voted for the BJP.
Makes sense. To the right type of mind.
Are you a socialist from commie land? Only socialists think this way.
About time; I was getting worried.
Every time a bhakt can't find an argument, he finds a commie, a socialist (the two are interchangeable in his fairly rudimentary political vocabulary); what took you so long?
Even if 1% of the startups a year succeed, you will one day get a $100B company in 50 years that will employ 500,000 people. You have no clue about the importance of an entrepreneur, especially in a country as large as India. Ever heard of Bill Gates or Steve Jobs? Who do you think they are? Did they start off with billion dollar companies from day one? Everybody starts small.
Bill Gates? Steve Jobs?
No.
Who were they?
The difference between an employee and an entrepreneur is that even if they both start off as van loaders, one day the entrepreneur will buy the van while the employee will retire with a backache, probably after working for the entrepreneur. Which one would you rather be?
Your over-reliance on faulty statistics to present a dismal picture of an economy that has added $600B makes you look silly. You simply don't understand the importance of what Modi has done. All you want to see is some dumb growth figure without actually looking at the quality of that growth.
Fake Data
). OK, I'm just being obnoxious, but I know about this 'skilled' sector pretty well. You can't scale up.
