Indian products have had a demand in the market since the ancient ages. The artifacts that were made out of just the household in India had a huge demand in the European market. In addition to this, the textile industry i.e. the cotton fabric that was weaved in India had a huge demand over the world. There was a time where China would import Indian Khadi to be dressed from head to toe. Yet, China beat India and a lot of other European countries. What changed the Chinese economy?
An Agrarian society transformed itself into an Industry driven country with the manufacture of numerous goods that the world did not know it needed. What caused the transformation? Up to the year 1978, the country’s GDP growth was on an average of 6% but post that it gradually took a rise to 9.4%. Several years it even touched 13%. After several economic measures taken up by the government in the field of encouraging new business, training workers, increase in the number of workers China’s productivity gains accumulated to 42% of China’s growth between 1979-94. China undertook a massive retraining program to boost their economy, one of the major retraining programs was to ‘Skill the Labour.
Post-1978, China saw 17% growth in labor productivity and efficiency, productivity’s share of output growth exceeded 50%. Additionally, China undertook the “Three Year 10 Million Program”, where the motive was to train 10 million laid-off workers within 3 years. This allowed the trainees to master a specified occupation, enhance their skill set, change their employment method allowing them to be re-employed. In addition to this, the government had estimated to train 12.22 million laid-off workers however, ended up training 13.58 million. The program has still reaped benefits to China, as per 2014, the skilled labor force had risen to more than 165 million, with those classified as highly skilled reaching nearly 48 million.
Apart from this, the government-provided parallel training skills to laid-off workers encouraging them to start their own business. Under the name of “Starting Your Business” program, the government trained workers to build a potential to process and run their own business firstly allowing them to master in a specific field like commerce, tax, etc. this only resulted in a gradual rise in the number of enterprises which increased to 61% between the training period 1998-2000. Furthermore, the Chinese government even provided a highly skilled workers program allowing an opportunity to further enhance their skills and attain the best training to be able to be highly skilled in a specific field. Finally, for those that were qualified but unable to fetch a job, they were put through a ‘Vocational Program’ which trained them with vocational skills or a start your business program which was also a value addition for their certification.
In conclusion, China adopted various methods, increased their capital investment, allowed FDI, and most of all skilled their labor force which enabled them to be one among the country to have a strong labor force. What should India do to reach up to China’s economic status which India is trying to seep into is to skill the labor force which seems to be a recurring problem from Large to MSMEs? The Indian government has allowed 100% FDI in certain sectors and allowed certain financial helping hands but training the labor force could turn the tables for India.
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