Though Punjab is brimming through tough times but even during its toughest time, the diaspora amongst Punjabi entrepreneurship spirit is a well-known fact across the globe. We have numerous examples of successful startups which have emerged as unicorns in the last 5-7 years like Zomato’s co-founder, CEO Deepinder Goyal, son of a teacher who hails from Muktsar, a small town in Punjab and Flipkart CEO, Binny Bansal, a banker’s son who belongs to Chandigarh. These stories are awe-inspiring in the changing dynamics of employment and have set an example for millions of Punjabi youth, most job seekers rather than job providers. To fuel the entrepreneurship spirit among job seekers, multi-faceted efforts are needed to accelerate employment generation in Punjab. The agrarian state cannot grow more fields but can create more job providers in the bustling industrial services and tertiary sectors.
Unfortunately, our education system does not focus on the development of essential entrepreneurial skills in school students, even though it is the main pillar of job providers. Thus, to support the entrepreneurial spirit, in its first full budget for 2023-24, the Punjab government led by Bhagwant Mann, gave nod to the ‘Business Blaster Young Entrepreneur Programme’ in all schools from the next academic session to encourage students from 11th standard to become entrepreneurs. Successful entrepreneurship and these unicorns Punjabi founders who bring with them years of entrepreneurial experience can play a vital role as mentors and can contribute the angel funding to build entrepreneurial orientation and mindset among the youth, especially school dropouts. They can be skilled, which would equip their budding entrepreneurship to take charge as a job provider.
In Punjab, 28 percent of the young force is unemployed among the age group of 20-30 years. Among these, nearly 62 percent are matriculated or above and one-fourth of them are technical or professionally trained. The mismatch between the aspiration of educated youth and available job opportunities is believed to be the reason behind the higher unemployment observed in the state among youth, exacerbating the distressed places associated with poorer mental health, crime and drug abuse. To fulfil the widening gap between job providers and job seekers, there is a need to spell out a long-term Young Entrepreneur Policy(YEP) which can transform job seekers into employers. This would eliminate the problems of unemployment in Punjab.
Unemployment Forces Aspirants for Odd Jobs Abroad
A variety of push and pull factors are at play which has resulted in rising unemployment and challenges that are gripping and curbing Punjab’s growth. Various studies reveal that 30 percent of students are dropouts of school and 21 percent of the rural population is suffering from mental disorders due to unemployment. A large proportion of the small and marginal farmers have been selling their lands to fund the migration of their children abroad in search of greener pastures. Better standards of living in developed economies like Canada, the USA, Australia, and the UK are the biggest pull factor attracting the high aspirational youths in the state. This is substantiated by the fact that a total of 2,69,534 registered job seekers to the Unemployment Bureau in 2021. However, the Centre for Monitoring Indian Economy (CMIE) claimed that the total working age population in Punjab has gone up by 24 lakhs, from 2.34 crore in January 2017 to 2.58 crore in January 2022, and the total number of employed in the state stood at 99 lakhs. This indicates that a possible mismatch exists between the jobs available and the aspirations/qualifications of the applicants, forcing them to do even the odd jobs abroad.
Employment Trends and Potential for New Entrepreneurs
Developed countries are employing population as per the GDP contribution which is a sign of equal distribution of income. In the US economy, 79 percent share of the GDP is coming from the service sector, and a similar percentage of the population sustains their livelihood from a similar sector. In the case of Punjab, the structure of the economy has changed in terms of GDP; nonetheless, the employment structure is still conventional. It is estimated that approximately 26 percent of the population sustains their livelihood from the agricultural sector in Punjab. While in the service sector, only 30 percent of the population is employed. This is a reverse ratio of the GDP of both sectors. Only the industry sector could minimize the gap in the Punjab economy where 24 percent of GDP comes from the industrial sector, which is providing 35 percent of employment.
Agriculture
The agricultural growth reaches a plateau and land holdings shrink at large due to family division. The employment share of the Punjab agriculture sector has declined from 50 percent in 2004–05 to around 26 percent currently, against the national average of 45.6 percent, thus the share of agriculture in state GDP has also declined from 48.6 percent to 24 percent. Still, there are huge opportunities in micro-processing units near farmgate, with efficient supply chain and marketing linkage.
Manufacturing
The industry sector contributes 24 percent of the GDP and 35 percent of the population is sustaining their livelihood from the sector. Though there are enormous opportunities for employment generation, there is a need to expand the skewed industrial base through more presence in global markets.
Punjab’s manufacturing sector is dominated by small and medium enterprises, and is home to around 15 lakh MSMEs, employing a workforce of 24 lakhs. The most important pillar of the industrial sector, the MSMEs, are facing stagnation in growth. Still, there are huge opportunities and potential for existing and new entrants in the rich industrial base of textile and yarn, auto components, tractor and agriculture implements, bicycle and parts, hosiery, sports goods, hand and machine tools, engineering goods and many others to enhance their presence in the global market.
Service Sector
The service sector like IT and tertiary sectors like education, health, hospitality and entertainment etc. contribute 53.4 percent to the state GDP but at the same time, the service industry provides only 30 percent of employment. There are around 600 startups, majorly in the IT sector. To develop a new culture of innovation, the state government should support cluster-specific bottom-up approaches to build and strengthen startups and entrepreneurship ecosystems for nurturing innovation in the state.
To provide impetus to entrepreneurship in the service sector for development, the state should encourage the setting up of sector-specific incubators, ready-to-work plug & play spaces for digital manufacturing, life-sciences & biotechnology, agro & food processing and information technology. These incubators will be set up in and around the existing and envisaged industry clusters in the state to transmit knowledge and technology-driven enterprises.
The Way Forward
Apart from the state government initiatives for the Business Blaster Young Entrepreneur Programme, the CSR, schools/colleges alumni and NRI funds can support young entrepreneurs. The Entrepreneurship Development Cell (EDC) by corporates, can prepare entrepreneurially-minded youths and aim to promote the culture of ‘job providers’ rather than ‘job seekers.’
Punjab needed a long-term State Young Entrepreneur Policy to support Entrepreneurship Development Cell, which is required to start up a new venture or run an ongoing business endeavour successfully to boost job providers for employment generation at large.
The writer is Vice-chairman of Sonalika group, vice-chairman (Cabinet minister rank) of Punjab Economic Policy and Planning Board. Views expressed are personal.
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