I got this mail in my university mail id. It calls for relaxing labour laws, so that India can have many more states like Gujarat ( a happy hunting ground for corporates)! If only India were more like its state of Gujarat... Dear Friend If only India were more like its state of Gujarat: Tens of millions of Indians could get nice, new jobs. That’s one of the lessons from a Goldman Sachs report released Friday. Despite India’s red-hot growth streak for most of the past decade, the country has not been creating enough jobs for its people. Most of the world’s second-largest population in what has become Asia’s second-largest economy is still stuck doing relatively unproductive jobs in agriculture. The rapid urbanization of former farmers flocking to factories–which powered growth spurts and societal change in China, Japan and elsewhere across Asia—is not happening in India. “India’s well-known demographic dividend is yet to be reaped,” the Goldman report said. “Migration from rural agriculture to urban manufacturing is slow, thus reducing productivity gains.” Goldman, like many economists and executives, says that one of the main reasons India’s economic growth isn’t generating jobs is that companies get punished for hiring people. After growing to a certain number of employees—usually 50 or 100–Indian law makes it difficult to lay them off or even shut down a money-losing factory. The result is that entrepreneurs try to stay small, stay away from labour-intensive industries and use machines rather than hire people. The upshot is that job growth has been anaemic compared to the country’s economic expansion and most of the jobs created are in the informal sector—tiny businesses with fewer than a handful of employees. When India should be creating more factory jobs, it is actually creating fewer. Five million manufacturing jobs disappeared in India between the fiscal year ending March 2005 and the fiscal year ending 2010, the Goldman report says. “The industries which are losing jobs are the most labour-intensive ones—textiles, electronics, and apparel,” says the report. “Firms are substituting capital for labour.” According to Goldman’s estimates, India’s employment growth has slowed to only about 2 million new jobs a year in the seven years ended March 2012 compared to 12 million a year from March 2002 to 2005. While there has been better growth in jobs in the services sector, the labour-intensive manufacturing slice of the economy has been largely stuck. Between 2000 and 2012, jobs have increased at an abysmal rate of just 2.2% per year. Agricultural employment, the mainstay for over two thirds of the people, has practically not grown in these thirteen years. Manufacturing jobs have grown by just 4% per annum as industry languishes. The one sector showing big growth is services, but as recently released survey findings from the NSSO show, the bulk of it is in retail trade, construction and personal services, and these are transitory, low-paying and tough jobs. So what does this have to do with Gujarat? The relatively affluent western state has done away with, or been more flexible in its interpretation of, some of the most stifling labour laws, says Goldman. By giving companies more freedom to hire and fire as they please, Gujarat has been able to create more manufacturing jobs than other states, such as West Bengal, with restrictive labour laws, the report says. If the rest of India brought its restrictions down to the same level as Gujarat, the country could create 40 million new manufacturing jobs in the next 10 years, the report said. If it went even further and did more to revamp the regulations, India could add 110 million jobs during that period. To ensure that India were more like Gujarat, let us bring at the helm of national affairs Narendra Modi who has led Gujarat for the last 14 years and transformed its economy completely Sincerely Forum for Nation Building
Posted on: Mon, 31 Mar 2014 18:00:33 +0000
Trending Topics
Recently Viewed Topics
© 2015