Economic Highlights
New
Delhi, 15 August 2016
Job, Farm Growth Vital
WILL POLITICIANS PLAY BALL
By Shivaji Sarkar
Prime Minister
Modi’s recent stress on agriculture for creating jobs is welcome. Coming as it
does, after NITI Ayog Dy Chairman Aravind Panagariya underscored that there was
under-employment in the farm sector a few days back.
Undoubtedly, the anxiety
on job growth is logical. Without employment rising, the economy is likely to
remain stressed due to lack of purchasing power. Specially against the backdrop
of the Government’s various programmes like Make in India,
Start Up India and Skill India
are likely to produce results in a slightly longer term.
However, as
things stand today the job market is adding over 10 million seekers every year.
Indeed, this is a serious politico-economic concern which the Prime Minister is
seized of.
In fact, his
urgency to get the GST Bill passed by Parliament is attributed to this aspect.
One-India-market, he hopes, would bring investment, spur growth and create
jobs. He also expects tax terrorism to end. His goals are appropriate.
But data coming
from the market, just at the nick of the spectrum auctions which is supposed to
fetch Rs 5.6 lakh crores, shows that large telecom companies’ growth is slowing
down. Both Idea and Airtel are losing money. An example, Idea grew by 13.24 per
cent in April-June against 19.11 per cent a year back while Airtel’s growth
fell to 7.68 per cent now from 19.1 per cent in April-June 2015.
Add to this, the
companies also reported declining realization from data sales. Overall, while
the revenue growth was over 10 per cent a year back, today it is touching
around 5.4 per cent. Worse, revenue growth is slipping into the negative sector
wherein data revenue has fallen by Rs 127.6 crores. This speaks volumes.
Notably, many
other sectors of industry are also under stress leading to job losses. The
automobile sector has thrown out 23,000 workers. Shockingly, according to
Labour Bureau overall job creation is shrinking. More scandalous, no new jobs
were created all through 2015.
Consequently, there was an overall
decline of 20,000 across eight labour intensive sectors. Namely, textiles, leather, metals,
automobiles, gems & jewellery, transport, IT/BPO and handloom/powerloom. Totalling, 43,000 job losses in the first
quarter of the financial year 2015-2016. Thankfully, the second quarter was
better, with 134,000 new jobs.
Besides, employment in export units, reeling under shrunken
global demand, also saw a sharp decline. There were only 5,000 job additions in
the first half of fiscal 2016 compared with 271,000 in the corresponding period
of financial year 2015.
In the automobile sector, for instance, there were 23,000
job losses in export units compared to 26,000 job additions in the other seven
labour-intensive sectors in the second quarter of FY 2016.
According to the Labour Bureau data,
India
had added 419,000 jobs in 2013, 321,000 jobs in 2012, 929,000 jobs in 2011,
870,000 in 2010 and 1.28 million in 2009.
More significant, the survey found
that 19,000 people lost their jobs in the gems and jewellery sector in 2015,
followed by handloom/Powerloom at 11,000. While employment fell by 8,000 each
in the leather and automobiles sectors, 4,000 people lost their jobs in the
transport sector.
Additionally, the supposed key
driver IT/BPOs created 76,000 jobs during 2015-16 followed by textiles 72,000
and metals 37,000.
“India’s economy needs to create
enough “good jobs” — jobs that are safe and pay well, and encourage firms and
workers to improve skills and productivity”, the Economic Survey 2015 said.
This concern is natural. One reason for
this is due to uncertainties in some industries thanks to the flip-flop tax
policy.
Certainly, the industry has not yet
forgotten how Nokia which had emerged as one of the global manufacturers in India had to
close shop throwing thousands out of jobs due to an unrealistic tax demand. It
killed the hen that produced the golden egg. The subsequent Vodafone and
similar other cases are dampeners too.
This is not all. Crompton Greaves is reportedly divesting
its consumer business for Rs 2,800 crores.
Larsen & Toubro (L&T) wants to exit all businesses with revenues
under Rs 1,000 crores. The $35 billion Essar Group is reported selling part of
its refinery business as well as a portion of its ports business to pare its
steep debt.
Compounding matters, Prime Minister
Modi and Finance Minister Jaitley want the tax men to behave. They are
seemingly in no mood to listen.
Now, the National Green Tribunal
(NGT) has added to the woes of the industry. Toyota has already told the NGT and courts
that the Tribunal’s orders on banning diesel car productions with Euro IV and
VI specifications are virtually a death penalty for the automobile industry. Forcing
the Government to come out with the statement that cars cannot be junked even
after 15 years if found fit.
However, dichotomy and mismatch of
the various quasi-legal bodies and tax departments are creating uncertainties.
Are these organizations issuing orders in the interest of the people? Or are
they deliberately throwing spanners to upstage the pro-people, growth-oriented
activities of the Government?
One only hopes they are not playing
into the hands of some political rivals to create a grim scenario.
True, this summary might look a
little far-fetched. But our leaders behavior certainly is Tughlaqi and against the basic laws and requirements of a society
that is trying to unshackle the chains that have given this country the epithet
of “licence-permit raj”.
Clearly, this has to change for a
dynamic economic scenario. Many developments are taking place in areas like
agriculture. Modi himself has taken note of it. In fact, this has happened
mostly without any help from the Government. This calls for a closer inter-action,
that Modi says he wants, with the “modern farming community”.
Surely, weaning 80 crores people out
of the farms is not easy. If jobs are
created around the farms, as it is being thought of now, it would have a sanguine
impact all across the economy, rural growth, urban stabilization and keep a check
on migration. There is no space for competitive politics.
In sum, even other political
formations howsoever opposed to the Government they might be, should sit
together to change the basics. The days of opposition for the sake of opposition
are over. If the people prosper so would the political system irrespective of
their ideologies.
At least, this Government is
thinking anew and is keen on new policy prescriptions. It has to be given the chance.
A change in rural economy and job generation would make the major difference.
It is a situation of crisis and everyone has to work together to tide over it.
----- INFA
(Copyright, India News and Feature Alliance)
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