Myths and Realities

The left, communist left in  general, continues to nurse the illusion that industrialisation means job creation. They think more investment, particularly by big houses, both domestic and foreign, can alone solve the mounting unemployment problem of the country. They simply overlook the phenomenon of robotisation—the principal factor of jobless growth. India is marching ahead as per Modi’s propaganda blitz but existing jobs are vanishing, not to speak of new jobs. Common debate on industrialisation is confounded by several myths regarding its nature and impact on labour market and technological progress. Given the present industrial culture and laissez faire atmosphere, thanks to neo-liberal onslaught, it is next to impossible to think of long-term industrial activity that may add to productive capacity and help create permanent jobs in some sectors.

An Indian Labour Ministry survey shows that only 1.35 lac jobs were created in 2015, compared to more than 9 lac in 2011, and 4.19 lac in 2013, in eight labour-intensive industries, the only ones that are surveyed. Almost one million new people enter the job market every month. There is no significant move to generate 115 million non-farm jobs over the next decade to gainfully employ India’s workforce, and reap demographic dividend. The 2016 Economic Survey indicates that during the last decade (2001-11), the growth rate of the labour force was 2.23%, much higher than the growth rate of employment at 1.4%. The employment growth rate has been far less than the growth rate of the Indian economy. Census 2011 points to the average growth rate of the economy at 7.7% per annum, when it was only 1.8% for employment. Jobless growth has been more dramatic in the last two years, i.e., the first two years of Modi regime.

Employability problems relate to services which can easily recruit skilled white-collar workers, whereas industry cannot transform peasants into factory workers so quickly. Basic Training of Unskilled Workers is missing. Only 6.8% persons aged 15 years and above, are reported to have received or be receiving vocational training. Primary and Secondary education, where the dropout rate remains very high, provide poor education. The share of education in the budget for 2015-16, rose from 3% to 3.1% only. Small and Medium Enterprises (SMEs) have four times higher labour intensity than that of large firms. The investment commitment of multinationals in India is $225 billion over five years, which would translate, as claimed, into the creation of 6 million jobs only. The SMEs employ 40% of the workforce of India, which represents about 45% of India’s manufacturing output, and 40% of India’s total exports. Yet the SMEs have poor access to credit, and approximately 95% of units still require to be brought into banking fold. SMEs are badly affected by the erosion of state protection. The big companies enjoy tax ememptions, representing Rs 5,50,000 crore in the 2015-16 budget, including Rs 1,84,764 crore for Central Excise duties, and Rs 3,01,688 crore for customs duties.

The point at issue is how to create jobs. The answer is simple : ‘no’ to jobless growth. ‘No’ to big industry. State protection of labour-intensive small and medium industries. But the Left like political right simply sings to the tune of ‘growth’ at any cost. All things considered unemployment situation is worsening with every passing day and it may become explosive anytime soon—maybe before Modi seeks fresh mandate in 2019.

The tragedy is the Left in this country never tried to understand the dynamics of Cuban economy, in the face of prolonged American blockade, how they solved many problems—education, health, unemployment—without inviting Coca Cola and Du Pont. But one cannot expect much from the official Indian Left that is more or less a replica of British Labour Party.

Frontier
Vol. 48, No. 51, Jun 26 - Jul 2, 2016