The anxiety about job growth is logical. Without employment rising, the economy, owing to lack of purchasing power, is likely to remain stressed. Various programmes such as Make in India, Start-up India, Stand Up India, and Skill India have been designed to produce results in the slightly longer term. But job market is adding over 10 million seekers every year. It is a serious politico-economic concern that the Prime Minister is seized with.
His rushing through the GST legilsation is attributed to this aspect. An integrated national market, he hopes, will bring investment, spur growth and create jobs. He also expects tax terrorism to end. The goals are appropriate.
But data coming from the market, just at the nick of spectrum auctions — supposed to fetch Rs 5.6 lakh crore — shows that the growth of large telecom companies is slowing down. Both Idea and Airtel are losing. Idea grew only by 13.24 per cent in April-June this year against 19.11 per cent this time last back. Airtel’s growth fell to 7.68 per cent now from 19.1 per cent in April-June 2015.
The companies also reported declining realisation from data sales. Overall revenue growth was over 10 per cent a year back; this year, it was only around 5.4 per cent. Revenue growth is slipping into the negative sector. Data revenue has fallen by Rs 127.6 crore. This speaks volumes.
Many other sectors are also under stress, leading to job losses. The automobile sector has thrown out 23,000 workers.
Overall job creation, according to Labour Bureau, is shrinking. The Bureau says that new jobs were not created all through 2015. There was overall decline of 20,000 jobs across eight labour intensive sectors — textiles, leather, metals, automobiles, gems and jewellery, transport, IT/BPO and handloom/powerloom. There were 43,000 job losses in the first quarter of FY2015-2016. The second quarter was better, with 1,34,000 new jobs being created.
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 year ending March 2016 compared with 2,71,000 job in the corresponding period of the financial year ending March 2015. In the automobile sector, for instance, there were 23,000 job losses in export units compared to the 26,000 job additions in other seven labour-intensive sectors in the second quarter of FY 2015-16.
India had added 4,19,000 jobs in 2013, 321,000 jobs in 2012, 929,000 jobs in 2011, 870,000 in 2010 and 1.28 million in 2009. The labour bureau survey found that 19,000 people lost jobs in the gems and jewellery sector in 2015, followed by followed by handloom/Powerloom at 11,000. Employment fell by 8,000 each in leather and automobiles sectors while 4,000 people lost their jobs in the transport sector. The supposed key growth driver — the IT/BPOs secto — created the 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.
The concern is natural. One reason being attributed to uncertainties in some industries is the flip-flop in tax policy. The industry has not yet forgotten how Nokia had to close shop, throwing thousands out of jobs, due to an unrealistic tax demand. It killed the hen that produced the golden egg.
Subsequently, Vodafone had similar problems. Crompton Greaves is reportedly divesting its consumer business for Rs 2,800 crore. Larsen & Toubro wants to exit all businesses with revenues under Rs 1,000 crore. The $35 billion Essar Group is reportedly selling part of its refinery business and a portion of its ports business to pare its steep debt.
The Prime Minister and his Finance Minister want the tax-men to behave, but the latter are in no mood to listen. Now, the National Green Tribunal has added to the woes of the industry. Toyota has already told the NGT that its ban diesel cars with Euro IV and VI specifications is a virtual death penalty for the automobile industry. The Government has said that cars cannot be junked even after 15 years, if found fit.
Mismatch in various quasi-legal bodies and the tax departments is 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 political rivals to create a grim scenario.
http://www.dailypioneer.com/columnists/oped/a-rising-india-needs-new-jobs.html
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