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Political consensus must for job growth; taxmen, quasi legalists throwing spanners

 

The recent stress by prime minister Narendra Modi on agriculture for creation of jobs is welcome as NITI Ayog deputy chairman Aravind Panagariya only a few days back said there was under-employment in the farm sector.

The anxiety on job growth is logical. Without the employment rising, the economy, owing to lack of purchasing power, is likely to remain stressed. Various programmes from make in India to start up and skill India are to produce results in 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 bill 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. The goals are appropriate.

But data coming from the market, just at nick of spectrum auctions – supposed to fetch Rs 5.6 lakh crore, shows that large telecom companies’ growth slowing down. Both Idea and Airtel are losing. The Idea grew by 13.24 percent in April-June this year, against 19.11 percent a year back. Airtel growth fell to 7.68 percent now from 19.1percent in April-June 2015.

The companies also reported declining realization from data sales. Overall revenue growth was over 10 percent a year back against it now touching around 5.4 percent. The revenue growth is slipping into the negative sector. The data revenue has fallen by Rs 127.6 crore. It speaks volumes.

Many other sectors of the industry 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. It says there was overall decline of 20,000 across eight labour intensive sector – textiles, leather, metals, automobiles, gems & jewellery, transport, IT/BPO and handloom/powerloom – there were 43,000 job losses in the first quarter of FY 2015-2016. The second quarter was better, with 134,000 new jobs.

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 in financial year 2015. In the automobile sector, for instance, there were 23,000 job losses in export units compared to the 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.

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 driver IT/BPOs created the 76000 jobs adding 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 some uncertainties in some industries is the flip-flop tax policy. The industry has not yet forgotten how Nokia that has emerged as one of the global manufacturers in India has 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 dampener.

Crompton Greaves is reportedly divesting its consumer business for Rs 2,800 crore.  Larsen & Toubro (L&T) wants to exit all businesses with revenues under Rs 1,000 crore. 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.

More the prime minister Modi and finance minister Arun Jaitley want the tax men to behave they are seemingly in no mood to listen. Now National Green Tribunan (NGT) has added to the woes of the industry. Toyota has already told the NGT and courts that NGT orders on banning diesel car productions with Euro IV and VI specifications are virtually death penalty for the automobile industry. The government has come out with the statement that cars cannot be junked even after 15 years if found fit.

But 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.

The summary may look a little far-fetched. But their behavior certainly is Tughlaqi and against the basic laws and requirements of a society that is trying to unshackle the chains that had given this country the epithet “licence-permit raj”.

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. This has happened mostly without any help from the government. It calls for a closer interaction, that Modi says he wants, with “modern farming community”.

Weaning 80 crore 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 sanguine impact all over the economy, rural growth, urban stabilization and check on migration. It is no space for competitive politics.

Even other political formations howsoever opposed to the government should sit together to change the basics. The days of opposition for the sake of it is 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.

 

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