- In the recent past a report indicates the falling value of wage labour against the accumulation of wealth as dividends and share capital. Another report hints towards the dismal conditions in which Indian workers are forced to work and eke a living.
- An ILO report estimates that over 77% of the active workforce (not counting the unemployed) will be in vulnerable employment by 2019. ‘Vulnerable employment’ is defined as as self-employed without paid employees and contributing family workers. In India ‘vulnerable employment’ encompasses contractual workers in the organised sector and workers in the unorganised sector.
- Grave conditions exist in which the workers, producing high value branded garments, are forced to work in Bangalore. It also reports that women are lured by false promises of wages and held under pressure to work for low wages.
- A major labour reform is being pushed by the corporate sector to formalise the contract labour system that enables ‘fixed-term employment’ by industries. The new labour rules would allow the companies to shift the risk of the business cycle on the workers. This allows companies with less than 300 workers to close down or retrench workers without prior notice and approval. Presently in most states, the limit is set at below 100 workers.
- The complex tax regime with multiple exemptions leads to a skewed burden of taxes. It identifies that apart from allowing larger companies to pay a much lower rate of tax than smaller companies, exemptions for accelerated depreciation incentivises capital-intensive production rather than the use of labour. The effective tax rate for companies with turnover less than Rs. 1 crore is above 30% while companies that make over Rs. 500 crores pay less than 26% in taxes.
- The UK - India Business Council (UKIBC) and the Confederation of British Industry have together written to the Indian government seeking a lowering of corporate taxes and implementing reforms to further dilute labour laws. The lobby groups have argued that such measures would improve the ease of doing business in India and also help increase British investments in India.
- The workers had been working in abysmal conditions for meagre wages ranging from Rs. 6000/- to Rs. 10000/-. The reasons for accidental deaths go beyond violations of norms but is more systemic. Women suffer disproportionately as they are exposed to informal work. A labour activist points out that labour laws are brazenly violated.
- Trade unions have staged demonstrations and road rokko in various cities of Tamil Nadu voicing their dissent against the central and state government’s economic policies. The demands included a raise in minimum wage to a living wage, end to contractualisation and ‘anti-labour’ policies, the protests focussed on price rise, hike in transport fares in Tamil Nadu and the dismantling of the Public Distribution System which has been the hallmark of the welfare system in Tamil Nadu.
- Belying the opinion that India is creating far fewer jobs (or even bleeding jobs), a new report, published by a professor of economics at IIM Bangalore and Chief Economic Advisor of SBI, has concluded that we are headed towards creating 7 million (70 lakh) jobs by the end of the financial year 2017-18. This has led to a furious debate over the issue of job creation in India in the last few years.
- The biases that could have crept into the data is that the threshold of 20 employees for EPFO registration might lead to a false growth when a company that has 19 workers increases its payroll by 1. While the net increase is just 1, EPFO will record a growth of 20. It also does not delete accounts immediately when jobs are lost. An amnesty scheme announced two years back has brought in many workers into the ambit. This cannot be claimed as new employment. Thus, EPFO is not the best source to estimate net growth in jobs.
- It is argued that at a time when the economy has been jolted by shocks such as Demonetisation and GST implementation that have adversely affected the unorganised sector, it cannot be ‘wished away’ by cherry-picking data.
The attitude of our central & state governments to dole what ever concessions MNCs ask to set up their manufacturing units in the name of generating some jobs and indirect economic benefits is fundamentally defective. These industries apart from tax concessions will have to be given land at throw away prices ruining the poor farmers but also precious resources like water & electricity are to be diverted for their use. The pollution and climatic impact and industrial waste dumped in our land fills is incalculable. The cultural impact is another thing. If these negatives are loaded to the benefits, the net benefit would be negative. Labor reforms exposing workers to be exploited by these industries is nothing but height of insanity. Unlike IT employees these workers whenever they are retrenched getting alternate jobs wouldn't be easy and the agony they and their families undergo in the absence of robust social security is unimaginable. Therefore we should do what ever is good for our society especially poorer classes. No point in solving one problem and creating a much bigger problem.
