70,000 jobs lost in Q2 FY16 on dip in exports: Report

Nearly 70,000 workers were retrenched during the second quarter of 2015-16 due to sharp fall in merchandise exports, a report says. The joint study by Assocham and Thought Arbitrage noted that “sharp drop in merchandise exports mainly contributed to a loss of 70,000 jobs during the second quarter of 2015-16,” reinforcing a crucial point that the employment generation has to be led by the domestic demand.

Decrease in livelihood opportunities in export units caused the retrenchment of around 70,000 workers during the said period, the report added. The textiles sector was most affected witnessing a massive drop in contractual employment as outward shipments shrank, it said.

Besides, slowdown in global demand also compelled some of the units to retrench people from payroll. “There is a concern because most of the export-oriented units in the economy are dependent on contractual workers. So massive reduction in contractual jobs in these sectors might imply deteriorating conditions in the export units,” the report said.

Apart from marginal addition in jobs in the leather sector, as many as seven sectors saw drastic retrenchment in both regular and contractual employment. The study propagates that Indian economy has to look internally at its domestic scene to restart the growth story, which is only possible if there is extra demand generation within the economy. 

India’s exports declined for the second consecutive month in August by 0.3 per cent to $21.51 billion due to dip in shipments of products like petroleum and leather. The outward shipments stood at $21.58 billion in August 2015. Since December 2014, exports fell for the straight 18th month till May 2016 due to weak global demand and slide in oil prices. Shipments witnessed growth only in June this year only to again enter the negative zone in July.

Meanwhile, labour ministry is likely to move a Cabinet note on the Labour Code on Industrial Relations (IR) for its approval this week. The ministry has completed all the formalities on the Code including the opinion of the Law ministry as well as tripartite discussions with trade unions and employers, a source said.

“Now it will be sent for the Cabinet approval as soon as this week. After approval, the Code will be put before Parliament for passage,” the source added. Code on Industrial Relations is one of the initiatives of the NDA government to subsume 44 labour laws into four broad codes -- Industrial Relations, Wages, Social Security and Industrial Safety and Welfare. IR Code proposes to make retrenchment easier for firms employing up to 300 workers as well as make it tougher to form a trade union. The bill seeks to combine Industrial Disputes Act, 1947, Trade Unions Act, 1926, and Industrial Employment (Standing Orders) Act, 1946 into a single code.

At present, companies employing 100 or more workers are required to seek government’s permission for retrenchment under the Industrial Dispute Act. Also, any seven or more members of a trade union can apply for registration of the Trade Union. 

The draft bill proposes that 10 per cent of workers shall apply (be applicant) for registering a trade union. The provision relating to easing retrenchment, lay off and closure norms and tougher rules for forming unions in the proposed bill has led to uproar by the central trade unions.

They went on a nationwide strike on September 2 last year as well as this year to protest proposed amendments to the labour laws, which the government says will improve ease of doing business.