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Pro-business and pro-poor

Pro-business and pro-poor
Witty Paul advised Basu to shift his government’s focus on creation of thousands, if not lakhs of employers. The latter would automatically recruit employees in various skills. The period was the early1980s. Bengal was saddled with an unprecedented industrial exodus and sickness mostly due to the Congress government’s freight equalization policy on coal and steel that robbed Eastern India of its natural advantage of the proximity to those vital raw materials, which once made the region the country’s hub of heavy industry, steel and iron making, ordnance factories, electricity generation, shipbuilding, railway wagon manufacturing and engineering outfits, also partly with labour unrest rooted in falling financial and business fortunes of other industries due to dwindling demand for their products and high cost of other raw materials such as petro-chemicals and cotton that came from Western India carrying high freight cost.

Paul asked Basu why did Kolkata have only one Apeejay’s Park Street-centric ‘Flurry’s’ cake-pastry shop and not 100 of them spread over all big municipal corporation wards. Basu was quick to grab friend Paul’s unsolicited advice. That followed the shift in the Left Front government’s industrial policy focus from predominantly large units to medium, small and micro-level enterprises (MSMEs). The latter proved to be a big success and became a major employment generator in the state ever since.

Neither Basu, nor is Paul alive today. But, Paul’s prophetic statement became true. Bengal is now a hub of the country’s confectionery industry, hosiery, low-cost apparels, handloom and power-loom, jute carpets, leather, home décor, electrical goods with the charge led by new generation MSMEs, creating lakhs of jobs and some even boasting top national brands such as Emami, Boroline, Bisk Farm, Monginis, Dollar, Lux Cozy, Manjusha, Patton, etc.

The latest Congress and other political criticism of Finance Minister Arun Jaitley’s honest admission that ‘my budget is pro-business and pro-poor’ is unwarranted as also uninformed. The minister might have deliberately skipped the stress on job creation simply because it is the new businesses and enterprises that will automatically generate employment. Jobs don’t fall from the sky. Employers create them. Industrial and social infrastructure; smart cities; broadband expansion; e-governance; deeper life and health insurance penetration; local manufacture of defence hardware and software; MSMEs, including start-ups and cloud business; electronics gears manufacture; IT and ITeS; e-tailing, banking services expansion and higher financial inclusion will automatically create millions of new jobs in the country if the NDA government is able to translate its vision of development into action.

Ironically, foreign investors have been able to read the government’s development push correctly as it is reflected in the movement of the stock market. Unfortunately, political skeptics in the Opposition have failed to rightly assess the new development agenda and its positive impact on business – big and small, from manufacturing to trading of all sizes and shapes. One can’t entirely blame the skeptics altogether as the economy stood near-standstill during the last three years, as if suffering from a kind of political elephantitis, lacking speed, direction and will to win, with the virus of corruption plaguing the polity and administration, eating into their vitals.

However, there is a need for caution. The ruling NDA, its political opposition and all others must ensure that the massive development push does not lose sight of the interest of workers, employer’s liability and the government’s additional responsibility towards the vast unorganized workforce that the new model will usher in. Most jobs under the new dispensation will be less secure, less remunerative at lower levels, exploitative and fragile in nature. They could be contractual, temporary, seasonal, part-time with odd hours and more hazardous. While the government is talking about substantial amendment of the labour law, the protection of a worker’s living wage, social security concerns, including healthcare, lay-off allowance, housing, transport assistance, children’s education, accident or disability compensation, superannuation benefits, etc. must be ensured to enhance the dignity of labour and save them from ruthless exploitation by employers.  

Amid the worst economic slowdown in over a decade, Finance Minister Arun Jaitley will have to come out with all guns blazing if he is to take the menace of unemployment head on.  Over the seven years (2004-11) under the UPA government for which data is available, the economy created only 17 million jobs -- far lower than the 60 million jobs created under the five previous years of the NDA rule. The UPA’s dismal jobs record mocks at the fact that about 12-15 million people enter the job market every year. The unemployment level is already very high. The new NDA government faces a high asking rate on jobs right out of the gate. Economic revival and speedy implementation of development projects can help create as many as 150 million jobs in the next 10 years, CII President Ajay Shriram had recently said.

‘The industry is looking for top policy steps such as introduction of GST, easing of interest rates by 100 bps, keeping subsidies at 1.7 percent of GDP, and restructuring of labour laws to promote mass manufacturing, he said.’ Any improvement in the overall economy -- higher GDP growth, low inflation that facilitates an easier monetary policy, etc -- will help boost business sentiment and lead to more jobs, but Jaitley will also have to get the finer details on policy right in order to give hiring a fillip.
The BJP’s manifesto was not short of ideas on bringing about a jobs revolution in the country.

The manifesto had set sight at creation of 10 million jobs a year. The party is totally focused on domestic manufacturing, partial import substitution and business-led development. It is ready to tackle the tricky issues of labour laws, which are archaic, complicated as well as ineffective, that need to be changed to protect the rights of both employers and employees.

The BJP government is already off to a significant start. Its recent proposal inviting ‘feedback’ to amend the Factory Act is seen as a step that will fight ‘inspector’ raj, boost long-term investments and promote a hiring mode tailored to meet the needs of new businesses such as clouds, e-tailing, domestic Seven-Eleven retail chains. If the government is able to translate its development dreams, by the time BJP and its allies prepare for the next Lok Sabha election, the population of India’s current middle-income group, which had actually shrunken by about two million in the last three years of economic slow-down, could grow by nearly 100 per cent to 350 million, making Indians as second largest spenders after the Chinese in the ‘wannabe’ category. Dream merchant BJP is expected to go after every opportunity to continue to capture the imagination of Indian youth, its key vote bank.  IPA

Nantoo Banerjee

Nantoo Banerjee

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