ash blitz for jobs
- Govt plans package to cushion global blow
JAYANTA ROY CHOWDHURY AND R. SURYAMURTHY
New Delhi, Nov. 9: The Manmohan Singh government is planning to spend up to Rs 25,000 crore on infrastructure and the employment guarantee programme to boost growth and create jobs for people it fears will be thrown out of work because of the global economic crisis.
What India is thinking of, China announced today. Beijing has approved a $586 billion (Rs 28 lakh crore) government spending package to boost domestic demand and help the world’s fourth-largest economy ride out the credit crisis, Xinhua news agency said. (See Business)
Officials in Delhi said a high-level group of ministers set up by the Prime Minister to review the economy will not only interact with industry to address its grievances but also work out a spending plan to boost growth.
“The main concern of the government is to carve out savings from existing schemes and programmes and divert this money into spending that would create jobs for unskilled, semi-skilled and skilled workers… this can be called our version of the Roosevelt New Deal plan,” an official said.
New Deal was the name US President Franklin D. Roosevelt gave to a series of programmes he initiated with the goal of giving work to the jobless, reform of business and financial practices, and recovery of the economy during the Great Depression.
The Indian government believes it can spare up to Rs 25,000 crore, though the farm loan waiver has added to the burden of the exchequer. Prime Minister Manmohan Singh and commerce minister Kamal Nath have asked industry not to lay off workers, and sops are believed to be linked to promises of holding on to current work force levels.
But the Centre fears that while the organised sector might not see too many pink slips, given the country’s strong labour laws, the export-oriented unorganised sector will be hit hard as orders from traditional markets drop.
Thousands of small garment firms, gem cutting and polishing centres and goldsmiths are likely to be affected.
“Job loss in the range of 6-7 lakh is likely in the next two-three months as units are closing down or operating on sub-optimal capacity because of fall in demand, both in the domestic and international markets, and liquidity crunch,” said R.K. Dalmia, chairman of the Confederation of Indian Textile Industry.
The textile industry employs some 35 million people.
“Mills are running for hardly 3-4 days a week, or operating just 75 per cent of their capacities or have reduced shifts from three to one,” Dalmia said.
The slowdown in the realty business is also expected to hurt construction firms, who may be forced to lay off temporary workers.
The export sector has suffered up to 70 per cent negative growth, Ganesh Kumar Gupta, president of the Federation of Indian Export Organisations, said.
Tea (-20 per cent), handicrafts (-70 per cent), carpets (-32 per cent), oil meals (-50 per cent), man-made yarn (-17 per cent), cotton yarn (-19 per cent) and marine products (-19 per cent) have all taken a hit, he added.
The gems and jewellery trade is believed to have shed up to 50,000 jobs — most of the workers, from states like Bengal, Orissa and Andhra Pradesh, were on contract.
Mukhtarul Amin, chairman of Council for Leather Exports, said orders for the next fiscal have declined by 15 to 20 per cent and this could slash jobs. The labour-intensive leather industry employs about 2.5 million people.
Officials said it would be tough to monitor or stop job losses in the unorganised sector. The government is preparing a package for exporters, they added.
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