‘We’ll have to fight this Government because it has only one Agenda – Ease of Doing Business’: AK Padmanabhan

Published: November 17, 2016 - 15:08 Updated: August 8, 2017 - 16:57

In a freewheeling interview with Hardnews, AK Padmanabhan, President of the Centre of Indian Trade Unions, talks about the growing unemployment in India, the drop in manufacturing, the challenges that labour in India is facing


Why is there growing unemployment? What are the unemployment figures right now? What are the major factors that have led to this situation?

We cannot go by the unemployment statistics of the government because even experts have questioned the veracity of the data, whether it be the GDP or the industrial production figures. Eminent public figures such as the former Reserve Bank of India Governor Raghuram Rajan, Vice-President Hamid Ansari and sometimes even the President himself have questioned these statistics. So all the talk about employment creation hasn’t amounted to much, and whatever employment has been created is in the so-called informal sector where the workers don’t have any statutory rights or benefits. But this is not the case with informal sector workers alone!

CITU does not have its own facts and figures; we rely on government data and the NSSO statistics. The numbers released show that there is no creation of employment. In 2015, according to the NSSO, 1.35 lakh jobs were created in five major sectors in one year. But nearly one lakh young people enter various service sectors every month. So one or one and a half months’ of job creation is not enough.

The problem is of employability as well.

The way the problem of employability is tackled is by blaming it on lack of skills or a skilled workforce. They say graduates and technically qualified engineers cannot be employed. This, however, is a different problem altogether: that of our educational system and the way the colleges and institutes are run. These institutions run without basic infrastructure. We hear how medical colleges are run without hospitals and engineering colleges without laboratories or workshops. We have been hearing about ‘skill development’ from 2008-09 onwards; Dr Manmohan Singh and Ratan Tata are the ones who designed this scheme, it is not Modi who was behind this initiative.

The relationship between skills and jobs is a complex one. The question is, when will the jobs be created? Jobs will be created when there is a market and people are ready to purchase things. It is related to the purchasing capacity of the people. If there are wages, there is employment. Currently, it is a vicious circle. NITI Aayog Vice-Chairman Arvind Panagariya, to push forward India as a destination for manufacturing and establishing businesses, said we have 2-3 times lesser wages than China. I ask, is that a good thing?

The question then arises, to have more productive industries what is the existing capacity utilisation of Indian industry? In the past few months we have found that everything is in surplus, from coal to power! And capacity utilisation is down. What does that mean? While there is an abundance of materials, jobs and production don’t seem to be rising. How do we see this manifest itself in everyday life? Despite the surplus, our people don’t have enough clothes, medicines and consumer goods. Malnutrition still persists and growth of children is still stunted. Despite schemes such as the Integrated Child Development Scheme (ICDS) and the mid-day meal scheme the health of the average Indian child hasn’t improved.

And the question of unemployment is related to the capacity of people to purchase and that is related to the income and the total products produced in the country. This also points to the glaring disparity in the concentration of wealth creation, which now more than ever is in the hands of a few.

Which is the biggest sector witnessing unemployment?

There are two things. One is job loss, those who are already employed are losing jobs. The other is that sectors with potential for job creation are largely unable to do so. Except for the automobile sector where the cars are going out to other countries because they came here for cheap labour. What is happening in the steel industry, in coal and other engineering sectors?

In steel there is a dearth in the market. That is why the government intervened, declaring that there should be a minimum price and they have put import restrictions. People everywhere talk about free markets, but now a situation is arising where you have to intervene. I welcome it. Indian industry has to be saved. The crisis of Indian industry is what Cyrus Mistry is pointing towards, whatever foreign assets they have taken over are not doing well admittedly because of a global glut of steel.

There is no manufacturing sector. Machinery is not being made. There is little or no private investment in production. This tells us that everything is in the doldrums. There is nothing to show for all our efforts. The only thing that is going up are the figures for the GDP, the IIP, PMI or the core sector figures, which in reality are dropping. The factuality of the figures has come under major scrutiny because of what Mistry wrote. He alleged that there was massive fudging of accounts and figures of nearly Rs. 1 lakh or 1.6 lakh crore, which were cleared from the books. What all will come out of the fight between Tata and Mistry no one knows.

Everybody now admits that there is an undeclared recession. There is underutilisation of capacity. All the editorials and articles in different papers and dailies almost every day say that creation of employment opportunities is the biggest problem.


How is the growing unemployment manifesting itself in rural areas?

Rural areas are very critical, because already the peasants are in a bad state. The biggest crisis in rural India is the fluctuation in weather and prices: in one area there is flood and in another there is drought. Every six months you have shortage of tomatoes, onions, etc, and the next six months there is a glut in the market. One day the price is Rs 100 per kg and then it is not even 50 paise per kg.

In the rural sector there is an agrarian crisis, even according to the government there has been no increase in employment. The NREGS was created to ensure that the rural population doesn’t suffer. The government has stopped it; according to the chief minister of Tripura they are not getting money for the scheme. Previously it had created the highest number of jobs in the North-East tribal states. Instead of providing security all you are saying is ‘our gates are open, windows are open, come, invest, invest.’ According to a Bloomberg report, today the process of globalisation is walking backwards, not only in India but everywhere there is a serious problem. Neither is there a flow of capital or of labour. India is not only witnessing jobless growth but also job-loss growth.

Why are people losing jobs? Where are they losing jobs?

In all the sectors. There has to be more and more recruitment in the labour market. But what is actually happening is that all the graphs are coming down. All these sectors – steel, coal and other engineering sectors (except in the automobile sector) – there is job retention to some extent, our reports say that there is no increase in employment and many of the contracted casual workers have lost their jobs. Because of the growth in contractual and casual labour, which accounts for 60-70 percent of the labour force, many multinational companies have come to India. As a reaction to this phenomenon, the Supreme Court recently said you must ensure ‘equal pay for equal work’ and this ruling counts as law and is enforceable. This issue has been discussed for a very long time. One must ask, why has this decision come now? Because everything comes down to wages. The number of regular workers has gone down in every sector, including central and state governments, public sector, corporate India, everywhere. There is no security, no permanence and this is a cause of worry for many.

The informal sector is most visible in the MSMEs that have unorganised labour the unions don’t have control over. Reports of collapse of MSMEs are everywhere, how does it bode for these workers?

That is what the government is not accepting. MSMEs are no longer producing finished products. Very limited units of MSMEs are making the final finished products; in reality they are actually suppliers of raw materials, contractors or the outsourcing agents for the big companies. So when the production or the flow of capital comes down in the big corporate companies, naturally the MSME sector collapses. This would adversely impact employment, because the MSME sector is the largest employer.

Whatever they manufacture at the micro level, or in the case of the medium enterprises whatever they produce the market for it is reducing. People still spend the largest portion of their income on basic necessities and the other requirements will automatically fall. Now they are saying that the WPI is coming down a little, or the CPI is coming down a little, but actually what they calculate doesn’t even match what is happening on the ground. We have been saying for decades that the way you are calculating the Consumer Price Index is wrong.

In the rural sector, in MSMEs, in the corporate sector, there is a fall in production, and that impacts wages and that in turn affects purchasing power. Now they are saying that we should invest in infrastructure. The government is saying that the responsibility is on the private sector, but it’s not their duty! What happened to all the so-called PPPs? Where have they vanished? What is this push for privatisation? I’ll tell you, this is the government going back on its responsibility. Now, the only thing that hasn’t been privatised is the police department. 

How are the unions tackling the problems of unorganised labour?

The unionisation of unorganised informal labour is still at a lower level. My organisation has 60 percent of total members from the informal sector. But still, for 95 percent of the workforce in the informal sector, there are no statutory benefits, there are no legal rights, the employers promise ESI, social security, pension but in reality they get nothing. In some states such as Kerala and Tamil Nadu, to a certain extent there are welfare boards. While Delhi has a board, it is not utilising the money and that is the biggest complaint because from the Asiad time onwards money is collected from constructors – if you build a house or an office, you have to pay. The money amounts to hundreds and thousands of crores and they are not utilising it; they are using it for some other purpose and not for the safety and security of the workers. As far as the trade unions are concerned, we are fighting for a lot of issues. For the informal sector our main demand is the minimum wage, and then social security.

How did the September 2 protest go?

This was the 17th protest after the 1991 neoliberal policies. The number of participants has been increasing after every strike and protest. Upto 2009, INTUC and BMS (Bharatiya Mazdoor Sangh) were not with us. In 2015, BMS opted out at the last moment. A fellow worker called them ‘Bhaag gaya Mazdoor Sangh’ (the running away workers union). One thing we learned and have to admit is that nearly 40 percent of workers who joined the strike were not unionised workers. Because of issues of labour law amendments, minimum wage, contract price fixation, trade union rights being denied, unorganised workers demand various labour laws. All those workers and those employees who were not unionised workers joined us, prepared for a one-day strike. They gave up their wages for that day! We realised we haven’t even gone to those regions where they work, and that was a lesson for us. We consider it a weakness also, but opportunities are there. 

What were the sectors that showed up?

Actually from the industrial sectors of the country. The whole of Haryana, Gurgaon, Manesar, Bawana, upto the Rajasthan border, how many factories have unions? In that entire area they stopped work. The same thing happened in the Pune industrial area, the Nashik industrial belt, the Bengaluru industrial areas, where there are a lot of multinationals and corporates. It also happened in the industrial district of Telangana and SEZs (Special Economic Zones).

What is your plan after September 2nd?

It is a continuous process, it is an all-India strike. The biggest problem is disinvestment in the private sector by public sector companies. The new term is strategic sale. Even if the investment is small, the administration will be handed over to the private sector. That does not create employment, you see it in the Essar investment, the takeover of the steel companies in England by Tata…nothing generated employment, it’s just the top brass that changes. 

Steel plant workers have already started their struggle whether it is in Durgapur or Salem and these protests will be linked across several sectors because they all impact one another. So, as far as the trade unions are concerned we’ll continue and simultaneously take up our sectoral united movements.

Already, in the banking sector there is a united forum, and there is joint action in the insurance sector. In the public sector there is a joint platform for all the central unions. We are going ahead with that. And also in sectors like Anganwadi, ASHA and Mid-Day Meals we are trying independently. After September 2 we sat down for a discussion. But the government is not prepared to talk to the trade unions or to call the Indian Labour Conference. In 2015 they called a Conference but cancelled it in 2016. We’ll have to fight this government because it has only one agenda – ‘ease of doing business’.


(We would like to correct a mistake: In the Question on the September 2nd Protests: We mistakenly wrote AITUC, but instead it was INTUC.) 

Abeer Kapoor is a reporter, data visualiser and his interests are agrarian issues, politics and foreign policy. He has a masters in development studies and loves food

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This story is from print issue of HardNews