CALL US : 
WAPP : 
Despite the depreciation of the value of the naira and the anti-smuggling operation by the Nigeria Custom Service (NCS), checks by THISDAY have revealed an influx of imported ready-to-wear garments taking the value of smuggled apparel to a whopping $1.2 billion annually.
Stakeholders have blamed Nigeria’s porous land borders for the menace while manufacturers insist government failure to tackle the problem was responsible.
Also, there are concerns around the recent signing of the pact forming the African Continental Free Trade Area (AfCFTA) in Kigali.
Stakeholders within Nigeria’s textile, apparel and footwear industry opine that if the Federal Government of Nigeria (FGN) signs this agreement, it would have an adverse effect as it could accelerate the importation of cheaper imported textiles and garments.
However, analysts at FBN Quest have noted that the textile, apparel and footwear sub-sector remains the second largest contributor to Nigeria’s manufacturing (after food, beverage and tobacco).
“The sub-sector posted total output of N383bn ($1.3 billion) in Q4 2017 or 23.3 per cent of manufacturing gross domestic (GDP). The segment grew by 1.6 per cent year-on-year (y/y) in the fourth quarter of2017, compared with 1.1 per cent recorded in the corresponding period of the previous year. Given Nigeria’s huge appetite for fashion and related industries, the segment is still performing well below its full potential.
“Industry sources suggest that the country’s annual import bill for textiles and ready-to-wear apparel is $4 billion. Meanwhile, trade statistics from the National Bureau of Statistics (NBS) tell a different story, with imports of textile and clothing items of N37 billion ($121 million) in the fourth quarter, “said FBN Quest.
On what the federal government should do to stop the menace, the analysts stated: “We understand that the FGN has kicked off the creation of special economic zones (SEZs), starting with a zone for garment manufacturing. On a macro level, this should attract investment within the sector, boost output and assist with easing pressure on the job market.”
However, the NCS have blamed ignorance on the part of residents of border communities across the country for increasing smuggling of arms and contrabands.
The Controller, Federal Operations Unit, Zone ‘A’ of the Nigeria Customs Service (NCS), Comptroller Mohammed Uba stated this in a chat with THISDAY
He said that residents see smuggling as legitimate business and this remains one of the major challenges faced by the Unit in its efforts to curtail illegal border trades and other forms of smuggling.
He said the lack of knowledge is the reason why people see customs officials as enemies and sometimes attack them while they are carrying out their legitimate duties.
He however vowed that this will not deter the unit from performing its statutory responsibility of curbing smuggling.
While making reference to section 147 of the Customs and Excise Management Act (CEMA), Uba said the law empowers Customs to search any warehouse where there is reasonable suspicion that prohibited goods are kept there.
He called on the media to support the Service in the fight against smuggling by educating and enlightening the public on the dangers of smuggling.
“It is because of ignorance people living in the border communities feel and believes smuggling is a legitimate business. Customs is a constituted authority by the government but to our surprise, the whole community will just come and be attacking us. Because we collect tax, people see us as enemies.
“It is the media and some individuals who understand that smuggling is dangerous. So we must continue to educate ourselves and that is why we are soliciting the support of the media to educate people that smuggling is injurious to the economy.
“I have also been talking to my colleagues at the borders by advising them on customs community relation activity. We advise them and they set up such communities and advise them on what to do.
“Smuggling is a war not only for customs but all of us. For example, look at the issue of rice. What is the point bringing in rice when we can locally produce this rice or bring them through the port, this are some of the issues we are facing but that will not deter us from doing our work,” he said.
Archives
Concerns about the negative impact of technology on the labour market are not new.
As early as 1817, at the beginning of the first industrial revolution, economist David Ricardo explained how jobs in the English textile industry were being lost as a result of the introduction of automatic weaving machines.
The application of new technology in the economy boosts productivity, allowing companies to produce more with less. The gains in productivity reduce the need for workers, destroying existing jobs and occupations.
However, economists have also long held that technology supports job creation by raising the salaries of those operating it, and by making production processes more efficient.
Increased efficiency reduces the cost per unit of goods produced and also, therefore, their price. As a result, workers have more money in their pockets to spend, which creates more jobs in other industries.
Asia’s job challenge
Last month, the Asian Development Bank published its Asian Development Outlook 2018, with a focus on how technology affects jobs in Asia. But while the report seeks to explain the ways technology can foster job creation, it does not address how Asian leaders can solve inequalities resulting from technological changes. That is an essential challenge.
The Asian Development Bank argues that in Asia, the higher output facilitated by technology will create jobs because new occupations and industries will be created to meet the new demand of consumers.
To underpin its logic, the bank uses the distinction created by David H. Autor, which recognises that any given job consists of a bundle of tasks. These tasks can be classified into two dimensions: manual or cognitive; and routine or nonroutine.
According to Autor, the technical feasibility of automating tasks using machines and computers is higher for cognitive and manual tasks that are routine (see quadrants 1 and 2 in the illustration above). These are the kinds of jobs at risk of displacement by labour-saving technology.
Cognitive or manual jobs that are non-routine are “safe” because their tasks are difficult to automate. New technologies complement this labour, but does not substitute it.
As a result, the share of employment in high- and low-skilled occupations (mostly located in quadrants 3 and 4) is growing, while the share of employment in the middle-skilled, middle-paying occupations, such as accountants and machine operators, is being squeezed. It is in this category (quadrants 1 and 2) where most routine jobs fall.
Squeezing the middle class
To understand how this phenomenon is unfolding in Asia, the World Bank’s World Development Report 2016: Digital Dividends offers a useful description. The graph below, extracted from the report, displays changes in employment share in developing economies between 1995 and 2012.
It shows that, during the period, workers in developing countries left middle-skilled occupations (negative variation, in dark green), while the number of workers in low- and high-skilled jobs increased (positive variation, in light green).
While these changes might have had a positive effect on overall productivity, they also fostered inequality in the labour market.
The main issue is that middle-skills jobs, directly linked to the middle class, are disappearing. Employees in these jobs are moving either to high-skilled jobs that only very few qualify for (those with long experience and degrees), or to low-skilled jobs that face increasing competition and declining wages.
According to the World Bank report:
the jobs where workers are likely to lose out are disproportionally held by the least educated and the bottom 40% of the income distribution.
As a result, the biggest risk from the digital revolution is not massive unemployment, but the growth of income inequality.
Policy solutions
The Asian Development Bank suggests several policy solutions to this situation. It underlines that governments must act to enhance and adapt skills development, labour regulation, and fiscal reforms.
On the skills development side, despite growing access to educational opportunities over the past decade, the quality of education is still low in developing Asia.
The Program for International Student Assessment (PISA), a study led by the OECD that assesses educational systems, evaluates most Asian countries as “below” the OECD average for scholastic performance on mathematics, science, and reading. Basic education should be a priority to enable skills adaptability and encourage employment prospects.
With respect to labour regulation, the dominance of the informal sector in the region (60% according to International Labour Organization) makes policy interventions difficult. However, based on what is written in labour codes, the average level of employment protection in East Asia is actually higher than the OECD average.
The issue is the weak administrative and enforcement capacity of Asian economies. There are few initiatives designed to ensure domestic workers are operating under labour and employment regulations and laws in Asia, and there is still a long way to go to formalise these economies.
Finally, the Asian Development Bank recommends tax reforms that would involve broadening the tax base of these countries and/or improving their tax administration. Currently, the share of government revenue in GDP in many Asian nations is very low (in 2016, about 10% below the OECD average of 25%).
Latest figures from the World Bank show small improvements, but tax trends in Asia are clearly not skyrocketing. In addition, Asian countries face many fiscal issues, such as tax collection, tax evasion, and a large informal sector.
The need for political will
These reforms could support Asian countries’ efforts to deal with inequalities in their labour markets arising from new technologies. However, these measures take time and effort, which makes them difficult, politically and administratively, to implement.
The question is, then, whether Asian politicians and policymakers are to up to the task. This the Asian Development Bank report does not say.
The government has established cotton endowment fund with an initial worth of Rs 2.5 billion in order to create indigenous resources for conducting research and development activities in the field of cotton crop across the crop growing areas in the country.
The aim of the establishment of the fund was to generate internal resource to conduct research for producing high-yielding seed verities and innovative technologies to produce over 15 billion cotton bales annually, said Chairman pakistan Agriculture Research Council (PARC) Dr Yousuf Zafar.
Talking to APP here on Wednesday, he said prior to this cotton seed was the primary source of income, which was spent to meet the research and developmental expenditures of Pakistan Central Cotton Committee (PCCC).
He said the PCCC was mandated to conduct research and produce high yielding, disease resistant seed verities of cotton seeds and recommend the measures to enhance per acre crop production.
He said the amount being received from the millers on account of cotton cess was mainly used to fulfill the administrative expenses of PCCC, adding that many textile mills had obtained stay orders from the courts, which had also reduced the income through cess.
The endowment fund would help to generate about Rs. 600-700 million annually and it could be spent to meet the research and development expenditures despite asking the government for funds every month, he remarked.
The PARC further informed that pre-Central Development Working Party (CDWP) had been granted to the project and it would be presented in the next meeting of CDWP for approval for the establishment of the fund.
Meanwhile, he said the fund would help to bring more areas under cotton crop production, adding that this year area under cotton was expected to increase due to reduction in sugarcane prices and stabilization of commodity prices in local markets.
He said cotton sowing in China and US had witnessed sharp decrease, adding that Pakistan was importing 4-5 million bales to fulfill its domestic requirements and the initiative would help to bridge the gap between local demand and supply.
This year, he said government was also working on pro-active approach to enhance the per-acre crop output and stop the down ward shifting of crop production, adding that provision of certified seed and availability of pesticides were ensured by the government to exploit the existing crop production potential.
Dr Yousuf Zafar said government had also imported the trap-ropes from Japan to safe the crop from any possible pest attack and get maximum crop output during the season, adding that this traps were distributed among the growers free of cost.
Federal Minister for Commerce and Textile Pervez Malik met Sindh Governor Muhammad Zubair at the Governor House here.
The two leaders discussed in detail the economic development and promotion in the fields of textile and commerce as well as the steps taken to encourage the textile industry, investment in new textile industries, and other matters, said a press release issued here on Tuesday.
The Sindh Governor said Pakistan is rich in natural resources and human resource, and there is a need for maximum utilisation of these resources. He stressed the need for encouraging the people associated with the textile industry as well as investors to achieve the required results.
The federal minister told the Governor Sindh that steps for promoting and encouraging the textile industry at every level and attracting local and foreign investors towards this field are drawing positive results.
He said both local and foreign investors are investing in textile industry which is helping in the eradication of poverty and unemployment.
Bangladesh overtook China and India in ethical compliance in apparel segment on the back of improved workplace safety following pressure from international inspection and remediation agencies, according to a new survey.
“In particular, ethical scores in Bangladesh rose by an average of 15 percent during the past 12 months,” said AsiaInspection in its first quarterly report of 2018 released last month.
This was likely reflecting the continuous pressure to improve put on Bangladesh’s textile and apparel manufacturers by the industry groups formed after the Rana Plaza collapse in 2013, it added.
Hong Kong-based AsiaInspection is a global leading quality control and compliance service provider that partners with brands, retailers, and importers around the world to secure, manage and optimise their supply chain.
Particularly, after the collapse, there is no scope to run businesses without ensuring quality and ethics, said Mahmud Hasan Khan, vice president of Bangladesh Garment Manufacturers and Exporters Association, while commenting on the survey.
This is because all renowned retailers and brands such as H&M, C&A, Walmart, Marks & Spencer and JC Penney source from Bangladesh in bulk, he told The Daily Star.
More than 80 percent of the garment business is run through strategic partnerships with renowned brands, according to Khan.
He said if any kind of unethical and non-compliant things are found in the supply chain of global apparel business, retailers and brands have to explain it to their customers.
Every form of compliance related to social and environmental issues, production, workers’ welfare, workhour and working conditions is maintained in the supply chain, the BGMEA leader said.
“It is not possible to do business unethically now,” he said.
After the Rana Plaza collapse, two platforms were formed: the Accord, the platform of about 200 European retailers, and the Alliance, an agency of 28 North American retailers.
About 90 percent of the inspection and remediation of about 2,200 active garment factories affiliated with the Accord and Alliance have been completed.
Besides, 1,500 small and medium-sized garment factories are being inspected and monitored by the government.
The survey report—Q2 2018 Barometer: China unfazed by global trade stand-off, supply chains face new ethical concerns—is a synopsis of outsourced manufacturing and the quality control services industry.
Overall ethical audit scores in the first quarter offer some hope for improvement after a disappointing performance last year when there was a lower number of critically noncompliant factories.
“Time will show whether this quarter’s data represents a positive turnaround, with lasting improvement hinging on regular follow-up and timely corrective action,” said the report.
Ethical scores by industry remain disparate, with homeware in the lead with an average score of 8.3 out of 10, and compliance in bodycare and accessories sectors continuing last year’s downward trend.
“Meanwhile, audit scores of textile and apparel manufacturers have been rising since mid-2017, indicating that long-term improvement efforts may be finally bearing fruit.” Nevertheless, AsiaInspection data showed that factories are still plagued by health and safety issues, which were ranked the most pressing concerns in the first quarter, taking over working hours and wage compliance.
AsiaInspection is seeing strong demand for environmental audits, especially in China where brands and manufacturers struggle to comply with the new antipollution laws.
Pollution and waste management accounted for more than 80 percent of non-compliance found by AsiaInspection in the quarter, with more than two-thirds of them classified as major.
A comprehensive short-term policy, which includes adjustments of pattern of production, marketing and excise duty on cotton textiles, was announced by the Commerce Minister, Mr. Dinesh Singh, in the Rajya Sabha to-day [May 1, New Delhi] to relieve the present difficulty faced by the textile industry. Under the new scheme, the area of control has been reduced from 40 to 25 per cent. The controlled varieties will now consist of dhotis, saris long cloth, shirting and drill made in coarse and lower medium categories. The superfine, fine and higher medium categories have been taken off the control. A two per cent increase in the ex-mill price of the controlled varieties has been allowed, but this will not affect the consumer price, because it will be absorbed by the reduction in excise duty from 3 paise to 1 ½ paise per square metre and abolition of processing surcharge. In order to maintain the competitive position of decentralised sector vis-a-vis the mill sector, a corresponding reduction is being made in the processing surcharges applicable to coarse and medium handloom and power-loom cloth.
Rising EPFO registrations may not mean new jobs as savings and consumption data do not reveal any sharp uptick
Data provided on new registrations with the EPFO are useful insofar as being one of the indicators on employment. At present, getting authentic data on jobs is difficult because of the amorphous concept of employment, especially in the non-organised sector. In the corporate sector employment numbers are provided in annual reports.
The Central Government provides the same for its staff in various ministries in the Budget document, while the information on State governments and other government-related organisations are less transparent. The Pay Commission provides numbers, but that would be for the past and are not contemporary. It is here that the EPFO data add value because if the number of new registrations is going up, there must be reason to believe that more jobs have been created. But is it really so?
The EPFO data however could be also indicative of people already in the workforce getting enrolled by their employers. There could be switches from private EPF funds to EPFO. Also, with GST coming in and smaller units being registered with the tax authorities the formalisation process has also meant that the employees get registered with the EPFO as all this would go into preparing their tax statements and claiming tax exemptions.
If these numbers are large, then the 4.7 lakh being added in February 2018 or six lakh in January may not be presenting an accurate picture of fresh employment. Typically, most employment in the organised sector takes place when students pass out from their institutes in March or April. High numbers towards the end of the calendar year would be more on account of shift in jobs or currently employed getting registered.
While this ambiguity will remain, a way to link these registrations with EPFO and job creation is to go back to some intuitive questions. Typically when more people are employed, there should be a reflection in higher income being earned in the country. This should mean that the money earned is either spent or saved.
Mixed Picture
Production of goods typically purchased by the new labour force (growth %)
Sep-Feb Garments Media Players Compu. Mobile Tv AC Washing Machines Refrigerators Cars Two-Wheelers
2017 1.42 16.8 -52.0 20.2 -9.8 -2.0 12.4 6.2 13.7 -0.2
2018 -3.71 9.9 24.2 -2.9 -10.0 22.7 11.3 5.9 1.2 20.1
Source: CSO
Therefore, it would be interesting to see how the production of goods has been during the period September 2017-February 2018 relative to past years for some goods which would typically be purchased by the new labour force. Table 1 lists some of them. The three time periods taken are September-February 2016, 2017 and 2018 and the growth rates are calculated accordingly.
The table is interesting as it presents a fairly uneven picture. Typically one would expect new workers to spend on mobile phones, where the rate of growth is in negative territory compared with 2017. The same holds for garments which is top on the purchase charts of youngsters. Computers are an indicator of corporate activity in general and could mean more employees. However, this comes over a decline of 52 per cent last year and in value terms at ?825 crore is still lower than that in 2016 when it was ?1,384 crore.
Therefore, this does not look like growth due to employment. Two-wheelers is probably the more convincing indicator of higher growth with a qualification that the stagnation in 2017 was largely due to non-satiated demand due to demonetisation, which could have been recouped in 2017-18.
Another way of looking at higher employment would be whether or not they took loans for housing, vehicles, consumer goods, etc. Here too the answer is not very clear.
The table indicates that incremental credit was higher in the most recent period compared with 2017 with the number doubling. However, compared with 2015-16 there was an increase of 18.3 per cent. The drop in 2016-17 was due to demonetisation. But these retail loans are dominated by the housing segment, which is normally not the preference for fresh employees.
Incremental auto loans had increased from ?10,200 crore to ?12,450 crore, which could be loans taken by new workers as there is a tendency to own a vehicle once employment is procured. But the numbers are not very high to point to large employment generation.
The logical question is that in case individuals were not spending their incomes, were they saving the same.
The incremental deposits in 2016-17 were distorted due to demonetisation and were high. But the amount in 2017-18 is much lower than that in 2015-16 too, meaning thereby that if a very high number of new jobs were created, the savings do not reflect the same. A similar picture is seen for mutual funds.
The discussion on whether new registrations with EPFO are indicative of more jobs being created will be an ongoing one. Based on the use of income earned through employment, the available data on both consumption — as denoted by production of specific products which find favour among this group — as well as savings do not reveal any sharp uptick.
No conclusive proof
In that case, the question to be asked is what is happening to the money, which is being generated by these new jobs? Based on this analysis, there is a tilt towards the belief that these registrations may not be conclusive to show that jobs have been created. The fact that these months are not normally the recruiting season for companies is also significant.
Growth in value addition as per the GDP would provide broad indications of job creation. This would mean acceleration in the growth rate. The fact that GDP growth this year would be lower than that in FY17 would prima facie indicate that there cannot be acceleration in employment growth.
The present array of GDP numbers under the new methodology is lower than those under the earlier one by at least 1-1.5 per cent. Growth has to be upwards of 8 per cent to convince that jobs are really being created. The EPFO data, though encouraging, do not look that assuring when analysed this way.
Jute mills may close for want of orders
Union Textiles Minister Smriti Irani has sought the intervention of her counterpart at the Consumer Affairs, Food and Public Distribution ministry to help stave off the risk of jute mill closures by increasing orders for jute sacks for packaging foodgrains.
“I wish to draw your attention to the fact the jute industry is facing shortage of jute bag orders,” Ms. Irani wrote to Ram Vilas Paswan, in a letter dated April 26, a copy of which has been seen by The Hindu. The issue was flagged earlier by the Textiles Secretary, who had written to his counterpart in the Consumer Affairs ministry saying that the problem had its genesis in the request made by the Consumer Affairs ministry to the Textiles ministry seeking dilution of the Jute Packaging Mandatory Order (under the Jute Packaging Material Act, 1987) in favour of the HDPE/PP bags sector.
Responding to the February 8 request from the Consumer Affairs ministry, the Textiles Ministry had granted a relaxation of 2.58 lakh bales for HPDE/PP bags based on a projection of bag requirement for foodgrains packaging and an anticipated shortage of supply of jute bags. “This relaxation was given to ensure that the food-procurement programme is not affected due to the anticipated shortfall in supply of jute bags till March 31,” the official wrote on April 24. The Secretary also noted that subsequently the total requirement till April was projected at 16.7 lakh bales, of which the order for jute bags was put at 13.68 lakh bales. The jute industry had already met 93.4% of this order.
‘Not in tune’
The Textiles ministry contends that the total bag requirement (including HDPE) was now being put at only 15.6 lakh bales and that unless the order allowing the use of HDPE bags was withdrawn the jute industry could be hit.
“It appears that when we met in February 2018, the supply projection for jute bags was not in tune with ground realities, which led to the dilution of the packaging order,” the Textiles Secretary wrote, urging the Food ministry to rescind its decision allowing HDPE bags supply.
Highlighting this imbroglio, the Jute Commissioner too wrote a letter to the Director Food and Public Distribution on April 19, saying that the Textiles Ministry had agreed to dilute to the extent of 2.58 lakh bales as Secretary (Food) had said there would be a shortage of jute bags to this tune.
“There is no shortage of jute bags and the decision to procure synthetic bags should be reviewed,” the letter said.
JPMA was enacted to protect the interest of raw jute farmers and workers involved in the production of jute goods by compulsory usage of jute bags for supply and distribution of commodities.
Although it started with 100% reservation for foodgrains and sugar and 70% and 50% for cement and fertiliser, over the years this was diluted. This is annually decided by Centre on the basis of the recommendation of Standing Advisory Committee, a statutory body, currently it is nil for fertiliser and cement and 90% for foodgrains and only 20% for sugar.
Scientists report high incidence of bollworms, poor yield
“Crop is at flowering to boll formation stage, grown in black cotton soil. Profuse vegetative growth to the height of above six feet due to sufficient rainfall and application of N-fertilizer was observed. Farmer did not apply K-fertilizer. According to farmers, proper plant protection measures were taken against sucking pests. Somehow incidence of pink bollworm was noticed below Economic Threshold Levels (ETL). Though vegetative growth of the crops was normal, number of bolls per plant on an average was very low, 10 to 15 only, which will affect the final output. Hence, the concerned seed company personnel can be called for explanation about the crop performance,” was the report submitted by A. Srinivas, coordinator, DAATTC after visiting the field of one Narayana of Allapur village in Munipally mandal on November 9, 2017.
Narayana had cultivated Ajeeth seeds in two acres and sowing took place in the first week of June, 2017. This is only an instance of the disastrous picture of cotton crop that became evident in the beginning of this year and which has resulted in the suicide of at least six farmers. In January, 2018, B. Ram Prasad, Senior Scientist, Cotton Entomology, Regional Agriculture Research Station (RARS), Warangal and V Bharathi, Principal Scientist, Pathology, Seed Regulation Testing Cell (SRTC), visited fields of six farmers in Kondapur, Munipally and Sadashivapet mandals and studied the performance of cotton crop.
In almost every field they found that the yield reduction was between 25 per cent and 60 per cent as there was less number of bolls due to the poor performance of hybrid seeds. “It is observed that primarily, the crop growth is luxuriant in all fields because of heavy seasonal rains followed by high temperature, closer plant spacing and high fertilization. The team could not compare these hybrids with other similar hybrids/fields as they did not exist in the near vicinity to check their performance. Further, incidence of pink bollwarm is also another reason for apparent yield loss,” observed the scientists.
However, the DNA reports of four out of the five samples collected by the authorities confirmed the prescribed minimum genetic purity standard of 90 per cent for cotton. Only one report was adverse.
Report of another sample was yet to be received by the officials. “ The weather conditions were playing havoc in the lives of farmers. Four out of the five DNA reports showing the genetic purity indicate this. Farmers were failing to sow non-BT seed supplied along with BT, which will act as ‘refuge’. This was one of the reasons pink bollworms are becoming pesticide resistant,” observed an agriculture officer.
Given how India is fast losing its competitive edge in exports, and enterprises at home are increasingly automating operations, it is unfortunate the government doesn’t think it important enough to move on critical labour reforms.
Given how India is fast losing its competitive edge in exports, and enterprises at home are increasingly automating operations, it is unfortunate the government doesn’t think it important enough to move on critical labour reforms. After four years of inaction, news reports suggest the government no longer wants to talk tough and would rather change those laws that placate the labour unions. For instance, the Draft Code on Wages, 2017, which seeks to usher in the concept of a statutory minimum wage, and which was introduced in the Lok Sabha in August, 2017, could soon become law. This would suit both the government and the Opposition a year ahead of the general elections as would a universal social security scheme and changes that relate to more benefits for workers without hire-and-fire.
To be sure, the government has amended the Industrial Establishment (Standing Order) 1946, which allows fixed-term work workers across sectors—earlier, this option was available only to apparel manufacturers. This will no doubt give companies more leeway, but going by the limited traction in the textile sector—where less than 700 units have used the package since 2016 to create some 1.55 lakh jobs—the impact could be limited.
Watering down key legislations sends the wrong signals. The crucial Labour Code on Industrial Relations—already diluted to pacify labour unions—is now unlikely to see the light of day. The government had first sought to allow companies to lay off 300 workers without approval but later abandoned the idea saying it would stay with the current level of 100 workers. Ideally, the threshold should be 1,000 persons.
The government needs to understand that companies, even smaller establishments, need to be able to hire and fire, or they will simply stop relying on permanent work-forces. In fact, the Centre had also objected to proposals from Madhya Pradesh to exempt micro industries—those with an investment not exceeding Rs 25 lakh—from the purview of seven central laws, including the Contract Labour Act and the Factories Act, even though the state had pointed out that small factories were unduly subjected to harassment.
At a time when the economy has been slowing, the government should have made it easier for business enterprises to hire. The KLEMS India database shows a contraction in the workforce between 2013-14 and 2015-16, with about 1.2 million jobs being lost and the total employment down from 483.9 million to 482.7 million.
This ties in with the poor growth in sectors such as exports during this period. As has already been pointed out, countries with more practical labour laws such as Bangladesh have been growing their share in the global textile market at India’s cost. The government may cite subscriber additions to the EPFO to claim millions of new jobs have been created but few are convinced.
