Un­der­mined by the cow

Modi's am­bi­tion of turn­ing In­dia into an eco­nomic pow­er­house has been de­railed by his party's ide­ol­ogy

Down to Earth - - LAST WORD - LATHA JISHNU

DIS­TRACTED BY his yen to play a lead­ing role on the world stage, Prime Min­is­ter Naren­dra Modi has had lit­tle time for the econ­omy and the man­i­fold prob­lems that it is strug­gling against. These are the kind of prob­lems that re­quire sus­tained at­ten­tion and a dy­namic lead­er­ship. That is miss­ing, and not all the spin that the govern­ment excels in can hide the econ­omy’s dis­mal per­for­mance.

For the man who rode to a land­slide vic­tory on the prom­ise of bet­ter prospects for the young, Modi has been rather re­miss in tack­ling the big­gest chal­lenge fac­ing In­dia: too few jobs. In­dia’s de­mo­graphic bulge means that it needs to cre­ate vast em­ploy­ment op­por­tu­ni­ties for the 12 mil­lion young peo­ple en­ter­ing the job mar­ket ev­ery year in ad­di­tion to those al­ready in the work­force with­out gain­ful em­ploy­ment. In­stead, there has been a re­gres­sion. Lat­est fig­ures re­leased by in­dus­try re­veal a wor­ry­ing new trend. The econ­omy has been shrink­ing and shed­ding jobs in­stead of cre­at­ing new ones.

One rea­son is the poor per­for­mance on the ex­port front. A sharp drop in mer­chan­dise ex­ports has led to mas­sive job cuts across sec­tors, a sit­u­a­tion that is ex­pected to ac­cel­er­ate as some man­u­fac­tur­ing units go in for au­to­ma­tion—re­plac­ing the labour force with ro­bots. This is dou­ble whammy. A just re­leased re­port by in­dus­try or­gan­i­sa­tion As­socham says the de­cline in mer­chan­dise ex­ports ow­ing to a slump in global de­mand has re­sulted in a loss of 70,000 jobs dur­ing the sec­ond quar­ter of the cur­rent fi­nan­cial year. That is, in just three months. Of par­tic­u­lar con­cern, it says, are the large-scale re­trench­ments that have been fa­cil­i­tated by the shift to­wards con­tract labour. “….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 as well im­ply de­te­ri­o­rat­ing con­di­tions in the ex­port units,” the As­socham re­port warns.

While global con­di­tions might be one rea­son for the bad news, here is an in­struc­tive story of how the Modi govern­ment’s ide­o­log­i­cal pur­suits are ac­tively deep­en­ing the gloom on the job front. As the PM al­lows the storm troop­ers of saf­fron out­fits to run amok with their gau rak­shak or cow protection an­tics, yet an­other sec­tor of ex­ports, leather and leather goods, is tak­ing a beating.

With cat­tle trade prac­ti­cally at a stand­still and the skin­ning of even car­casses be­com­ing a life-threat­en­ing ex­er­cise, the avail­abil­ity of hide and skins has dropped sig­nif­i­cantly, ac­cord­ing to in­dus­try re­ports. The Coun­cil for Leather Ex­ports, the apex body for the leather in­dus­try, has re­ported a 10.14 per cent drop in busi­ness year-on-year be­tween April and Novem­ber 2015. And what does it blame for the poor show? The beef ban in Ma­ha­rash­tra which has re­duced the flow of raw ma­te­ri­als to tan­ner­ies across Tamil Nadu, the coun­try’s largest leather-ex­port­ing state.

The slow­down came at a time when ex­porters should have been mak­ing a killing be­cause of the stronger dol­lar. But the govern­ment does not ap­pear to be los­ing any sleep over these de­vel­op­ments. Nei­ther Modi, caught up in new for­eign pol­icy tan­gles, nor his chief min­is­ters have tried to rein in the cow pro­tec­tors whose ter­ror strikes against cat­tle traders con­tinue.

Mean­while, there are fur­ther signs that the world is not par­tic­u­larly en­am­oured of In­dia’s flag­ging growth story. Moody’s In­vestor Service in­di­cated on Septem­ber 20 that it is un­likely to up­grade In­dia’s sov­er­eign credit rat­ing—it is the low­est in­vest­ment grade rat­ing—any­time soon. Global an­a­lysts think the sharp dip in growth is putting a ques­tion mark over the world’s fastest growing econ­omy to cre­ate a sig­nif­i­cant num­ber of jobs. To cre­ate the kind of em­ploy­ment open­ings that Modi promised vot­ers two years ago, In­dia needs to notch up dou­ble digit growth. For that, we might have to wait till the cows come home.


Newspapers in English

Newspapers from India

© PressReader. All rights reserved.