Gujarat's manufacturing sector employment slips into negative; growth rate falls below five per cent

By Rajiv Shah 
Much against the loud claims of the Gujarat government of the state being No 1 in providing jobs in the country, latest figures, made available in the state’s new budget documents, have made the drastic revelation that employment opportunities in the organized manufacturing sector, instead of increasing, have actually decelerated. The document, “Development Programme 2013-14”, released in the Gujarat state assembly, shows that in one year, between June 2011 and June 2012, there has been a deceleration in the total number of employed persons in the organized manufacturing sector by minus ( -- ) 0.68 per cent. In fact, figures suggest that this deceleration has come about in the aftermath of steady fall in employment growth in the sector over the last five years. Giving separate figures for private sector and state and central public sector undertakings (PSUs), and sourcing them from Gujarat’s district employment exchanges, the figures show that as of June 2012, there were in all 6,43,630 persons employed in the organized manufacturing sector, down from 6,48,196 a year earlier. The breakup provided in the document suggests that there was a very negligible increase of 0.35 per cent in private sector employment from 5,54,126 to 5,56,038 workers, compensated by the decline in PSU employment.
Significantly, the deceleration has taken place after 3.15 per cent rise in jobs in the sector in the correspondent period of 2010-11. In 2009-10, there was a rise of jobs by 8.85 per cent, of 2.02 per cent in 2008-09, and of 16.86 per cent in 2007-2008. Interestingly, the figures have been released in an exercise to demonstrate how local Gujarat-based workers – both of the supervisory and non-supervisory cadre – have been fairly well represented both in private sector as well as in the PSUs, as required by a Gujarat law of 1995. This has ostensibly been done in order to counter the criticism from certain quarters that Gujaratis are being “neglected” in state-based enterprises.
Deceleration in employment in the organized manufacturing sector last year has come about at a time when Gujarat’s gross state domestic product (GSDP) in the manufacturing sector, too, showing a sharp fall in the last five years. In fact, the growth fell well below five per cent in 2011-12, for which figures have been made available by another Gujarat government budget book, “Socio-Economic Review, Gujarat State 2012-13.” Of the five years for which figures have been offered, only in one year, 2009-10, GSDP in the manufacturing sector grew by a whopping 25.67 per cent.
Year-wise breakup shows where things stand: While no figures for 2012-13 have been made available by Gujarat’s budget documents, in 2011-12, Gujarat’s GSDP in the manufacturing sector grew by just 4.21 per cent, in 2010-11 by 5.13 per cent, in 2009-10 by 25.67 per cent, in 2008-09 by 4.27 per cent, and in 2007-08 by 7.87 per cent. There is no explanation either in the “Development Programme” or the “Socio-Economic Review” as to why this has happened. In fact, if there is anything in the reports, it is eulogy of the way the state economy has been performing, especially because of the biennial Vibrant Gujarat summits.
In fact, the latest “Development Programme 2013-14” omits the chart that would show year-wise figures of overall employment scenario (consisting of not just the manufacturing sector but also other sectors) in Gujarat. The previous editions “Development Programme” would provide these figures, and not without an explanation. The “Development Programme 2012-13” says, to quote from the document, “Total employment in the year 1990 was 16.22 lakh, while in the year 2011 it is 21.00 lakh. In these twenty one years, 4.78 lakh employment increased, being 29.47% rise.” It where the reality lies – per annum growth in employment for the 21 years for which figures were provided was merely 1.40 per cent! No explanations are given as to why this is so. On the contrary, there is nothing but eulogy on how Gujarat is faring much better than other states on the jobs front.
In a self-praise mode, “Development Programme 2013-14” says the state government has “signed MoUs with various industries during December-2009 IT Seminar, Vibrant Gujarat investors' Summit in 2011. This has resulted in creation of more than 25 lakh Job opportunities in the coming years as a result of huge investments in the state.” Does it mean that employment in the state would more than double very soon? The figures provided in either the latest “Development Programme” of the previous ones belie any such hope. There is, in fact, no explanation on why employment in the organized manufacturing sector went down in 2011-12.
Even then, the latest document seeks to exude imaginary confidence. It says, “Gujarat has 8.14 lakh educated jobseekers at the end of year 2012 (March-12 Ended). In order to improve their employability, it is essential to improve their skills. The State Government has given very high priority to skill formation as well as multi-skilling. In order to enhance the seats in the vocational and professional training, under education programme, self-financing institutes are being encouraged as well as short term training programmes have also been launched.”
Further: “The Annual Development Plan accords high priority for employment generation through various State and Centrally Sponsored Schemes. The state has accorded high priority towards industrial development and thereby generating additional employment for youth, both in urban and rural areas. Emphasis would be placed on self-employment schemes in agriculture, animal husbandry, dairy development, village and small industries and allied activities. High priority is accorded to maximize employment with special emphasis on agro-based rural industries.”
In fact, it claims, “In view of Gujarat emerging as a fastest growing economy in the country with emphasis on sustainable industrial growth focusing on chemicals, petrochemicals, ports, infrastructure, engineering, textiles, information technology and other sectors, 263 Government ITIs, 126 grant-in aid ITIs and 322 self-finance ITIs are giving training to Total 1,38,106 trainees in 162 different trades”. As a result, it adds, “Gujarat stands first in providing jobs to the candidates through Employment Exchanges for the last eight years as per reports published by the Director General of Employment & Training, New Delhi. The number of placements in year 2009 was 1,53,500 which is the maximum among all the states.”

Employment in organised manufacturing sector, Gujarat 
Year      Nos                % rise/fall over previous year
2012        643830             minus (--) 0.68
2011        648196                   2.15
2010        628384                   8.85
2009        577286                  2.02
2008        565832                16.86
2007        484194                    -
(Source: Development Programme, Gujarat State, last five years)

GSDP growth in manufacturing sector, Gujarat 
Year         Rs in crore             % rise over previous year
2011-12       112521                 4.21
2010-11       107974                 5.31
2009-10       102526               25.67
2008-09         81582                 4.27
2007-08         78244                 7.78
2006-07         72537                     -
(Source: Socio-Economic Review, Gujarat State 2012-13)