Skip to main content

Job creation: Top ex-Modi adviser wants India to shed Reliance model, opposes minimum wage requirement

By Our Representative
Top Indian American economist, Prof Arvind Panagariya, who resigned as Prime Minister Narendra Modi's top man in the Government of India’s think-tank Niti Ayog, has controversially said that India does not need Reliance Industries Ltd (RIL) type of model, which are not job-intensive.
Contrasting RIL with a little-known industrial house, the top academic, who is professor at Columbia University, US, says, “Nothing explains India's job creation challenge better than a comparison between RIL and Shahi Exports”.
Dishing out figures, he says, “While RIL employs five workers for each $2.2 million in assets, Shahi Exports, which is India's largest apparel exporter, employs 1,260 workers for every $2.2 million in assets.”
Pointing out that “Shahi Exports creates 252 times the jobs that RIL does” across its various ventures in India, Panagariya, who remains in touch with Modi even after resigning from his top job citing India’s powerful bureaucracy, says, it is the “apparel industry model” which holds “the key for India’s job creation requirements.”
“Jobs that Shahi Exports creates are what India needs most today”, insists the top economist, adding, “Its factories can take someone with fifth-grade education and impart necessary training in just six weeks. On average, these workers earn Rs 15,000 a month. About 60% of Shahi Exports employees are women.”
He adds, “If we could rapidly multiply what Shahi Exports does, we could begin expanding formal-sector jobs rapidly — especially for women.”
Noting that “apparel requires modest investment per job and the demand for it is there”, Panagariya says, “In 2015, the apparel export market was $465 billion. India exported $18 billion of it compared with China's $175 billion. High wages are now forcing China to withdraw from this market. From $187 billion in 2014, its apparel exports have fallen to $158 billion in 2016.”
Insisting that “India must take the space China is vacating”, he says, India must work out ways to "encourage the global apparel firms exiting China", adding, they must "locate in India, instead of Bangladesh and Vietnam... These firms have the technology and management know-how to operate on large scale. They also have links to global markets. Once a few anchor firms locate in India, many more local Shahi Exports firms would emerge.”
Suggesting the urgent need to bring about policy changes, Panagariya says, “For decades, our policies reserved apparel for production by small-scale enterprises. These enterprises were too small and their product quality too low to succeed big in the export markets.”
Pointing out that as a result "India's investment policy confined large firms and big industrialists to investing exclusively in a set of listed 'core' industries, which were all highly capital intensive”, he adds, "Although the core industries regulation ended in 1991, and small-scale industries reservation was withdrawn more than a decade ago, investment in apparel remains entirely off the radar screens of India's big industrialists.”
But the  big industries to for in for labour-intensive investment, Panagariya wants India to make a major change its labour policies, allowing "greater labour market flexibilities. 
One of the policy changes requiring urgent attention, says the ex-Modi man, is to relax the policy of minimum wage requirement, “If you live in Delhi, you are likely to think that a minimum wage of Rs 15,000 per month is only fair. And yet, such a wage will drive many labour intensive, formal sector firms out of business”, he underlines.
“Reports that the Wage Code currently under consideration by Parliament may hike the national minimum wage to Rs 18,000 a month have left many formal sector firms very nervous”, he notes.

Comments

TRENDING

Allow international human rights observers, media to access Kashmir: US lawmakers

Counterview Desk
In a letter to US Secretary of State Mike Pompeo, two members of the American Congress, Pramila Jayapal and James McGovern, raising "significant concerns" about what they call "humanitarian and human rights crisis in Jammu & Kashmir”, quoting "credible reports" from journalists and advocates on the ground" have said that "the Indian government has detained thousands of people with no recourse, imposed de facto curfews on residents' and cut off internet and telephone access in the region.”

Rescind Gates Foundation award to Modi, demand three Nobel Peace laureates

Counterview Desk
In a major boost to those opposing the award to the Gates Foundation’s proposed to be awarded to Prime Minister Narendra Modi for his Swacch Bharat Abhiyan, three Nobel Peace Prize laureates, Mairead Maguire (1976), Tawakkol Abdel-Salam Karman (2011) and Shirin Ebadi (2003), have in an open letter called upon Milinda and Bill Gates to withdraw their decision, stating Modi is allegedly involved in human rights violations.

US Kashmiri diaspora body: World leaders, UN 'not acting', India enjoys total impunity

Counterview Desk
Ahead of the United Nations General Assembly session, to begin on September 17 in New York, Dr Ghulam Nabi Fai, secretary-general of the World Kashmir Awareness Forum, a non-profit organization based in Ohio, US, claiming to focus on providing information on Kashmir, has regretted that despite "violent" behaviour of Indian authorities in Kashmir, they enjoy "total impunity" across the world.

Jharkhand riverine terminal: 485 families 'displaced', lose land, livelihood in Sahibgunj

Counterview Desk
Even as Prime Minister Narendra Modi proposes to inaugurate on Thursday India’s second riverine Multi-Modal terminal (MMT) at Sahibganj in Jharkhand, built at a cost of Rs 290 crore reportedly in a record time of about two years, several civil rights organizations* have said that the government has failed to address the high-profile terminal’s social and environmental concerns.

Now clampdown on rally, arrest of pro-freedom activists in Pak-occupied Kashmir

Counterview Desk
In a fresh evidence, international human rights organizations are not just confining their attention on the Indian state of Jammu & Kashmir (J&K), whose special status was taken away by the Government of India in early August, leading to an unprecedented clampdown on the region. They have simultaneously begun focusing on the Pakistan-occupied Kashmir (PoK), where the situation is said to be worsening.
Thus, the International Human Rights Council ((IHRC) Hong Kong (HK), a top human rights organisation, said to be working towards to the promotion peace, equality, fundamental rights and social justice “as enunciated in the UN Human Rights Charter and other instruments of human rights”, has noted now a new wave of independence movement has struck PoK.  With offices in US, UK, Switzerland and Hong Kong, and having Kirity Roy and Lenin Raghuvanshi as IHRC office bearers from India, in a statement, it has claimed that on September 7 one of the biggest pro-Independenc…

Gujarat's incomplete canals: Narmada dam filled up, yet benefits 'won't reach' farmers

Even as the Gujarat government is making all out efforts to fill up the Sardar Sarovar dam on Narmada river up to the full reservoir level (FRL), a senior farmer rights leader has said the huge reservoir, as of today, remains a “mirage for the farmers of Gujarat”.
In a statement, Sagar Rabari of the Khedut Ekta Manch (KEM), has said that though the dam’s reservoir is being filled up, the canal network remains complete. Quoting latest government figures, he says, meanwhile, the command area of the dam has been reduced from 18,45,000 hectares (ha) to 17,92,000 ha.
“According to the website of the Sardar Sarovar Narmada Nigam Ltd, which was last updated on Friday, while the main canal, of 458 km long, has been completed, 144 km of ranch canals out of the proposed length of 2731 km remain incomplete.
Then, as against the targeted 4,569 km distributaries, 4,347 km have been constructed, suggesting work for 222 km is still pending. And of the 15,670 km of minor canals, work for 13,889 km ha…

Karma tribal festival an occasional to campaign for tribal rights: IPMSDL

The International Indigenous Peoples Movement for Self Determination and Liberation (IPMSDL), in a solidarity statement has suggested that the current Karam festival of Central India -- which seeks to promote sisterhood, friendship, cultural unity, and closer link to nature -- should be the occasion to campaign against alleged efforts to violently drive away forest dwelling communities from their forest homes.
"Millions are threatened to lose lands and livelihood under the implementation of Forest Rights Act (FRA) of 2006", the statement States, adding, "As corporate interests continues to enter tribal territories and extract profit from its natural resources, indigenous people are pushed to further marginalization and discrimination."
Asserting that indigenous movement in India "remains steadfast in keeping their culture, deeply linked to their lands alive by carrying out their heritage and struggles", IPMSDL, even as extending "warmest greetings"…

South Gujarat wastewater carrying pipeline damaged, 'harming' farmlands

The pipeline carrying industrial wastewater to the Gulf of Khambhat from Jhagadia industrial estate in Bharuch district has been found to have damaged for the eighth time over the last one and a half months. The crack, says a local environmental organisation, has occurred at Hansot, endangering agricultural farms.

US Air Force expert smells regional security threat following Chandrayaan mission

Counterview Desk
A United States Air Force expert, writing on India’s Chandrayaan -2 mission, has expressed the apprehension that Indian moon probe’s “failure” won’t stop an Asian space race that “threatens regional security.” Affiliated with the US Air Force School of Advanced Air and Space Studies, Wendy Whitman Cobb, who is Professor of Strategy and Security Studies, believes like other space powers, India may be “seeking to improve its technology”, but advances can “also bring greater security concerns.”
Currently, admits Cobb, “These efforts have been primarily civilian and peaceful in nature.” However, India’s turn toward the military uses of space, so much so that lately it has been developing its own military satellites providing services such as remote sensing, tracking and communications “with greater frequency” has begun to “concern” the neighbours.
In her disclosure statement to an article published in the e-journal “The Conversation” Cobb, however, states that whatever…

Ceramic worker dies: 20,000 workers in Thangadh, Gujarat, 'risk' deadly silicosis

Even as the country was busy preparing for the Janmashtami festival on Saturday, Hareshbhai, a 46-year-old ceramic worker from suffering from the fatal lung disease silicosis, passed away. He worked in a ceramic unit in Thangadh in Surendranagar district of Gujarat from 2000 to 2016.
Hareshbhai was diagnosed with the disease by the GCS Medical College, Naroda Road, Ahmedabad in 2014. He was found to be suffering from progressive massive fibrosis. He is left behind by his wife Rekha sister and two sons Deepak (18) and Umesh (12),
The death of Hareshbhai, says Jagdish Patel of the health rights group Peoples Training and Research Centre (PTRC), suggests that silicosis, an occupational disease, can be prevented but not cured, and the Factory Act has sufficient provisions to prevent this.
According to Patel, the pottery industry in the industrial town of Thangadh has evolved for a long time and locals as well as migrant workers are employed here. There are about 180 units in in the to…