New Delhi, Dec. 16: Even as the government splashes newspapers with a campaign titled Shining India claiming great strides in economic prosperity, embarrassing new data compiled for the finance ministry shows that organised sector employment has shrunk by a massive 4.2 lakh or 1.5 per cent in 2002.
The figure, which is far more than the combined decline recorded over the last three years, has forced Prime Minister Atal Bihari Vajpayee to ask the finance ministry to make employment growth one of its budget goals.
All economic ministries are being separately asked to put together action plans to reverse this trend and this is likely to be dovetailed with the budget.
Vajpayee has also held a meeting of all top trade union leaders. Among the worst affected are the Prime Minister’s home state Uttar Pradesh and neighbouring Bihar, both key determinants of who rules Delhi after the next year’s general elections.
The BJP’s labour wing has already warned the party that unless steps are taken to reverse the trend quickly, the mounting job losses could cut into the party’s essentially middle class urban votebanks in key states, despite better showing in industrially backward states like Rajasthan and Madhya Pradesh.
A top finance ministry official, who confirmed the ministry had been asked to make employment growth one of next year’s main budget goals, said: “The unfortunate truth is that since 1998 when the BJP came to power, employment growth has been negative. It grew between 1991 and 1997, but started falling ever since.” The fall has been massive. In 1997, there were 282 lakh organised sector jobs; but in 1998, it fell to 281 lakh and by 2002, it fell to 273 lakh.
The finance ministry is now thinking of dropping its strict dictum of cutting out tax sops and instead give incentives to labour-intensive industries and tax concessions to those industries which are being considered sunset ones with high closure risk.
The problem is that there has been steady job growth in the organised sector during the rule of both the Congress and the United Front governments. In 1991, there were 267 lakh jobs, which went up to 279 lakh in 1996, representing an increase of 4.5 per cent during the Congress rule. Between 1996 and 1997, when the UF government ruled, some three lakh more jobs were added.
To add to the Centre’s woes, the data also shows that of the country’s 3.5 million small-scale industries, some 1.8 lakh are sick. The sector, defined as part of the informal as opposed to the organised, employs another 200 lakh people. Huge sickness threatens to wipe out about a third of the jobs in this sector.
“That is one area we are trying to handle on a war footing. Bank chief executives have been asked to come for a meeting where SSI minister C.P. Thakur and our minister of state for banking Anandrao Adsul will try to work out a cheap loan package,” said an official.