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Regular-article-logo Wednesday, 18 June 2025

Unkept promises

Governments of the day have systematically destroyed jobs

TT Bureau Published 08.09.15, 12:00 AM

Last year, then finance minister P. Chidambaram had promised tens of thousands of banking jobs. It was, of course, a vote-gathering gambit. The Congress failed to return to power and the jobs (but for those strictly necessary) never saw the light of day. The Narendra Modi government has started with a different agenda and public sector jobs as an alternative to dole isn't one of them. This, of course, is the simplest way in which the government destroys jobs. Just big promises that aren't kept. There are more complex ways to achieve the same thing.

Take, for instance, government projects. The last central cabinet was excellent at this. It would announce that so many miles of highways were being constructed or so many kilometres of railway tracks were being added. But there was no budget and no will to implement these plans. All the money available went to social schemes such as the Mahatma Gandhi National Rural Employment Guarantee Act.

These are involuntary developments. But the government can be in more active job destruction mode. Take the number of permissions required to set up a new business unit. This is the era of startups between an Ola and a Uber or between an E-bay and a Quikr is a matter of who comes first. An early government go ahead is thus imperative.

According to doingbusiness.org, in India you need an average of 13 days and 30 procedures to set up a company. And that's being lucky. Other people who generate the same statistic place it at much higher. One of the first promises Modi made when he was voted to power was to make it easier to do business in India. But evidence of the ground shows that we still have a long way to go.

The real reason is that Indians are overly fond of heritage. For very many years the Union Budget used to be presented at 5 pm. Ever wondered why? It's a tradition which started with the House of Parliament in London (which is five-and-a-half hours removed in time) commencing the day's proceedings at 11 am. This would give punters on the London stock exchange a chance to buy and sell their India securities. By the same yardstick, laws remain on our books which have no relevance to the environment today. Some heinous crimes attract a fine of just Rs 1,000. At the same time, the punishment includes a prison sentence of 20 years. At one time perhaps, 20 years was comparable to Rs 1,000. Today Rs 1,000 is something you give a monkey when you run out of peanuts.

Every year, new laws are enacted. Take the minimum salary as prescribed by the government. It is nobody's case that there should not be a minimum salary; in its absence workers can be exploited. But the government feels it is at liberty to dictate how much should be given. The Payment of Gratuity Act and the Payment of Bonus Act are self explanatory. Just like the minimum support price for sugarcane, for instance have driven mills out of business, all payments made in a policy vacuum and ignorance of the real nature of the harvest can lead to disaster. But, then, farmers are a very strong lobby.

There are several other ways in which the government destroys jobs. The labour laws of the land would apparently seem to encourage job continuity. But the truth is just the reverse. Several industrial units have closed down because the government failed to recognise this. The mills in Mumbai - stark eyesores now being converted into residential property - are a testimony to this short sightedness.

In other places, workers were given a voluntary retirement scheme. Any government may start with the best of intentions but the involuntary consequences of its actions can cripple labour. So is it not better for the Prime Minister and the rest of his tribe to concentrate on meeting leaders from other countries. That way everyone is kept busy - and happy.

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