Rural India has to be the pivot of Skill India. Start with farmers

In the midst of all the excitement generated over the launch of an ambitious ‘Skill India’ initiative, I find two news reports to be particularly disturbing. These reports are a reflection of the worsening job scenario, with or without specially acquired ‘skills’.  

In Madhya Pradesh, 362,685 people applied for the jobs of peon/guards in 58 State Government departments. Of these 14,000 were either post-graduates or engineers. They all sat for a written examination. I wonder what kind of special skills are required to be a peon/guard that they need to go through a written test. Anyway, another news report tells us how a Mumbai-based post graduate, with four degrees in hand, including an MA in globalization and labour from the Tata Institute of Social Sciences, is working with the Mumbai Municipal Corporation cleaning the city’s garbage. An MBA was among those who had recently applied for 26 jobs of peons in the Punjab and Haryana High Court in Chandigarh.

While the ‘Skill India’ initiative to provide particular skills to 400 million people by 2020 is certainly welcome, I don’t know whether we already have an over-skilled work force or we have a long way to catch up with some of the developed countries record in providing skills. For instance, if India were to just categorise its 52 per cent farming population as skilled workforce, it will immediately move into the developed country category with over 50 per cent skilled manpower. Farming being a skilled profession, farmers have been deliberately treated as non-skilled workers. Categorising farmers as skilled workforce has financial implications, including ensuring minimum wages, paying health expenses and also providing post retirement benefits. That’s why farmers are kept out.

Similarly, I find one of the biggest employment generating sectors – temples/churches/gurdwaras – to be outside the purview of skilled workforce. Those who join these religious institutions are also skilled, even if they don’t require an ITI diploma.

The definition of what constitutes a ‘skill’ therefore has to change. I see no reason why farmering, which employs 52 per cent of the population, should not be included as part of the skilled workforce. At the same time there is a dire need to launch a skill improvement programme for young farmers with adequate financial and institutional support to enable them to become start-ups and entrepreneurs. There is a much greater possibility to turn the young workforce in rural areas to learn avocations that can make them self-employed. This is specially required considering that nearly 81 per cent of the land holdings are below 2 acres, which means the young members of the small and marginal farm families need to be trained to supplement their income from non-farm activities.

Besides shifting the thrust of public investments to rural areas, what is also required is to provide proper incentives for bringing about a required change. A poor woman in a village who wants to rear a goat for creating a viable livelihood option too needs to be given incentives that are given to big industrial houses. She needs to borrow Rs 8,000 for buying a goat which comes from a Micro-Finance Institute (MFI) charging 24 per cent rate of interest. On the other hand, big industrial houses are often given credit at 0.1 per cent interest. If only the poor woman was to get the loan for buying a goat at 0.1 per cent I am sure she would be driving a Nanocar at the end of two years. Similarly, Farmer Producer Companies, which enables farmers to get into entrepreneurship, have to pay an interest of 30 per cent on the profits generated. Why can’t it be brought down to 15 per cent to begin with? 

Therefore, there is a dire need to change the focus of skill development programme. It cannot be only aimed at meeting the requirement of 30-crore cheap labour -- dhari mazdoors -- that the Confederation of Indian Industry (CII) estimates the construction sector will require by 2022. Only a fraction of the jobs in the construction sector would need the kind of skills that the ITIs are known to train them for. More than 95% jobs in the construction industry are simply of daily wager workers.  Also, an ICRIER study shows that automation and increase in labour productivity destroyed 11.8 million jobs in the manufacturing sector in post reforms period. That’s a warning that cannot be ignored. #

*Rural India has to be the pivot of Skill India: Start with farmers. ABPLive.in July 19, 2015
http://www.abplive.in/author/devindersharma/2015/07/19/article655531.ece/Rural-India-has-to-be-the-pivot-of-Skill-India-Start-with-farmers?fb_ref=Default

Does high economic growth translate into employment?

A recent report prepared by the consultancy firm PriceWater House for the Confederation of Indian Industry (CII) harps on the usual premise of boosting economic growth as the basis for job creation. Accordingly, it will still take 20 years to remove unemployment even if India grows at an annual growth rate of 9 per cent.

This is exactly what we were taught in our Economic 101 class. These textbooks have not been updated ever since these were written and prescribed for economic students. The ups and downs witnessed in the past ten years when economic growth peaked to 9.3 per cent between 2004-05 and 2009-10, and then subsequently slid to 5.3 per cent after 2010-11, and in both the periods unemployment soaring, only shows that return to high growth, if that happens, does not automatically translate to job creation.

Jobless growth is a real threat.

In the past decade, India’s annual GDP growth had been at an average of 7 per cent. Even between 2005 and 2009 when the average rate of growth was 8.5 to 9.3 per cent, a Planning Commission study shows that 14 crore people had left agriculture. Normally those who abandon farming should be joining the manufacturing sector. But even in the manufacturing sector, 5.3 crore jobs were lost. So where have these 14 crore people who quit farming and believed to trudge to the cities actually gone? My understanding is that most of these who abandoned agriculture actually stayed back in the village to become landless workers.

This is corroborated with the data coming from the National Sample Survey Organisation. The NSSO survey indicates that India's labour force was between 44.0 crore to 48.4 crore in 2011-12. The lower number indicates people who looked for work every day, while the higher points to those who joined the workforce at some point in the year. This means roughly 2.5 crore people who were looking for jobs remained unemployed. But more significantly, the NSSO tells us that only 18 per cent of those who got jobs were on a regular wage. The remaining were daily workers or contract labour or self-employed.

More recently, CRISIL, the global analytical company has in a study shown since 2007, over 3.7 crore farmers had abandoned agriculture and migrated into the cities to look for daily wage work. But in the two years – between 2012 and 2014 – when economic growth had remained sluggish, an estimated 1.5 crore have returned back to the villages in the absence of job opportunities. In other words, even the daily wage opportunities waned.

In the past ten years, when growth remained on an average pretty high – exceeding 7 per cent for the ten year period 2004-2014, only 1.5 crore jobs were created. In a country where more than 1 crore people join the employment queue every year, more than 15 crore jobs should have been created considering the high growth rate India witnessed. But with only 1.5 crore jobs created in ten years, or a mere 10 per cent of the expectation, the big question remains – will high growth result in more jobs as CII projects?

I think CII is completely off the mark. Its projection of a high growth to create more employment is aimed at seeking more financial sops and perks from the government. Let me explain. Between 2004-2005 and 2014-15, a ten year period of high economic growth averaging 7 per cent per year, the industry was given tax concessions to the tune of Rs 36-lakh-crore. These tax concessions are listed in the budget documents under the head Revenue Foregone. These massive tax concessions were doled out to the industry on the premise that it will increase industrial activity, increase exports and of course create more jobs.

Interestingly, when India was on a very high growth trajectory between 2004-05 and 2009-2010, industrial production had slumped to minus 7.20 per cent in Nov 2009. In the present year 2014, the industrial growth in the quarter ending Oct 2014, is at a paltry 2.5 per cent. Manufacturing sector on the other hand is completely in the dumps. Manufacturing sector has declined showing a growth of only 0.2 per cent in 2013-14, compared to 1.1 per cent growth a year earlier. The story of exports from India is also not cheering enough. By Oct 2014, exports from India contracted by 5 per cent due to a fall in shipments of engineering goods, gems and jewellery and pharmaceuticals. This has further widened the trade deficit indicating that more and more imports were coming in.

So if the industrial output has remained sluggish, the exports have not jumped as expected and the high growth has failed to translate into increased job opportunities, the question that needs to be asked is where has the Rs 36-lakh-crore incentive that was given to India Inc gone? If this huge subsidy given to corporate was instead invested in removing poverty, India could have easily wiped out poverty for the next 72 years. Any country that can remove poverty for 72 years will actually be able to make poverty history.

It’s therefore all a case of misplaced priorities. It is quite obvious that job creation comes in handy to seek massive financial and infrastructure support from the government. 

The only bright spot in India’s growth story is actually agriculture. In 2013-14, farmers produced a record harvest of 264.4 million tonnes of foodgrains. Production of oilseeds reached a record high of 34.5 million tonnes, a jump of 4.8 per cent. Maize production increased by 8.52 per cent to reach a level of 24.2 million tones. Pulses production reached an all-time high of 19.6 million tones, an increase of 7.10 per cent over the previous year. Cotton production too touched a record high.

But strangely, its agriculture that is on the chopping block. Not forgetting that agriculture is the biggest employer, with some 52 per cent of the population directly or indirectly involved with agriculture, the thrust of the PriceWater house report should have been on how to make agriculture more profitable by bringing more money into the hands of farmers. There is a desperate need to boost public and private investments into agriculture and by gradually turning the village landscape into smart villages, the entire rural economy can be revived. This will cut down on rural-urban migration and create permanent jobs rather than push farmers to abandon farming and become casual labour in the cities. #

Where are the jobs? DNA Mumbai, Dec 3, 2014.

http://www.dnaindia.com/analysis/column-where-are-the-jobs-2040718

रोजगारविहीन विकास की कहानी  Amar Ujala, Nov 28, 2014

http://www.amarujala.com/news/samachar/reflections/columns/story-of-jobless-development-hindi/

Despite high growth, where are the jobs? Deccan Herald. Dec 16, 2014.
http://www.deccanherald.com/content/447862/despite-high-growth-jobs.html#

What do you do when Heads of State indulge in lobbying ?

The chorus is getting louder. So what if Wal-Mart had spent Rs 125 crore ($25 million) in lobbying to gain access to the lucrative Indian retail market. After all, it's not one-off case, US firms have been doing it for long, says another news report (Hindustan Times, Dec 12, 2012. http://bit.ly/X9pbfg). Not only the print media, almost all TV discussions in India in the past few days have by and large carried the same line.

The demand is for legalising lobbying, following the pattern in the US, and thereby bringing in some regulations to make it more transparent. After all, the US has 12,220 lobbyists (consultants, lawyers, associations, corporations, NGOs etc) registered in 2011. There are over 15,000 lobbyists based in Brussels alone, who try to influence the European Union legislative process. In India, except for the industry lobbying groups -- Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI) and the Associated Chambers of Commerce and Industry of India (Assocham India) -- not much is known about the other players in lobbying.

There are layers at which lobbying operates. Starts with academic institutes, and then goes to economists and scientists. They help with funded studies and reports that come in handy to convince the bureaucrats and politicians. Media then steps in raising the pitch. And finally, it is the politicians, political parties and ministers who remain the prime targets.   

But what worries me more is when Heads of State start indulging in lobbying. If you have followed the news reports regularly, all Heads of State of major economic powers who visited India after 2009 had lobbied strongly in favour of FDI in retail. US President Barack Obama, UK Prime Minister David Cameron, Former French President Nicholos Sarkozy and German Chancellor Angela Merkel had impressed upon the Indian Prime Minister Manmohan Singh on the need to open up for big retail. US Secy of State Hilary Clinton, who had earlier served on the board of Wal-Mart, had even gone to the extent of lobbying with the West Bengal chief minister Mamata Banerjee when her party Trinamool Congress was part of the UPA-II Coalition in India. 

Although the Indian government has agreed to institute an inquiry in to the specific case of Wal-Mart lobbying to know who was paid , if at all some payments were made, to influence the political decision making, the fact remains that the rut runs much deeper than what is visible. Take the case of Dow Chemicals, which later bought Union Carbide. According to a news report, Dow Chemicals had in 2011 spent $ 8 million (Rs 50-crore) to seek market access in Thailand, India and China. Well, this is is only one of the activities that companies often indulge in. Prior to lobbying activities in 2011, the US Securities and Exchange Commission had in 2007 fined Dow Chemicals $325,000 for bribing Indian officials to fast track permission to sell their pesticides brand that are banned in the US and many other countries (Dow bribed Indian officials with cash. jewellery and hospitality, Economic Times, June 28, 2010. http://bit.ly/RoiHwg).

India had instituted a Central Bureau of Investigation (CBI) inquiry into the bribery case. But did you hear anything after the case was filed? And knowing how the Union Carbide was for all practical purposes let off the hook for its role in Bhopal Gas disaster, big business would never be held accountable for its acts of omission and commission, forget about criminal culpability.  

Monsanto, the global seed and technology giant, is known to be aggressively pursuing the introduction of controversial genetically-modified crops in the developing world. In 2005, the US Department of Justice had charged Monsanto with bribing Indonesian officials, and the company had agreed to pay a fine of US$ 1 million (Department of Justice, http://1.usa.gov/12764b3). Interestingly, the bribe amount of $50,000 to a senior Ministry of Environment official was shown as 'consultancy fee' in the company's books. In other words, it was shown as a lobbying fee. How does one therefore try to separate lobbying from bribery? No company has a separate head for bribery in its books and records. I don't know how can an inquiry separate the grains from chaff?

The GM industry has set up an NGO for lobbying purposes. The International Service for the Acquisition of Agri-biotech Applications (ISAAA) has an office in India, like many other developing countries. It lobbies with the scientific institutions as well as the politicians. There are instances of such lobby groups routinely taking journalists and government officials on visit to Monsanto's headquarters in America. This may be purely legitimate form of lobbying, but goes a long way in manipulating public opinion. Coming back to Wal-Mart, the New York Times had sometimes back had taken the lid off a massive scandal by Wal-Mart in Mexico -- where it allegedly paid bribes to seek expansion of its stores (Wal-Mart's US expansion plans complicated by bribery scandal. NYT April 29, 2012. http://nyti.ms/VBF5h8). In India too, an investigation has been launched into the violations of the foreign investment rules by Wal-Mart.

I don't therefore understand how can we believe that lobbying is completely a pious and legitimate activity unless we try to dig out how the companies bribe officials, and that includes economists, agricultural scientists and media owners, to get its way through. Lobbyists have known to be moving in the corridors of power, and more often than not carrying a bag of money. Ask any business and political journalist and they will tell you who's who of the corporates who have their lobbyists moving in the corridors of power. Not only Niira Radia, quote a large number of corporate lobbyists have been successful on the job, and seemingly operate silently without the public glare. Most decisions that you think have been taken in the national interest are actually swayed by money bags. Isn't that lobbying? Isn't lobbying therefore a cleaver phrase to provide a neat cover-up to everything bad associated with bribery?    

It is a known secret that media remains one of the biggest beneficiary of lobbying. Not carrying a news report, which obviously benefits the corporate client, is one such unnoticed activity that media indulges in very frequently. Let me illustrate. At the height of the Wal-Mart debate in parliament, some media houses (who knew about it) had refused to carry a news report from Punjab which showed Wal-Mart paying a meager Rs8 to farmers growing baby corn. Wal-Mart sold it in wholesale for Rs 100/kg, making a neat Rs 92 in the process. This would have negated and exposed the government's claim that big retail would provide a better price to farmers by removing middlemen. Moreover, some of the major newspapers have never (or rarely) carried any critical view on FDI in retail. We know it why. Still more importantly, the way media appears more than keen to seek legitimacy for lobbying raises eyebrows.     

Lobbying has over the years become more sophisticated. It is not only a particular bureaucrat or a government official who gets an all-paid foreign trip or jewellery or other expensive gifts (like the way doctors are bribed by pharmaceutical companies as part of the lobbying activities to promote their brand of drugs), lobbying is now becoming a diplomatic activity. Several times we know how the US Ambassador in India (backed by the USIS and USAID) for instance had lobbied hard to push American commercial interests, including the nuclear treaty. EU diplomatic missions regularly hobnob with Indian officials lobbying on behalf of their respective businesses. Sometimes back, Wikileaks had exposed the use of diplomatic channels for lobbying across the world. Diplomatic lobbying also comes with arm-twisting, if required. Many such instances were exposed in Wikileaks.


Also see: The world of lobbyists. Deccan Herald.
http://www.deccanherald.com/content/210565/world-lobbyists.html

Corporate lobbying gaining strength in India

Some days back, Dainik Bhaskar published one of my tweets. I wrote: “Wal-Mart has spent Rs 52-crore between 2007 and 2009 on lobbying. Will Wal-Mart tell us how much it spent on the Prime Minister’s office?” A few days later, I noticed the BJP leader Shanta Kumar asking the same question.

Crores of rupees have been spent over the past few years by some of the big multinational corporations to seek an entry into India. What may appear to be economic decisions taken by the government often turn out to be the result of intense lobbying by foreign companies. Besides Wal-Mart Stores, the coffee shop giant Starbucks, which runs a global chain of coffee shops, has been lobbying in Indiaseeking 100 per cent FDI in single brand retail. As per a disclosure statement it made before the American Senate, the company had spent more than Rs 1-crore in the first 6 months of 2011, for “market opening initiatives in India.”

Starbucks efforts have borne fruits. Finally, the govt has approved 100% FDI in single-brand retail.

Wal-Mart Stores, the world’s biggest multi-brand retail chain, had told the US Senate that it had lobbied for “discussions related to India’s Foreign Direct Investment (FDI).” In addition to Rs 52-crore spent between 2007-1009, the company had also incurred Rs 6-crore in the first 3 months of 2010 for the same purpose. In other words, crores of rupees are being spent by foreign companies to influence public policy and the decision making process. Not many of us know that the debate we see on the television or the articles we see in support of the foreign companies are often supported with lobbying money.

At a time when the American and European economies are faced with a recession, at least a dozen Corporate giants are lobbying hard to seek an entry into India. These include Wal-Mart, Starbucks, and financial services major Morgan Stanley, New York Life Insurance and Prudential Financial. The financial services companies have already gained with the approval granted to 100 % FDI in single-brand retail. In addition, technology companies Intel, chemical giant Dow Chemical, pharmaceutical major Pfizer, telecom companies AT&T, Alcatel-Lucent are also engaged in intense lobbying.

Lobbying is a legal activity in America. The companies are therefore required to inform the US Senate about such activities by submitting quarterly disclosure reports. In India, where lobbying is so far not legally recognised, but the industry and business houses have formed association and federations which primarily are engaged in lobbying with the government. Federation of Indian Chambers of Commerce & Industry (FICCI), Confederation of Indian Industry (CII) and the Punjab, Haryana, Delhi Chamber of Commerc are basically lobbying groups. You would have noticed that the CII and FICCI have also been actively supporting the entry of Big box retail into India.

Internationally, lobbying is a major activity. According to Wikipedia, currently around 15,000 Brussels-based lobbyists (consultants, lawyers, associations, corporations, NGOs etc.) seek to influence the European Union’s legislative process. Some 2,600 special interest groups have a permanent office in Brussels. In America, lobbyists target the US Senate, US House of Representative and the State legislatures. There were some 17,000 lobbyists registered in Washington DCalone in 2007. This clearly tells us how corporate lobbying is writing the economic policies of the American and European governments. The economic decisions are in reality not based on what the people require, but how much the business houses can invest in influencing policy decisions.

It is therefore important for us to also know how much money has been spent by companies on influencing the Prime Minister’s office and also on parliamentarians. After all, it is our future that is at stake. #   

Read also: The world of lobbyists, Deccan Herald.
http://bit.ly/rA4o95