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COVER STORY: JOB CRUNCH
The Shake Down
The double whammy of slow reforms and slack demand hits
industry
Last month, Finance
Minister Yashwant Sinha returned to office after a long hiatus. His first
meeting was with Chief Economic Adviser Rakesh Mohan. His first question:
"What do we do about sentiment?" It's a question being aired
by virtually every section of the economy. A poser that has no easy answer.
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"More
than losing the job, I am upset about the manner in which I was
sacked."
Pawan Lakhera, 23, graduate, fired by
Innodata, Delhi
In May this year, Innodata India Pvt Ltd, a data processing company
based in Noida, a suburb of Delhi, went on a hiring spree. The company
had just secured a new project from The New York Times and needed
almost 600 data-entry operators to execute it. So anybody who had
a working knowledge of computers and was looking for a career in
what is possibly the lowest rung of the information technology (IT)
ladder was taken in. Among those hired was Pawan Lakhera, a 23-year-old
graduate from Delhi University. And though his Rs 3,500 salary was
hardly anything to boast about, Lakhera's family celebrated its
first generation IT professional with great gusto.
The celebrations did not last though. Barely had Innodata finished
recruiting people to execute the order when The New York Times scrapped
the project. What had been a dream job for many freshers suddenly
turned into a nightmare. On June 20, Lakhera was summoned and summarily
asked to resign. He wasn't alone. All the other new inductees were
also bundled into the same boat and thrown overboard so that the
ship remained afloat. After some of them protested and moved the
labour court, Innodata India agreed to pay one month's salary as
severance pay to all the sacked employees.
Meanwhile, Lakhera is back to scanning newspapers for vacancies
and applying for jobs. Whether he includes in his bio-data his 18-day
stint as a data-entry operator at Innodata India is anybody's guess.
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After all, barely 100 days ago nearly every corporate
pasha awarded nine out of 10 to Sinha's budget 2001. But all that optimism
hasn't showed in the economy's performance so far. If the job market is
in the grip of an unforeseen downturn, the other markets in the economy-for
manufactured goods, agriculture produce, equities and services-have been
trapped in a slowdown for over three years now. If the rest of the economy
languishes, jobs will too. Not only in what is known as the organised
sector of the economy, but also in the unorganised economy which includes
a large number of small-scale units in the country. Once the magnets of
investment, production and employment, most of the industrial clusters
across the country are struggling to survive. Even a snapshot of these
runs into some length:
# Peenya near Bangalore is among Asia's largest
industrial estates. At least 30 per cent of the 3,000 units there are
lying closed.
# The two industrial estates in Chennai-the
Ambattur estate and the Guindy estate-showcase the horror of the industrial
shakedown. More than 500 of the 2,500 units at Ambattur have been officially
shut down, while many more remain operational only on paper.
# Thane-Belapur was once the hub of industrial
Maharashtra. Dinesh Parikh, who heads the Thane-Belapur Industries Association,
says, "Nearly half the units are closed and sickness is round the
corner for another 15 per cent." Many of these are not manufacturing
units but render services like logistics, merchandising and warehousing.
# There are no takers for space provided by
the Uttar Pradesh State Industrial Development Corporation. It has now
decided to convert the industrial estates into agro-parks and sell them.
# Surat accounts for 90 per cent of the diamond
cutting and polishing industry in India. There is almost a 25 per cent
reduction in the business which has rendered roughly 50,000 of the total
five lakh diamond polishing workers jobless in Gujarat.
# As many as 251 large and medium plants and
29,359 small-scale units are sick and shut, affecting 2.93 lakh employees
in Andhra Pradesh.
# Most of the 30,000-odd non-banking finance
companies doing business in 1995 have either closed down or vanished.
# Darshan Mehta, CEO of Anagram Stockbroking,
believes that close to "2,000 of the 3,500 registered brokers will
simply vanish".
One more startling statement to drive home the
extent of industrial sickness and the consequent job loss. The Board for
Industrial and Financial Reconstruction (BIFR) has 3,296 units registered
as sick. Of these 830 were registered with the BIFR in the 14 months between
January 1, 1999 and February 28, 2000. All units together employ 18,84,565
people and their accumulated losses tote up to Rs 55,260 crore. In other
words, almost 1.8 million workers-or roughly half the number (3.72 million)
employed by the Government of India-could potentially lose their jobs.
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