Unemployment

Rising discontent

Print edition : December 08, 2017

Dharmesh Moradiya, president of the Ahmedabad Diamond Workers’ Association, at a closed diamond workshop in Ahmedabad in November 2016. Photo: AFP

The unprecedented economic slowdown in Gujarat coupled with high unemployment levels could hurt the BJP's prospects in the elections.

BUSINESS IS GUJARAT’S CENTRAL NERVOUS system. If that is affected the State starts falling apart. So, while various communities and political parties are busy playing the caste card, there are fundamental areas of concern such as rising unemployment and an overall economic slowdown that are likely to play a significant role in this election, according to political observers.

“Hu Vikas Chhu, Hu Chhu Gujarat” (I am development, I am Gujarat) is one of the slogans on the Bharatiya Janata Party (BJP) campaign banners. In spite of a possibility that the development card may backfire given the realities in the State, Prime Minister Narendra Modi and his team appear convinced that this path will secure them a record sixth term in power. As architects of the development model and the masterminds behind projecting the State as one of the most progressive on the industrial front, it will be quite a feat if they pull off another victory on this plank.

In spite of the BJP’s positive projections over the past few years, data point towards a lowering in growth rate. It was at its lowest at 7.7 per cent in 2014-15. Demonetisation and the Goods and Services Tax (GST) have dealt a huge blow to this mercantile State. As ground-level information on the miserable conditions in both urban and rural areas began spreading and the BJP began feeling the backlash of its economic policies, the party went into damage control and scrambled together a slew of incentives and schemes in October, a month before the elections.

To counter the slowdown caused by demonetisation and GST in Gujarat’s thriving textile sector, the BJP government unveiled a new policy to target investments worth Rs.20,000 crore and create one lakh new jobs. It announced that workers in garment manufacturing units would be given additional income—Rs. 4,000 for women and Rs.3,200 for men—to supplement household incomes. An additional 16 Gujarat Industrial Development Corporation (GIDC) estates were announced to attract 15,000 micro, small, and medium enterprises with the aim of creating another one lakh jobs. The party also announced a series of sops and agricultural loan waivers.

“For four years they have only pandered to big industry. GIDCs are not the solution; in fact, so many are running at half their capacity,” said Arun Mehta, a Communist Party of India (Marxist) Central Committee member from Gujarat who works closely with trade unions. “The main issue plaguing Gujarat’s employment levels is that there is absolutely no development in industry or by way of government schemes.”

According to Mehta, the national rural employment guarantee scheme is collapsing, there are few Public Works Department (PWD) projects, and with even agriculture showing distress, there are few avenues of income generation, presenting an overall bleak picture.

Mehta also said that post-demonetisation and GST, Gujarat’s mainstay sectors of textiles and diamonds have experienced an unprecedented slowdown. For instance, diamond units, which usually close for 10 days after Diwali, stayed shut for a month this year. Even now only 30 per cent have reopened. Manufacturing has reduced by 10-15 per cent, which is substantial and will take a toll on labour, he said.

“The problem is the Congress is unable to catch the dissatisfaction. They are poorly organised, particularly at the booth level, which means that they have no idea of the ground realities. Furthermore, their economic policies are weak and even those that exist continue on the liberalisation wagon, which we all know is flawed and led us to this condition,” Mehta said.

“Unfortunately, the Congress is failing to expose the BJP’s governance failures and capitalise on the popular discontent. It does not seem to project itself as an alternative,” he added.

The rise of discontent in Gujarat finds its roots in the high levels of unemployment, said Shaktisinh Gohil, a Congress leader in Gujarat. Gohil’s statement comes from the agitations led by the Patels and other communities.

Jignesh Mevani, leader of the Rashtriya Dalit Adhikar Manch, said: “One of the election promises that got Narendra Modi such a huge mandate was that of generating two crore jobs every year. Where are these jobs? He has deceived the people of Gujarat and India.”

According to the fifth annual Employment-Unemployment Survey (2015-16) released by the Ministry of Labour and Employment’s Labour Bureau, Gujarat, with 9 per cent, ranks the lowest among States in unemployment. However, the numbers at the employment exchanges in Ahmedabad tell a different story. Data from the State labour and employment department show that about 2.45 lakh unemployed youths have registered in employment exchanges across Gujarat as on March 2015 and 88,750 are from Ahmedabad district.

“It is not about unemployment as much as it is about the nature of employment. The change that has taken place since the previous election on the employment front is that contractual employment is non-existent. This is the big dynamic. There is no work,” said Atul Sood, a professor at the Centre for the Study of Regional Development, Jawaharlal Nehru University. “They are unhappy because whatever the education they gain, the employment available does not match.”

Sood, who has written extensively on social and economic issues in the State, said: “The assertion, such as the protests on reservation that we see in Gujarat today, is not so much about the labour market but about them wanting a share in the wealth pie or about their access to wealth which seems to have disappeared.” He added that it was a much more layered protest which should be studied carefully to understand the discontent.

In 2012, Sood had coordinated and edited Poverty amidst Prosperity, a compilation of essays on the development of Gujarat. The book came out just before Gujarat went to the polls when Modi’s propaganda machine was in full throttle.

In his review, the economist C.P. Chandrasekhar mentions Modi’s “willingness to use the state exchequer, public resources and the most neoliberal of strategies to extend the relative success of industrialisation in Gujarat (vis-a-vis other States), and then claim that all progress on the industrial front in the past and during his tenure are the results of his developmental acumen and good governance”.

The essays say that during Modi’s tenure, social equality, sustainable livelihoods, access to education and health, justice and peace have been abandoned in the race for growth in the high-speed lane. The Gujarat government has been particularly successful in collaborating with private capital in joint venture projects, such as public-private partnerships and build-operate-and-transfer schemes, to assure profit to the private sector in return for infrastructural investment.

In terms of growth, this strategy seems to have worked for Gujarat’s government, making the State the industrial success and overall growth story that it appears to be. Sood, however, says that the connect between this type of growth and the growth of poverty and inequality is strong, though seldom underlined. In an opinion piece he says: “The biggest casualty of the ‘successful’ growth in Gujarat (and least discussed) is employment.”

An entire generation has grown up during the Modi/BJP regime in Gujarat. According to Election Commission data, there are 21 lakh first-time voters in Gujarat. These are the claimants for employment. It will be interesting to see whether Modi still has his political charisma to pull off growth and development as a plus he is responsible for, or whether it will be his undoing.

Not so vibrant

After using the communal card to come to power in 2002, Modi had to find another plank to keep going. He also had to clean up his image to project that he was a doer. He took the route of wooing industry, for which he launched the Vibrant Gujarat Summit. Started in 2003 with just 500 people attending, in 2017 it had grown to 55,000 people visiting the four-day summit. In 2003, the Gujarat government signed 76 memoranda of understanding (MoUs) with a promised investment of Rs.66,000 crore. In 2017, the government reportedly signed 25,578 MoUs but has not released the investment amount.

An MoU obviously does not mean the project will actually come through. And so thousands of agreements and understandings disappeared or collapsed. The only thing they did was to serve Modi’s image as a man for development via industry.

One of the purposes of the Vibrant Gujarat Summit was to generate employment. Modi and his team said that with the State encouraging industry to set up shop, a substantial number of jobs would be available. It was a clever move towards wooing the young electorate. A private entrepreneur said about three lakh jobs are believed to have been created through the summit. Clearly not enough, as the employment exchanges record that many applicants a year. Furthermore, Modi is a big industry man. In today’s time, technology has replaced labour. These companies do not hire at the numbers that need to make a difference.

In another attempt to increase employment, the State set up special economic zones. The 920-square-km Dholera Special Investment Region, touted to be India’s first smart city, is in the works. For four elections the BJP has used the Gujarat growth model to garner votes. Will another generation buy the story?

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