Congress president Mallikarjun Kharge. File
| Photo Credit: PTI

Congress president Mallikarjun Kharge on August 1 accused the Modi government of indulging in “tokenism” by bringing in “so-called employment-linked incentive schemes”, and said the ‘B’ in the Union Budget stands for “betrayal”.

Mr. Kharge alleged that the Modi government’s Budget has mere internships forced upon the industry with no long-term solution in sight.

He said that a week into the ‘Kursi Bachao Budget’, the academia and the industry awaits clarity from the Modi government on its “tokenism” regarding the “so-called ’employment-linked incentive’ schemes”.

“Crores of youth want a permanent solution to their plight of Jobs, but Narendra Modi ji’s government bitterly deceives them by not even giving a temporary solution!” he alleged.

“We ask two questions to the Modi government on these sham schemes – When will the Modi government provide details of the schemes?” he said.

Also read | Congress MP Jairam Ramesh says Budget promises for Andhra, Bihar are ‘post-dated cheque on crashing bank’

Neither the youth nor the industry which is to be nudged, according to Finance Minister Nirmala Sitharaman, to provide internships, first time jobs or training has any know how about the contours of the five employment-linked incentive schemes, Mr. Kharge said.

“A government, which could not create a conducive environment for private investment and took measures to plunge it, is now acting as if it will suddenly nudge 500 top companies to hire 4,000 interns per year!” he said.

Was there any stakeholder consultation before imposing this “half-copied idea” from the Congress manifesto, Mr. Kharge asked.

The Congress Manifesto had a ‘Right to Apprenticeship’ – which is a structured system of training where individuals, known as apprentices, learn a trade or profession through a combination of on-the-job training and classroom instruction, he said.

“On the other hand, the Modi government’s Budget has mere internships forced upon the industry with no long-term solution in sight,” he alleged.

Why are none of these Employment-Linked Incentive Schemes missing the Public Sector component, Mr. Kharge asked.

“Is it because the BJP wants no recruitment of SC, ST, OBC and EWS youth in the Public Sector – through reservation?” he said.

Why are all these schemes providing temporary employment or internships, he asked.

“For instance, the incentive scheme for first-time employees, which offers a ₹15,000 subsidy is paid out in three installments and the second installment is only payable if the employee undergoes a compulsory online financial literacy course,” he said.

“Why should employees in every unrelated sector be expected to do this,” Mr. Kharge asked.

“More worrying is the clause stating that the subsidy is ‘to be refunded by the employer if the employment to the first timer ends within 12 months of recruitment’. If the employee switches jobs in 10 months, he/she has already received the benefit of the scheme, but the employer is required to bear the costs. Would any small employer take this risk?” Mr. Kharge said.

The minimum wage (average) in India is about ₹13,300, he said.

“It looks as if no new intern/hire in these SHAM schemes even getting that? The Modi government should clarify on this,” he said.

“The ‘B’ in BJP’s Budget stands for ‘Betrayal’!” he added.

Jairam Ramesh. File
| Photo Credit: The Hindu

The Congress on July 14 accused the Modi government of showing “insensitivity and hostility” towards Maharashtra, alleging that the past ten years have seen the State “consistently squeezed out of multiple key projects and investments”.

The Opposition party’s attack came after Prime Minister Narendra Modi asserted at an event in Mumbai on July 13 that his aim is to make Maharashtra the world’s big financial powerhouse and to make Mumbai a global fintech capital.

In a post on X, Congress general secretary in-charge communications, Jairam Ramesh, said, “Last evening in Mumbai, the self-anointed non-biological Prime Minister claimed that his ‘aim is to make Maharashtra the world’s big financial powerhouse and to make Mumbai a global fintech capital’. This is his trademark lie. Despite Mumbai having been the financial capital of India for 200 years, Mr. Modi has repeatedly refused to set up an IFSC in Mumbai. An International Financial Services Centre (IFSC) has been set up only in GIFT City in Gujarat. Dr. Manmohan Singh in 2006 had begun the effort to set it up in Mumbai,” Mr. Ramesh said.

“Land in the Bandra Kurla Complex had also been set aside for the IFSC but it was reallocated to the bullet train, costing Mumbai potentially two lakh jobs,” he claimed.

“In fact, the past ten years have seen Maharashtra consistently squeezed out of multiple key projects and investments — the attempted shift of the diamond industry to Surat, the shifting of industrial projects such as the Tata-Airbus manufacturing plant and the (now-failed) Vedanta-Foxconn chip factory, and the transfer of Central Government institutions such as the Textile Commissionerate Office and the Dattopant Thengadi National Board for Workers Education and Development,” Mr. Ramesh said.

“All this appears to be part of a larger insensitivity and hostility towards Maharashtra, as further evidenced by Mr. Modi’s continued refusal for the last ten years to declare Marathi a classical Indian language,” the Congress leader said.

His remarks came a day after PM Modi, during the event to launch projects costing ₹29,000 crore in road, railway, and port sectors, said, “Our aim is to improve everyone’s standard of living and make quality of life the best. This is why efforts are being made to better the connectivity of areas close to Mumbai.”

Prime Minister Narendra Modi plans a raft of business-friendly measures if he wins a third term this week, including pushing through regulations making it easier to hire and fire workers, according to two government officials familiar with the matter.

As part of an election pledge to transform India into a global manufacturing hub, Mr. Modi wants to offer subsidies for domestic production modelled on recent packages for semiconductor firms and electric vehicle makers, said the officials, who spoke on condition of anonymity because they were not authorised to talk to media.

He also plans to reduce import taxes on key inputs for locally-made goods, which have increased India’s manufacturing costs, the officials said.

The Prime Minister’s Office and the Labour and Finance Ministries did not respond to Reuters’ questions.

Exit polls project that the Bharatiya Janata Party (BJP) will win a big majority when election results are announced on June 4.

Increasing India’s share of global manufacturing

Mr. Modi’s re-election campaign was partly built on the promise of continued economic development. He’s pitching India as an alternative for global firms diversifying their supply chains from China.

India is the world’s fastest-growing major economy, but that includes a booming tech sector and a struggling older economy that doesn’t provide enough jobs for everyone else, said Josh Felman, the former head of the International Monetary Fund’s office in India. “What can be done now to provide employment — good jobs for these people — is manufacturing,” Mr. Felman said.

India successfully lured suppliers for major U.S. corporations like Apple Inc and Alphabet Inc’s Google. However, less than 3% of global manufacturing takes place in the country, compared to 24% for China, World Bank data shows.

The government plans to increase India’s share of global manufacturing to 5% by 2030 and 10% by 2047, according to an internal document seen by Reuters. It did not provide specifics.

Reuters spoke to 15 people — including bureaucrats, representatives of major investors, economists and trade unionists — who identified three significant obstacles holding India back from manufacturing hub status: restrictive labour laws, challenges acquiring land, and a rigidly inefficient tariff regime.

Fundamental issues

When Modi was chief minister of his home state of Gujarat between 2001 and 2014, he dreamt up an investment zone in the Dholera region. Legislation creating the Dholera Special Investment Region (DSIR) was passed in 2009 and local authorities began acquiring land for it in 2013.

The plan, Mr. Modi said during a 2011 visit to a Chinese port, was to develop DSIR along the “Shanghai model”.

Starting in the 1980s, China set up special economic zones along its southeastern coast that are widely credited for it becoming the world’s factory floor.

Land reform was a precursor for China’s manufacturing rise. Starting in the 1970s, Beijing separated ownership from usage rights, making it easier for investors to acquire industrial land, said Henry Gao, a Chinese trade expert at Singapore Management University (SMU). Beijing’s industrial zoning policies also made it easier for industries to set up in areas with ready access to materials and facilities, he said.

As Prime Minister, Mr. Modi has continued to stress the importance of industrial zones for India. In March, he described facilities under construction in DSIR as central to the creation of an Indian semi-conductor manufacturing hub. In January, Tata Group announced plans to build India’s first semi-conductor fabrication plant there. During a visit in March, Reuters also saw construction activity for an upcoming cargo airport and promotional billboards set up by real-estate developers. There were paved roads and a waterfront but little sign of bustling business.

DSIR hopes to attract more manufacturing companies by providing leases of up to 99 years on government-owned land, said Rahul Gupta, head of the Gujarat Industrial Development Corporation. Local officials have said that it took more than a decade to acquire land and award infrastructure contracts, but Mr. Gupta predicted there would be much more activity in about two to three years.

Outside such zones, industrial groups still have to undergo a “very difficult process” to acquire the large plots of land they need because title deeds are often unclear and holdings are fractured, said Richard Rossow of the Washington-based Center for Strategic and International Studies think-tank.

In May, Foxconn — whose local investment was trumpeted as a major success by Mr. Modi — was met with protests by farmers in Karnataka state unhappy with the compensation they received from local authorities for giving up their land to the manufacturer, Indian media reported. The Taiwanese company didn’t return a request for comment.

Labour reforms

In much of India, firms with more than 100 employees need authorisation from state governments to hire and fire. This prevents companies from adjusting their operations to meet demand, said Atul Gupta, partner at Bengalore law firm Trilegal.

The parliament has passed legislation to raise the threshold before official approval to 300, but State authorities that must consent to the changes have stalled the move.

Mr. Modi hopes that a strong win on June 4th will give him the momentum and political capital to push through their opposition, the two government officials said.

“No government wants to come across as giving permission to a company to let go of their employees (but)…this is just used to drag out the closure or the terminations endlessly,” said Mr. Gupta, who advocates labour reforms.

General Motors, for instance, decided to shut plants in Gujarat and neighbouring Maharastra in 2017, citing low sales. But unions opposed the closures and GM only received judicial approval to exit India in January. The U.S. carmaker declined to comment. To avoid such difficulties, companies end up using contract workers for extended periods, said labour lawyer Amrish Patel.

HSBC economists said that sweeping changes to labour regulations as well as land reforms are needed to sustain high growth. In a note to investors last month, HSBC economist Pranjul Bhandari wrote that such reforms could allow India to grow at 7.5-8% over the next decade, creating a wealth of jobs.

But lawyer and union leader Sanjay Singhvi said nearly 60% of the workers who benefit from current labour laws would lose protections if the BJP’s codes are implemented.

Praveen Chakravarty, a senior economics policy official with the main opposition Congress, told Reuters that labour law decisions should be left to States. His party’s manifesto calls for a review of the labour codes passed by parliament.

High tariffs

Manufacturing costs in India are also elevated because of tariffs on imports, including components for high-end manufacturing.

To encourage smartphone production, Delhi cut import duties on components to 10%. But competitor Vietnam already levies a rate of between 0% and 5% on equivalent inputs, according to the India Cellular and Electronics Association.

The average import tariff imposed by India on World Trade Organisation (WTO) members was 18.1%, compared to 7.5% for China, according to WTO data for 2022, the most recent year for which figures are available. Customs processes are also significantly quicker and less burdensome in China, said Mr. Gao.

Imports can clear customs in China in about 20 hours, said the SMU professor. It takes between 44 and 85 hours in India, according to a 2023 government study.

Beijing has focused its efforts on being a key node in the supply chain rather than attempting to own the entire chain, leading to greater efficiencies.

For instance, products exported by China often include inputs from other Northeast Asian countries, said Christian de Guzman of Moody’s Ratings. But Delhi “wants to have the entire thing come onshore,” Guzman said.

New Delhi:

From extending maternity leave benefits to relaxation in labour laws to providing creches, the policies led by the Modi government have enabled a significant number of women to join the workforce.

The effects are visible in the declining female unemployment rate and increasing female labour force participation. Data from the Periodic Labour Force Survey (PLFS) showed that the female unemployment rate decreased to 8.5 per cent in January-March this year from 9.2 per cent in 2023.

The female labour force participation rate (LFPR) in urban areas rose to 25.6 per cent during January-March, 2024, from 22.7 per cent last year.

Further, female worker population ratio in urban areas also rose to 23.4 per cent during January-March this year. In January-March 2023 it was 20.6 per cent.

The PLFS report, compiled by the Ministry of Statistics & Programme Implementation, is based on a survey of 44,598 urban households and 1,69,459 people in urban areas.

Prime Minister Narendra Modi had, in 2017, announced 26-week maternity leave for working mothers, instead of the earlier 12 weeks, for their pregnancy and delivery.

“The basic aim is to ensure proper care of the newborn, the future citizen of India, from the time of birth,” PM Modi had said at the time.

Earlier this year, the government in an advisory asked employers to provide paid maternity leave to registered road construction workers for 26 weeks for up to two deliveries.

In the case of adoption or commissioning, the mothers were entitled to get 12 weeks of paid maternity leave.

The advisory also included miscarriages. If a woman in the construction sector experiences a miscarriage, she is entitled to get leave with wages equivalent to maternity benefits for six weeks following the day of the miscarriage.

The government’s policies also asked employers to facilitate a safe and supportive environment for female workers during night shifts, ensuring transportation services for pick-up and drop-off, especially during night-time hours.

Further, PM Modi government’s also rolled out standards and protocols for setting up creches that will provide comprehensive childcare in a safe and secure environment, and also foster the overall development of children in the country.

“These Standards and Protocol focus strongly on standardising and institutionalising the Care economy, contributing significantly to the vision of ‘Women-led Development’.
 

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)