The Covid-19 pandemic has made visible the major fault lines in the human resource development practices of the government and in the industries. At a macro level, India is in a very sweet spot having an average age of 29 years and a market size of 1.3 billion, making it a very attractive destination for global companies. The European countries that have small populations can easily source talent from India. This can reduce unemployment.
The prime minister, in coming to office for the second time, had focused strongly on an ambitious plan for skill development. However, the National Skill Development Corporation (NSDC) could hardly train 4% of the Indian youth in the last many years. This is quite shocking. The government, instead of depending on the NSDC, can decide to involve the public sector and private sector industries to provide vocational and industrial training in their premises to the youth who are living within a 25 km radius of their factories.
The companies may also be asked to offer jobs, subject to vacancies. The government can rope in banks and NBFCs to provide micro finance to trained youth to start small enterprises. The government should allow industries to take the expenditure on skill development training under the budget of CSR and can give them some income tax exemption. Skill development in HRD, as realised by the honourable prime minister, is of utmost importance today to solve the unemployment problem.
When the lockdown was announced for Covid-19, the government had given a clear advisory to all the industries to continue to pay wages and not terminate workers. However, many businesses terminated a huge number of people all over India or stopped paying wages. In most of the industries in the manufacturing sector, the wage cost is only 6-7% of the annual turnover. With the lockdown, while sales was hit, the companies also substantially saved on raw material, power and other administrative costs. Thus, there was no real necessity to violate the government advisory and terminate the services of the employees. This was a bad HRD practice.
However, many companies like Asian Paints, HDFC Bank. Maersk, TCS and multinationals did not terminate their executives and workers, and also allowed their employees to work from home. We can term this enlightened HRD. In another area of HRD, the government should seriously consider providing social security to all poor families. This has been given as a recommendation by many committees constituted by the government.
The government needs to aggressively start providing employment by increasing the spend on infrastructure projects all over India along the Bharatmala so that the poor can get jobs near their residence and are not forced to migrate to large cities in search of jobs. This will also relieve the large metros from overpopulation. It is important to realise that 93% of the Indian workforce is in the unorganised sector. These workers have absolutely no protection in terms of wages, job security or benefits after retirement.
One can safely say that they have no human rights protection. There is an urgent need to bring support to them at par with the protection and facilities being offered in the organised sector. The purpose of the Contract Labour Regulation and Abolition Act was to reduce the number of contract workers and get the unorganised labour at par with the organised workers. However, strangely, the number of contract workers is increasing in all industries with the encouragement of the government.
At present, if we evaluate, we will find most manufacturing industries have only 30% of the workforce as permanent labour and 70% of the workforce is employed on contract—they have no job security, or equal wages compared to the permanent employees and also have no scope for growth. The essence of the Contract Labour (Regulation and Abolition) Act was to offer a facility to the industry to induct contract labour for work that was due to a sudden increase in workload. The Act categorically specifies that contract labour cannot be used where the work continues throughout the year.
However, industries are employing contract labour even if the nature of the job is perennial and thus violating the CLRA Act. In the last few months, the government is making efforts to amend labour laws to improve the ease of doing business in India. Instead of bringing the unorganised sector at par with the organised sector, the new framework will endanger even the rights of those working in the latter.
The government has been erroneously advised that foreign companies will be attracted to India if there is a hire-and-fire policy. The truth, however, is that foreign companies and IMF have clearly expressed that they want to ensure the human rights of workers and give proper wages as they consider the employees as an intrinsic part of the system—so that they are happy, motivated and can contribute to higher productivity and profitability. The government has good intentions but needs to induct good HRD advisers.
Ashoke K Maitra
Senior HRD Adviser to Industries
(ashoke.maitra@gmail.com)