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Losing the plot

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  • As has been argued in these columns, India needs to radically expand the scope of low-cost manufacturing that requires semi-skilled or low-skilled labour. Given the appalling state of our primary education, factory work that can provide on-job basic training is the best guarantee of creating jobs outside cities and towns. Among the many policy quirks that prevent an expansion is the rule on industrial employment that makes labour flexibility extremely costly for employers. That’s why there was a proposal that SEZs be spared usual labour laws and of course there were howls of protest. As our columnist argues today it is not that reforms are not creating jobs. But a massive shift to industrial employment has not happened because policymakers can’t or won’t admit the fundamental economic history lesson: general economic security is always born on factory floors. If you can’t give them jobs, promising them land is almost cruel.

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