Labour shortage for India Inc projects - CEOs point fingers at MNREGA

Discussion in 'Economy & Infrastructure' started by parijataka, May 14, 2013.

  1. parijataka

    parijataka Senior Member Senior Member

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    Labour shortage is affecting not only industry but also farming. In my native place during harvest time farmers are hiring harvesters due to lack of labour. With so many millions living in poverty and under employed here we have industry lacking workers. Congress is rolling out schemes one by one that will be impossible to roll back by any future governments as it will be politically unacceptable. Whither India with so many entitlement schemes.

    Labour shortage for India Inc projects
    CEOs point fingers at rural job guarantee and related govt welfare schemes; say mechanisation an increasingly viable option

    For many Indian chief executive officers (CEOs) planning to start new units, the only problems aren't land acquisition, environment clearances and fund raising. Getting labour at plant sites is fast becoming extremely difficult, as the National Rural Employment Guarantee Scheme (NREGS) is creating a labour shortage, they say.

    Take the Aditya Birla Group's UltraTech Cement, planning to spend Rs 12,000 crore in expanding its capacity. "We are facing an acute shortage of labour, which is impacting our expansion," says Adesh Gupta, chief financial officer of Grasim, the holding company of UltraTech. "As we go forward, we have decided to use a lot of machines in our plants to replace labour."

    NREGS, launched by the central government in 2005, offers 100 days of guaranteed work in a year to each rural household. The scheme is a hit among unskilled workers, as they needn't migrate to other areas in search of work. Apart from NREGS, the other government welfare schemes have also resulted in more rural incomes, encouraging labour to stay at home.(HOW THE GOVT SPENDS IN RURAL INDIA)

    "There is a growing shortage of labour," said Rahul Mehta, who has 30-odd years of experience in the apparel business and is president of the Clothing Manufacturers Association of India, with nearly 2,000 manufacturer members and 15,000 members which are retailers. "The surplus labour situation that India was known for is fast-changing with schemes such as NREGS. Also, our outdated labour laws result in problems in employing contract labour."

    This shortage comes at a time when corporate India plans to restart work on new projects and expansion, after a prolonged slowdown. Many big companies - Reliance Industries, Steel Authority of India and Oil & Natural Gas Corporation - plan to spend hundreds of crores to expand capacity.

    With interest rates cooling, oil prices falling and European and American markets recovering, many companies feel this is the right time to start work on raising capacity to prepare for the upturn expected in the second half of the current financial year. However, say analysts, with labour shortages getting worse, many which plan new units, such as Maruti or Honda, will expedite schemes to mechanise their plants on the lines of US and European companies.

    Apart from NREGS, the Union and state governments are running several programmes in rural India to address critical issues on education, health and sanitation. Apart from NREGS, the Sarva Shiksha Abhiyan and spending on the National Rural Health Mission add to rural incomes, as they expand jobs for teachers and support services.

    A little more than half of welfare spending is on education and of this, about a fifth is on teacher salaries. In 2011-12, about 4.2 million teachers were hired by the government to support its programmes. Spending by state and central governments on education have risen quite sharply after FY06. Despite a minor slowdown in FY12, government spending now totals Rs 2.7 lakh crore, almost six times the expenditure on job generation programmes.

    "All these programmes have resulted in labour staying at home (villages) and not working in harsh working conditions," says a CEO of an infrastructure company.

    While total spending on other programmes like rural electrification is not as large as on welfare schemes, its impact on productivity has been dramatic. Analysts believe this, combined with the jump in telecom penetration, is the prime reason for the jump in rural wages in recent years. And, this expenditure is to pick up in coming years.

    "All this is good news for the country but for Indian companies, this (labour) is an unexpected problem in hand and the only way forward is to spend heavily on machines to replace them," says a CEO.
     
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  3. pmaitra

    pmaitra Moderator Moderator

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    Looks like the CEOs are not happy that there aren't enough labourers willing to work of measly pay. Why don't the CEOs themselves get onto the fields and start working? :lol: They can still get the same pay as they are currently drawing. Would that be acceptable to them? Let the market call the shots. If there aren't enough labourers, introduce mechanization of agriculture. What is the point in complaining? At least, this will spawn a farm equipment industry in India, and generate jobs.
     
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  4. pmaitra

    pmaitra Moderator Moderator

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    I must also add, this MNREGA Scheme by the government should stipulate that at least 50 days, out of the 100 days, must be spent in the border regions building roads. If the government is guaranteeing the jobs, the government should be able to call the shots where to employ these people.

    Apropos this statement in the OP:
    Yeah, right, like the garment industry of Bangladesh, we should encourage harsh working conditions. Looks like our CEOs are more than willing to do business with the US, but are not willing to be friendly with schemes that benefit the labourers. It is high time there is strict implementation of minimum labour wage.

    Related: http://defenceforumindia.com/forum/...e-biggest-brands-make-clothes-bangladesh.html
     
  5. pmaitra

    pmaitra Moderator Moderator

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    Another good way to get things done is to increase the incarceration rate. We have too many petty criminals who roam free. Get all these criminals off the streets, and send them to work in the "harsh conditions" (such as development work in remote). This will not only arrest crime, but will take out people from the unskilled labour supply, thus further raising the demand for labourers, which in turn will force these "CEOs" to increase the wage of the labourers.

    Interesting Information: http://en.wikipedia.org/wiki/List_of_countries_by_incarceration_rate

    [​IMG]
     
  6. Ray

    Ray The Chairman Defence Professionals Moderator

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    Under the recent wage revision, workers will be paid the maximum daily wage of Rs 214 in Haryana, followed by Rs 210 and Rs 209 in the Union Territories of Andaman & Nicobar Islands and Chandigarh, respectively.

    On the lower side of the wage payment are states like Sikkim, Tripura, Nagaland, where MNREGA workers will be paid Rs 135 per day. Workers in Bihar and Jharkhand will get a daily wage of Rs 138.

    Who would like to leave his home to go and work elsewhere when the money for MNREGA allows one to put in that much of even less work right where one lives with adequate money to live on.

    Why should one carry out backbreaking jobs on farming or live away from home working for factories and living in slums, where one has to pay a rent?

    It has become a case of Robbing Peter to Pay Paul.

    The scheme is doing social service, but then the UPA should not complain about the slow growth rate and low GDP or even rising food prices since areas that can increase growth, or ensure food are being denied the assets (workers) essential to engine that growth!
     
    Last edited: May 14, 2013
  7. sob

    sob Moderator Moderator

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    It has been proven that MNREGA is responsible for jobless growth. I have seen personally seen labour from Bihar, Orissa prefer to work for 7 months in North and then rush home to get enrolled in MNREGA for 3 months and relax for one month. after a 4 month holiday they are back to their old jobs where their old employer is more than happy to take them back with no questions asked.

    Recently CAG in a scathing report pointed out that almost 30% of the work carried out under this scheme was not supposed to have been covered under this and lesser said about the pilferage.
     
  8. parijataka

    parijataka Senior Member Senior Member

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    Off topic - one of the reasons the Food Security Bill is being opposed by states is that central govt will foot only part of the bill and the states will have to shell out out the rest. I say this is an ideal way to make the states less profligate - this will discourage states like West Bengal from giving shelter to illegal Bangladeshis who are encouraged by all parties like Communists, Congress and TMC.

    Let us have MNREga but let each fund their own scheme.
     
  9. Ray

    Ray The Chairman Defence Professionals Moderator

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    But on paper every project has been completed!
     
  10. sob

    sob Moderator Moderator

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    Sir, that is why our babus love Paper so much, even the currency is paper....
     
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  11. lcatejas

    lcatejas Regular Member

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR


    Babu's are very happy to running congress paper schemes on paper...... :laugh:
     
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  12. sob

    sob Moderator Moderator

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    Yeah but we have yet to hear anything concrete from the principal opposition party. that is a shame...
     
  13. anoop_mig25

    anoop_mig25 Senior Member Senior Member

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR


    Nah instead they would some kind of loan and then waste like they do all this year
     
  14. anoop_mig25

    anoop_mig25 Senior Member Senior Member

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    Did any body saw todays ADD in almost every news paper . MNERGA eliminated bonded labour.

    I sat it eliminated every labour
     
  15. parijataka

    parijataka Senior Member Senior Member

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    AFAIK Bonded labour was outlawed in 1975.
     
  16. LordOfTheUnderworlds

    LordOfTheUnderworlds Regular Member

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    200 rupees that too for only 100 days in a year is not even peanuts. but that also is too much according to Indian elites. This is because Indians have been used to cheap slave labour for thousands of years thanks to caste system and feudalism, and find it difficult to adjust to the change in status quo. they just take it for granted that there will always be someone to do physical work for them at cheap rate. the labour is not going to remain same in 21st century, but instead of adjusting to the changed reality by being innovative, using technology, it is easier to put all blame on MNREGA and dream of bringing back old days. The same Indian industry and traders needed and received government protection and subsidies for decades.
     
    Last edited: May 14, 2013
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  17. t_co

    t_co Senior Member Senior Member

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    Why pay people to stay at home doing unproductive labor? If rural markets cannot support that many man-hours of labor each year, let the surplus migrate to cities and work in manufacturing...
     
  18. parijataka

    parijataka Senior Member Senior Member

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    MNREGA should be used for some useful purpose IMO - in Gujarat MNREGA labour was used to renovate village ponds and in check dams. In most other states it is just a scam.
     
  19. LordOfTheUnderworlds

    LordOfTheUnderworlds Regular Member

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    That is fine, but it is administrative and policy issue. It does not explain why the elites should be complaining about labourers getting 200 rupees per day. It is the indian (subcontinent) mentality inherited from the culture of old generations consciously or unconsciously, where there is no respect and dignity for physical labour and it is presumed that someone will (and should) do physical work for me for almost free like the elves of Hogwartz, and what ever conditions they have to live in is something natural and normal.

    I will quote one comment from that page

     
    Last edited: May 15, 2013
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  20. parijataka

    parijataka Senior Member Senior Member

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    Agree. Indians are mired in feudal mentality complicated by caste system, plus there is no dignity of labour. Changing though slowly.
     
  21. pmaitra

    pmaitra Moderator Moderator

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    Re: Labour shortage for India Inc projects - CEOs point fingers at MNR

    Firstly, MNREGA should be there. It is a good effort. As long as the people are doing something, even if it means collecting garbage from the streets, digging irrigation canals, painting the walls of civic buildings, or whatever, this scheme should stay. If the US can give food stamps to unemployed people, who, effectively get paid for doing nothing, MNREGA is a much better scheme.

    Secondly, these CEOs should quit complaining. If they cannot afford to hire people, they don't deserve to be CEOs. If they are expecting people will work for measly wages, they are still stuck up in the feudal ages, them wearing a suit and a tie notwithstanding. There is a lot of migration of labour, especially during harvest time. Obviously, some people do pay enough to get people to work in the agricultural fields. If the CEOs cannot find enough labour, they can get down on their knees, and work in the fields (for CEOs in the agro business), or start sewing shirts and trousers (for CEOs in the garment business), should start building walls and pouring concrete (for CEOs in the construction business), etc..

    If you cannot give a hand to those at the bottom of the pyramid, you have no right to sit atop the pyramid.

    A couple of lessons for our CEOs, for crying out loud:

     

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