Home » Employment protection with new technology

Employment protection with new technology

by Vijay Garg
0 comment 5 minutes read

According to all global estimates, India has become the fastest growing economy in the world.  Global advisory body Price WaterhouseCoopers has said that in the year 2050, India can become the world’s No. 2 economy after China if economic reforms are implemented.  Global institutions in general are under pressure to implement reforms such as GST, infrastructure, free movement of capital and free trade.  It is worth noting that despite implementing these reforms, our economic growth rate has been falling continuously in the last six years.  So it is true that we have to change the economic policies.  But it is not right that with the help of these economic reforms we will be able to move forward.  Here it should not be confused with the paradox of world’s fastest growing economy and declining economic growth rate since our so-called fast growth rate is like a king in the blind.
The truth is that the decline in our economic growth rate cannot be controlled only on the strength of economic policies.  The biggest challenge in the current global economy is to adjust to the new technologies.  Professor Matthew Johnson of St Stephen’s University Canada has said that by the year 2035, 50 percent of jobs will be lost because these tasks will be done by robots.  This situation is particularly difficult for India as a large number of youth are entering our labor market.  If they do not get proper opportunities to earn income, they will become frustrated and indulge in criminal activities.  A professor from Aurangabad Maharashtra said that his MA degree students are indulging in criminal incidents like ATM breaking as they do not have employment.  On the other hand, food is being served by a robot in a restaurant in Kerala and our own metro train is run without a driver.  So we have two conflicting moves before us.  On one hand employment is being lost due to the use of new technologies and on the other hand a large number of youth are entering the labor market.
This problem has been compounded by our policies, which have asked small entrepreneurs to stand in direct competition with large enterprises.  The cost of production of large industries is low.  For example, a large pharmaceutical company will import raw materials from China, bring containers from Brazil and import electronic equipment from Germany.  They will have good quality engineers.  Production on a large scale also costs less, as it costs more to extract oil from the ghani while the cost of expeller is less.  Therefore, by promoting big industries, we are definitely producing cheap goods, but employment is being lost in it.  The biggest challenge not only in front of us but in front of the world is to provide employment to the youth in this changing technological scenario.
International consulting firm Arthur de Little and Bank of America have said that local production should be encouraged and small industries should be supported.  But the incentive will not be enough.  The reason is that the cost of production of the small entrepreneur will be high.  They have to buy raw materials in small quantities from local suppliers, install electronic equipment of inferior quality, and have to look after production, banks, accounts, workers, etc.  Their efficiency in all these tasks is less than that of big companies.  Efforts are being made by the Government of India to solve this problem by creating clusters of small industries.  A committee during the Manmohan Singh government had said that small industries should be clustered at special places like brassware in Moradabad and hosiery in Ludhiana so that they could be able to compete with big industries.  Many of these tasks can be done collectively, such as testing the quality of raw materials or installing pollution control equipment collectively, etc.  But despite this policy, small industries are getting beaten up in our country and the problem of employment is getting deeper.  Therefore, instead of doing only air talk of support, we have to understand that if small industries have to survive then they will have to give financial support.
We have to accept that the cost of goods manufactured by small scale industries will be high.  For example, a t-shirt made in a big industry can be available for Rs 200, then by a small industry for Rs 250.  This higher price will have to be borne by the consumers.  The t-shirt which we can get from a big company for Rs 200 will have to be bought by the consumer from small industries for Rs 250.  The question is why to do this?  I believe that we should consider this additional expenditure of Rs 50 as ‘Employment Tax’.
There are two paths before us.  If we get production from big industries, then unemployment will increase, crime will increase, unemployment allowance will have to be given and crime will also reduce economic development.  If the value of these unemployment allowances and crime control is given in the form of financial assistance to small industries, then small industries will run, employment will be generated by them and the government will not need to spend these.
The question is also that if the cost of production of tshirt in our country is Rs 250 then how will we export to the global market?  The solution is to allow cheap production by big industries for a particular export, but for the domestic market, production should be made from small industries only.  By doing this we can robotically produce for the global market and laboriously produce for the domestic market.  We can achieve both objectives.

 

You may also like

Leave a Comment

ABOUT US

Imphal Times is a daily English newspaper published in Imphal and is registered with Registrar of the Newspapers for India with Regd. No MANENG/2013/51092

FOLLOW US ON IG

©2023 – All Right Reserved. Designed and Hosted by eManipur!

Adblock Detected

Please support us by disabling your AdBlocker extension from your browsers for our website.