by JAYATI GHOSH
In a country in which more than 96 per cent of the workers are anyway on informal contracts or are self-employed, and where wage costs are estimated to account for less than 4 per cent of the total costs in manufacturing, it should be absurd to see labour laws as a constraint on economic growth. Here, in a plywood factory near Kochi PHOTO/K.K. Mustafah
It is widely believed that one important reason for the remarkable victory of Narendra Modi and the Bharatiya Janata Party (BJP) in the April 2014 general election was the ability to tap into the aspirations of a dominantly youthful population that is anxious to experience a better life through better access to education and good quality regular jobs. The dominant post-election narrative has also harped on the idea that the previous United Progressive Alliance (UPA) government had missed the point by focussing on so-called “welfare” schemes rather than on economic growth that would deliver those jobs. The Modi government was expected to change tack by ensuring better economic conditions, which in turn would generate better social indicators as well through higher employment generation and better remuneration for self-employed activities. The BJP’s advertising campaign before the election raised precisely such expectations by promising “acchhe din” (good times) in a phrase that is now coming back to haunt the present government.
However, there are several reasons why this public perception—of the policies and the impact they have had, of both the previous and the current governments—is flawed and misleading. It is certainly true that aspirational youth—and their parents, who are possibly no less aspirational for their progeny—put a great deal of hope in the promise of change represented by Modi’s campaign and by the man himself. However, it is wrong to believe that a focus on social programmes was the problem for the UPA. Rather, the problem was that by the time of its second tenure (and without the external pressure delivered by the Left parties) the UPA government itself had already put social programmes very much on the back burner.
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