IMI to study employment, growth link

Companies are increasingly employing workers on contract basis thus making sure they do not become permanent employees.

Citing an instance of a steel factory in Gujarat where the workers were re-employed after every 240 days so that they do not become permanent employees, International Management Institute (IMI) Director CS Venkataratnam said in most cases companies under-reported employment.

Venkataratnam was of the view that there could not be any employment without growth, though economic growth can happen without much employment generation.

This relation between growth and employment will be made part of a pilot study to be carried out by IMI and the Confederation of Indian Industry.

Venkataratnam said the study would cover 100 companies in the National Capital Region of Delhi and would involve trade unions.

"Such studies shall be conducted at regular intervals to see whether growth has translated into employment generation," he said.

The study will compare the growth in turnover and profits of companies with the growth in the number of people employed by them.

About 100 million people had been added to the labour force since the 1980s, but most of the employment was happening in the unorganised sector, where labour laws were not observed, he said. Out of about 400 million labour force, 93 per cent is in the unorganised sector.

In his view, the Indian industry was fragmented as far as labour laws were concerned. "There are three reasons for the failure of labour laws in the country. One, there is a premium for violating law. You pay somebody to not abide by the law. Two, punishment is not a detterent. Three, for every person thrown out of job, there are people available to do the same job at half the salary," he said.