The traditional industrial clusters in Tamil Nadu, home to over five lakh small and medium enterprises (SMEs), are witnessing a sign of revival after the slowdown, but the biggest challenge is labour shortage. Industry representatives from the engineering, textile and leather clusters in the state complain that the National Rural Employment Guarantee Programme (NREGP) is diverting workers from their units.
The NREGP, the UPA government’s flagship programme, guarantees 100 days of employment every year to adult members of any rural household willing to do public work-related unskilled manual work at the statutory minimum wage.
In the first phase, community ponds had to be cleaned up to increase storage capacity during the rainy season. Later, construction of roads and tree plantations were included.
Though the programme started benefitting the rural economy, industry representatives say that it also began hurting traditional industries.
Take, for instance, Tirupur, India’s largest knitwear export town and home to over 50,000 SMEs, which depend largely on migrant workers. NREGP has led to reverse migration of labour to the rural areas, said A Sakthivel, president of the Tirupur Exporters Association (TEA). Of the six lakh people working in the town, 2-2.5 lakh are migrant workers, he noted. Many of them have started returning to their villages since they are getting money through NREGP.
“Our request is that the NREGP can be extended to the garment sector with conditions, including 280 days employment for Rs 80 per day, which is Rs 10 more than the government’s scheme, so that the government doesn’t have to spend any money once it is extended to the garment sector.” The industry has made a representation to the Union government, said Sakthivel.
He added, “Exporters will give a guarantee that they will employ a minimum of 50 workers (the maximum can be any number), of which 50 per cent will be women workers from rural areas.” With this, employment will be given to six million people in the garment sector, he added.
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Another industry association, which is ready to pay Rs 100 per day, said that NREGP offers lighter work; also, workers have to work for 3-4 days in a week, compared to six days a week in factories.
Jayakumar Ramdass, president of the Southern India Engineering Manufacturers’ Association in Coimbatore, which is home to over 50,000 SMEs in the engineering sector alone, said that due to the recession around one lakh people had lost their jobs in the city. Capacity utilisation was at one time only 20 per cent (though it is now over 55-60 per cent). However, of the one lakh people, not even 40 per cent have reported back to work. Companies have made several attempts to convince them, but they are happy with NREGP.
A report by the Tea Association of India (TAI) has revealed that about 40-42 per cent of workers had deserted the tea estates and joined the NREGP, while another 12 per cent were often availing of opportunities under the scheme, as most of the poor had been provided job cards.
Meanwhile, the Tamil Nadu government has allocated Rs 1,963 crore for the National Rural Employment Guarantee Programme (NREGP) for 2009-10, compared to Rs 1,722 crore in 2008-09- an increase of 13 per cent compared to last year. The government is also planning to hike the minimum wage from Rs 80 to Rs 100, and the number of working days from 100 to 150.