Mukul Sharma

A reality check on employment losses in India shows some urgent tasks, including the compilation of reliable and regular statistics.

The right to work involves just and fair conditions of employment, and protection against unemployment. It also entails access to employment without discrimination, and a supportive structure that aids access, including appropriate and free choice, skill-building and vocational education. However, Economic Survey 2008-09 and Union Budget 2009-10 demonstrate how the burning issue of job losses – involving retrenchment, lay-offs, redundancy – in the time of the global financial crisis and economic slowdown, is perhaps the least understood of the economic, social and political concerns.

There is clear evidence that job losses have worsened in many sectors in the recent past, posing a threat to the overall inclusive growth prospects, and that they are a challenge to the continuation of successful poverty reduction efforts. Job insecurity in the country is on the rise, and an expected decline in growth and investment is likely to exacerbate this problem. It is critically important to recognise the issue, and build the political will to contain the anti-labour atmosphere and practices. Support structures should come with innovative policies and programmes.

Economic Survey 2008-09 says: “While comprehensive employment data for current financial year is not available, some sample surveys have indicated employment losses in the wake of the global financial crisis and economic slowdown.” According to a sample survey of 2,581 units conducted by the Labour Bureau under the Ministry of Labour and Employment, during October-December 2008 there was a decrease in employment by about half a million. Another survey involving a thin sample conducted to assess the employment situation in January 2009 over December 2008 indicated a loss of about 100,000 jobs in January 2009. A sample survey conducted by the Department of Commerce for 402 exporting units revealed job losses (direct and indirect) to the tune of 109,513 persons during the period August 2008 to mid-January 2009. Two other surveys for the period August 2008 to February 9, 2009, and August 2008 to February 2009, revealed direct and indirect job losses of 117,602 and 119,159 respectively. A survey conducted by the Labour Bureau for the period January to March 2009 covering 3,192 units indicated improvement in certain selected sectors, with employment rising by a quarter million.

However, in sectors such as leather, metal and transport, the decline in employment continues. In all sectors, contract workers are the worst affected in terms of loss of income or employment. Seeing the status of these contract workers, the fate of workers in the informal sector who are neither protected nor surveyed can be easily understood.


Other than micro-sample surveys, there are several macro-reports and projections about job losses in India, present and future. The International Labour Organisation’s Regional Office for Asia and the Pacific, in its report ‘The Fallout in Asia: Assessing Labour Market Impacts and National Policy Responses to the Global Financial Crisis’ (February 2009), notes that Indian workers in sectors with high exposure to the global market, such as civil aviation, textiles, leather, gems, and jewellery, which employ millions of women workers, have already faced serious job cuts. UNCTAD’s draft report ‘Impact of Global Slowdown on India’s Export and Employment’ (May 2009) shows that in sectors such as textiles, gems and jewellery, ores and minerals, the total job loss in India was around 1.16 million in 2008-09. It is estimated to be around 1.3 million in 2009-10.

Net employment is the sum total of jobs created and lost in different sectors over time. Promises of new jobs and employment, skill-building and training bring avenues to the working population. However, the programmes proposed in Budget 2009-10 are on a beaten track and do not hold much hope for the future. Take, for example, the employment exchanges that are now promised to be upgraded to counter job losses and facilitate new employment. There are 965 employment exchanges in India: 91 have been set up since 2000. However, no significant improvement in terms of reduction in the number of applicants on the live registers has been recorded; in fact, the number increased by 138,000 during this period. The percentage of placements on the vacancies notified in the exchanges dropped from 66.21 per cent in 2001-02 to 50 per cent in 2006-07, even as the number of registrations with employment exchanges grew substantially.

A study by Assocham, the Associated Chambers of Commerce and Industry of India, titled ‘Relevance of Employment Exchanges in the New Millennium’ (March 2009) revealed that with respect to the 37 employment exchanges in Bihar, the total number of placements was only four each. Assam had on an average a minuscule seven placements per exchange out of its 52 exchanges. Uttar Pradesh provided 37 placements per exchange from its 90 exchanges. Andhra Pradesh managed to provide 42 job placements each out of its 31 exchanges. Karnataka provided 45 placements per exchange from a total of 37 exchanges in a year. In the National Capital Territory of Delhi, for the financial year 2006 the Department of Manpower and Employment had the budget estimate of Plan and non-Plan expenditure totalling Rs. 57 lakh, which could be translated into only 70 placements in 2005. Given this track record, without an active overhaul of the employment exchanges what can we hope to achieve through computerisation and on-line registration facilities as noted in the Union Budget?

Skill development

Another noble area proposed in the budget is skill development, where no coordinated action and programmes in terms of catering to the needs of millions of new or redundant workers has been comprehensible. We have a set of bodies created in the name of skill development. There is the Prime Minister’s National Council on Skill Development, which has set a target of creating 500 million skilled persons by 2022. We have the National Skill Development Coordination Board, which is entrusted with the coordination and harmonisation of the government’s initiatives for skill development spread across 17 Central Ministries and State governments. A National Skill Development Corporation (NSDC), a non-profit company, has been set up under the Ministry of Finance. There are different sub-committees of the National Skill Development Coordination Board. There are suggestions to create State-level structures as well. There is a National Council for Vocational Training. With all this, the current capacity for skill development in the country is a mere 3.1 million. Seeing the fate of the retrenched or laid- off workers, surely this is not reaching them the least.

After the discussions at the 42nd Indian Labour Conference (New Delhi, February 20-21, 2009) on the global financial crisis and its effects, namely, large-scale downsizing, layoffs, wage cuts and job losses, the Ministry of Labour and Employment re-constituted the industrial tripartite committees in December 2008. There was one each for cotton, textile, jute, road transport, electricity generation and distribution, engineering, sugar and plantation industries. They were required to act on the job losses. These are non-statutory committees formed with the objective to provide a forum for dialogue on the problems that enterprises and workers face in particular industries, and to explore possible solutions. However, nothing came out of them.

Thus, other than promises to create employment in the future, there has been nothing concrete and visible either to stop job losses or to rehabilitate unemployed workers. No calls for employment generation will be complete and credible enough unless they are accompanied by calls for the reform of employment loss. Employment creation, in other words, cannot be separated from employment loss. Further, the employment and unemployment data in India are provided by the National Sample Survey Organisation (NSSO). The latest available data are for 2004-05. There have been demands from various quarters, including from the Ministry of Labour and Employment, for unemployment data at more frequent intervals. The need for reliable and regular unemployment statistics has become more urgent in the context of the global recession and job losses.