Change and Development in Industrial Society

Change and Development in Industrial Society

Question

How has liberalisation attacked employment patterns in India?

Answer

(i) The Indian government has followed policy of liberalisation since 1990s. Due to it private company, specially foreign firm are encouraged to invest in sectors earlier reserve for the government, including telecom, civil aviation, power, etc. Naturally government jobs and employment have come down and private specially multinational companies and firms jobs have increased in India.

(ii) Lincenses are no longer required to open industries definitely this policy have increased the chances of self-employment.

(iii) Due to liberalisation foreign products now easily available in Indian markets and shops. Due to this some of the labour have to loose their employment and jobs.

(iv) As a resort of liberalisation, many indian companies have been brought over by multinationals. At the same time some Indian companies are becoming multinational companies. An instance of the first is when, Parle drinks was bought by Coca Cola. Parle’s annual turnover was Rs. 250 crores, while Coca Cola’s advertising budget was alove Rs. 400 crores. This level of advertising has naturally increased the consumption of Coke across India replacing many traditional drinks.

(v) The next major area of liberalisation may be in retail. Due to coming of foreign companies and big business Indian houses very small traders, shopkeepers, handcart sellers and hawkers have lost their jobs of employment or their small business is adversely affected by big mall, showroom or Reliance, Subhiksha, etc.

(vi) Clamouring to enter India’s red-hot retail sector, the world’s largest chains, including Wal-Mart Stores, Carrefour and Tesco, are seeking the best way to enter the country, depspite a government ban on foreign direct investment in the market.

(vii) Recent large investments by major Indian businesses, like Reliance Industries and Bharti Airtel have increased the sense of urgency for foreign retailers....Last week, Bharti Airtle indicated that it was in talks with Wal-Mart, Carrefour and Tisco to set up a retailing joint venture...India’s retail sector is attractive not only because of its fast growth, but because family-run street corner stores have 97% of the nation’s business. But this industry trait is precisely why the government makes it hard for foreigners to enter the market. Politicians frequently argue that global retailers would destroy thousands of small local players and fledgling domestic chains.

(viii) The government is trying to sell its share in several public sector companies, a process which is known as disinvestment. Many government workers are scared that after disinvestment, they will lose their jobs. In Modern Foods, which was set up by the government to make healthy bread available at cheap prices, and which was the first company to be privatised, 60% of the workers were forced to retire in the first five years.

(ix) More and more companies are reducing the number of permanent employees and outsourcing their work to smaller companies or even to homes. For multinational companies, this outsourcing is done across the globe, with developing countries like India providing cheap labour. Because small companies have to compete for orders from the big companies, they keep wages low, and working conditions are often poor. It is more difficult for trade unions to organise in smaller firms. Almost all companies, even government ones, now practice some form of outsourcing and contracting. But the trend is especially visible in the private sector.

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