Labour

A Few ‘People’s Budget’

It is rather amusing that in today’s context, when the winds seem to be changing directions and there are talks of higher tariff walls and protectionist moves, the prescription remains the same – more deregulation.

Much of the discussion in the follow up to the economic survey and the Union budget has been around the tax reliefs for the middle classes. The effective beneficiaries of this relief is less than 2% of the country’s population. However, the air time given to this in the budget analyses in newsrooms has overshadowed certain other pertinent and pernicious ideas that were in the realm of deregulation.

In fact, finance minister Nirmala Sitharaman in her budget speech announced the setting up of a high-level regulatory reform committee that will share its recommendations in a year’s time towards promoting ‘ease of doing business’. This committee has been tasked to “unclog the regulatory cholesterol” particularly in laws pertaining to inspections and compliances.

There, of course, has been a concerted push towards “trust based governance” in successive budgets and subsequent easing of clearances over the recent years. Yet, it is imperative that we analyse both – the rather curious rationale, as well as the implications of what appears to be a concerted push towards further regulatory dilutions this year.

Deregulation refers to a policy-driven dilution of government regulation over key sectors, activities and procedures. Scaling down environmental protection criteria, striking off labour welfare measures, allowing private investment and ownership in sectors of public importance such as coal, are some of the instances of deregulation that the government uses, often in the name of boosting ‘growth’.

However, past experiences show that diluting government control has worked in favour of big business at the cost of labour, environment and more. It is for this reason one must track its push towards deregulation.

Shifting symptoms, yet same prescriptions

The economic survey provides the material and philosophical underpinnings of the urgent need for deregulation or what it calls “getting out of the way”. One of the rationale it harnesses is from the current geopolitical changes. It, in fact, correctly outlines the tectonic shifts that are unsettling many of the certainties of the earlier decades. Be it the Trump tariffs, the geo-economic fragmentations or the trade wars, it highlights that “the promise of shared benefits from a globalised world with open trade, free flow of capital and technology, and sanctity for rules of the game may be behind us”.

It outlines the implications of the same in terms of the anticipated fall in our global exports and also a shake-up in the foreign direct investments that had been aided over the decades by liberalised trade and globalisation. It also correctly identifies that in this changed geopolitical scenario “we need to intensify our efforts on the domestic front”.

However, the prescription it has on offer for this diagnosis seems to be the same as the one given thirty years back and for exactly the opposite symptoms.

It says that we need to look inward, that we need to unleash the potential of domestic-led growth. And for that we need deregulation. Thirty years back when the “winds of change” were blowing towards open markets and free trade, we were told that we must deregulate and ease rules for businesses to flourish, for foreign direct investments to find our shores habitable.

Also read: It’s Time to Re-Regulate, Not De-Regulate

Under the unambiguous motto of ‘ease of doing business’ the first two decades of the 21st century saw the World Bank champion the push to marketise and privatise key resources and areas such as water, education and health, and harness them for private profits and global capital. Anchored in the ‘ease of doing business index‘ jointly developed by the World Bank, this approach faced severe criticism for encouraging dilution of labour and key regulatory social and environmental safeguards, especially in ‘developing’ countries.

We were told that governments must step aside in the name of promoting business friendliness. So, hasn’t the government been “getting out of the way” for the last thirty years in any case? It is rather amusing that in today’s context, when the winds seem to be changing directions and there are talks of higher tariff walls and protectionist moves, the prescription remains the same – more deregulation.

That seems rather convenient.

Squeeze labour per unit of investment

The economic survey says that in the absence of export-driven growth and given the apprehensions about falling foreign direct investments, we need to concentrate more on the “efficiency” of investments. That is the only way, it says, of maintaining the levels of high GDP required to achieve the status of ‘Viksit Bharat’ by 2047.

How can efficiency be improved? “By reducing the time taken for investment to generate output and by generating more output per unit of investment,” it says.

That is what deregulation is expected to achieve by easing clearances and eroding compliances related to labour protection, workers’ well being and the environment. In other words, we need to attain the ‘Viksit Bharat’ status by following a growth path that squeezes labour.

In a cynical twist of logic, the survey argues how regulations meant for protecting workers in fact act against them and their supposed “long term” interests. As firms try to avoid such compliances, they tend to stay informal and avoid scaling up, it says. This, it says, in turn discourages job creation, limits wages and encourages informal employment. As a result, it advocates the removal of hard earned labour rights thereby in effect blurring the lines between the formal and the informal.

Also read: ‘Indians Spend a Third of Their Salary on Loan EMIs’: Report

In effect, it argues for giving up even the idea of decent jobs or labour welfare. As examples, it cites what it considers “unnecessary” rules like “double rate for overtime work”, like the provision of “rest-rooms or canteens” in factory premises, or even “safety measures mandated for women” working in night shifts.

Similarly, it says that our compliance and inspection based regulatory framework is not realistic and is better done away with. As an example it cites that only “644 working inspectors are available to oversee compliance in 3,21,578 factories, with each overseeing around 500 factories”.

However, while several labour rights activists may quote the same figures to argue for more inspectors, the economic survey argues in favour of doing away with such “unrealistic expectations”. Despite having the ambitions of a ‘Viksit Bharat’, it seems we don’t have the state capacities (it claims) to actually undertake such oversight over labour conditions.

In other words, our path towards a ‘Viksit Bharat’ needs to pass through sweat-shops and unregulated hours where the maximum can be squeezed per unit of investment.

A race to the bottom

The proposal to develop the Investment Friendliness Index as a marker of ‘competitive cooperative federalism’ further imagines states as competing markets and state governments as fund raisers.

The new Index is yet another addition to NITI Aayog-monitored indices such as Global Innovation Index, Indian Innovation Index and Export Preparedness Index. Offered as neutral performance indices, these measurements, as in the case of World Bank indices, promote real world governmental actions.

What this effectively means is that states are encouraged to compete in a race to the bottom as to who offers the worst deal for labour, health, environment and climate.

After all, none of these are novel ideas. We have witnessed the “efficiency” with which deregulation over the last three decades has eaten into the workers’ share and has fattened profits.

In the 1980s, the average share of Gross Value Added that went to workers’ wages was 24.7%, while the share that went to profits was 15.0%. By the 1990s, this had reversed, with wages declining to 15.9% and profits increasing to 24.2%.

Over the last decade, that is 2012-2023, the situation has worsened further, with wages stagnating at 13.0%, while profits have surged to 40.0%. This reflects a systematic decline in labour compensation as we have trampled upon workers’ rights in the name of ease of business.

Table 1. Percentage share of factor payments in GVA (nominal prices)

Principal characteristics of factories – All-India aggregates

Time Period	Wages	Other Worker Payments	Rent	Interest	Profits	Other Payments	GVA
1982-1992	24.7	13.8	1.3	23.3	15	21.9	100
1992-2002	15.9	11.5	2.1	22.9	24.2	23.3	100
2002-2012	10.7	11.0	1.6	11.5	45.5	19.7	100
2012-2023	13.0	15.0	0.9	12.4	40	18.7	100

Source: Annual Survey of Industries, various years, as reported by the Economic and Political Weekly Research Foundation (EPWRF).

Note: For the decades, the y-o-y average has been taken.

Share of factor payments in GVA

In whose name and for whom?

It is insidious that the economic survey shoots its deregulation agenda from the shoulders of the MSMEs. It argues that deregulation is “more critical for MSME growth than large enterprises”.

While large enterprises tend to find a way around compliances, it says that it is the smaller enterprises that are at the receiving end of compliance costs of regulations. However, that was the very precise criticism that was posed against the goods and services tax (GST) which the economic survey still celebrates as one of the government’s biggest achievements in terms of reform.

GST was a major shock that hit the unorganised sector the hardest and the worst sufferers were the MSMEs. A survey-based report released at the end of 2022 reveals that of the enterprises covered, 53% of the MSMEs reported a 10%-30% reduction in turnover, while 36% reported their turnover to have reduced by more than 30% after the implementation of the GST.

Among them, it is the micro-enterprises that reported the greatest losses.

Be it in terms of the dilutions in environmental clearances or the erosion of labour related compliances, it is always the bigger players and the corporates who will benefit the most from deregulation.

Likewise, it is India’s working masses at the bottom of the pyramid who would be at the receiving end in terms of lost rights and declining share in wages.

Also read: Unemployment and Price Rise Biggest Failures of the Modi Government: Survey

If the government really needed to boost the MSMEs, it could have done so by subsidising their capital input costs – machineries, equipment or loans, instead of diluting labour/environmental laws. If the government was really interested in boosting aggregate demand, it would have increased spending on quality public healthcare, education and social security, instead of tax reliefs to such a small segment.

It would have created decent jobs with livable wages instead of advocating for further deregulation.

Finally, even as the consensus on globalisation among its erstwhile champions in the West is under severe strain, it seems that the strategies evolved by the World Bank for penetration of global capital into the third world continue to be relevant in this changed scenario.

They are being deployed by India to create a more ‘friendly’ environment for private profiteers – mainly domestic businesses but also global ones. These are likely to benefit segments of favoured Indian industrialists.

Anirban Bhattacharya is a Consultant at the Centre for Financial Accountability (CFA). Amitanshu Verma works with the National Finance team at the CFA. Pranay Raj works as a Data Analyst at the CFA, New Delhi.

Turning Silver into Gold: India’s Aging Workforce Needs to Be Utilised

Despite a high elderly population, the concept of silver labour – continued workforce participation by older adults – remains underdeveloped in India.

India stands on the cusp of a significant demographic transition, facing a critical opportunity to leverage its aging workforce as an economic asset. As the population ages, the country faces the dual challenges of supporting its elderly citizens and managing the socio-economic impact of an aging workforce.

If managed effectively, the aging population could become a powerful economic asset through what is termed ‘silver dividend’ – the economic potential of elderly individuals in the workforce. While many discussions surrounding India’s demographic dividend have focused on its young population, the silver dividend can unlock the potential of the other half of the workforce.

The silver people

India’s demographic transition has resulted in an increasing proportion of its population entering the silver age, typically defined as individuals aged 60 or 65 years and older.

According to the last Census projections, the elderly population is expected to reach 13.1% of the country’s total population by 2031, with an annual growth rate of 3.28%, up from 8.6% in 2011. As the elderly population rapidly grows, addressing the employment and well-being of older adults has become increasingly urgent.

Several states are already experiencing a higher proportion of elderly residents compared to the national average. For instance, Kerala (12.6%), Tamil Nadu (10.4%), Andhra Pradesh (10.1%), Himachal Pradesh (10.2%), Punjab (10.3%), and Goa (11.2%) have all reported high elderly populations according to the 2011 Census.

Untapped labour

Despite a high elderly population, the concept of silver labour (continued workforce participation by older adults) remains underdeveloped in India.

According to the latest Periodic Labour Force Survey (PLFS), only 26.8% of people aged 65 and above were part of the labour force in 2023-24. It also must be noted that this rate has increased by 5.4% points when compared to the 2017-18 rate.

While life expectancy continues to rise, it is crucial to also enhance the labour force participation of the elderly.

The employment conditions for elderly workers across both rural and urban India remain challenging. However, the dynamics of labour force participation differ between rural and urban areas. The labour force participation rate (LFPR) among elderly workers in urban areas has stagnated from 2017-18 at 16% till 2023-24. In rural areas, it has gone up to 31.2% – an increase of 7.4% points when compared to 2017-18 rates.

Source: Periodic Labour Force Survey (2017-18, 2023-24), based on authors’ calculation.

A significant driver of this increase is the rising participation of elderly women in the labour market. In rural areas, the LFPR of elderly women increased substantially by 10.5% points. However, among the males, the increase happened only by 5.2% points only.

In contrast, the trends in urban areas show a decline in elderly male participation, while female participation saw a slight increase during this period.

These patterns underscore the complex and evolving nature of silver labour in India, especially as rural elderly women increasingly join the workforce.

Two elderly women at Thalsar village in Gujarat. Photo: Adam Cohn/Flickr (CC BY-NC-ND 2.0).

Choice

The increasing participation of older individuals in the labour force has a significant impact on the economy, indicating a positive trend towards realizing the silver dividend. However, it is essential to recognize that many older adults, especially those in rural and informal sectors, are compelled to continue working out of necessity rather than choice.

According to the Periodic Labour Force Survey (PLFS) 2023-24, 81% of rural elderly workers are engaged in agriculture and allied activities, compared to only 23% of urban elderly workers.

This disparity highlights that rural elderly individuals often take on precarious and low-paying jobs in agriculture, construction, or informal service sectors, driven by the need to supplement inadequate pensions or social security benefits.

For many, the absence of comprehensive financial support and rising healthcare costs make continued work an economic imperative.

Furthermore, the participation of rural elderly workers in the manufacturing and industrial sectors – which offer better growth – has remained unchanged, their involvement in the services sector has declined in 2023-24.

Breaking down their day-to-day activities further for the elderly individuals who are unemployed, the Survey reveals that they spend the maximum time on producing goods for personal use, followed by their domestic work, care, and other remaining tasks – in a day.

Notably, they spend no time on learning activities, highlighting a concerning gap in opportunities for skill development.

For those who are employed, the scenario shifts dramatically; they spend the maximum time on work-related activities. And, thus, their work appears to be more productive than their counterparts who are unemployed.

These facts underscore the urgent need to engage the elderly in both learning and employment activities, ensuring they have opportunities to develop new skills and contribute meaningfully to the economy.

An economic opportunity

India’s aging population represents both a challenge and an opportunity. By adopting comprehensive, forward-looking policies, India can transform its growing elderly population from a perceived economic burden into an asset.

Unlike the traditional demographic dividend, which focuses on the benefits of a youthful, working-age population, the silver dividend recognizes the value of older individuals’ skills, experience, and knowledge.

The retirees from the formal sector, with their experience and expertise, present a significant untapped resource. For instance, retired army officers can be engaged in roles related to security and strategic planning. To harness this potential, there is a pressing need for policymakers to develop strategies that identify and integrate retirees into appropriate sectors, ensuring their skills and knowledge are effectively utilised.

Globally, countries like Japan and those in the western world, which have substantial aging populations, are already leveraging their silver workforce. Japan has implemented Senior Human Resource Centres (SHRCs) to offer part-time and flexible work opportunities for retirees, particularly in community services, clerical work, and maintenance, alongside reemployment policies for older individuals. The United States has developed Encore Career Programs, focusing on mentorship and advisory roles for retirees. In Sweden and Germany, flexible retirement ages allow for extended working lives.

For India to reap similar benefits, it must adopt a holistic and proactive policy approach to ensure that older adults can contribute meaningfully to the economy.

Expanding social protection programs and schemes (such as Atal Pension Yojana (APY) and National Pension System (NPS), Pradhan Mantri Shram Yogi Maan-Dhan (PM-SYM), MGNREGA, Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), Garib Kalyan Rojgar Abhiyaan (GKRA), promoting age-friendly workplaces, reskilling older workers, improving healthcare, and encouraging entrepreneurship are essential steps toward turning India’s aging workforce into a driver of economic growth.

Balhasan Ali is Researcher at Institute of Economic Growth, New Delhi.. Rachna Singh is a PhD Scholar from Banaras Hindu University, Varanasi. Gudakesh is an assistant professor at Institute of Economic Growth, New Delhi. The views and opinions expressed in this article are those of the authors.

For South Asian Migrant Workers in Lebanon, Cricket Erases Border Politics and War

Indians and Pakistanis play shoulder to shoulder for Brothers XI. ‘When you’re far from home, you realize how much you need others around,’ says a player.

Beirut: War is not a good enough reason for the migrant workers – mostly South Asians – to give up on their weekly game of cricket. A parking lot behind a century old church in the heart of Beirut is where they gather each week to play, connect, and forge a sense of community.

On a bright, sunny Sunday morning at Asas Stadium in Beirut, Lebanon, Brothers XI is locked in a fierce cricket match against a team of Syrian refugees. Vice-captain Satnam Singh ‘Raju’ from Punjab’s Mansa, wearing a green jersey with Imran Khan’s face on it, yells in frustration as a teammate misses a catch. It’s a tough match, but the collective firepower of the Indian and Pakistani migrant workers on the team gets them the win.

Raju is one of the 11 men who make up the team Brothers XI, each from different parts of India and Pakistan – a rare bond, as players from both countries rarely find themselves on the same side. The idea to form this team came from their captain, Majid Satti, from Islamabad.

For Satti, these Sunday games are like Eid. “The moment we go home on Sunday night, we’re already thinking about next Sunday. We don’t have anyone else here. This is the only family we have.”

‘What is now a thriving community of nine men’s cricket teams and 11 women’s teams, was once an underground sport.’ Photo: Kanika Gupta.

Raju, who works six days a week as an electrician, putting in nine hours a day for a salary of $600-700 a month, says his work is too exhausting and their cricket activity on Sunday helps them destress and find some fun in their otherwise mundane lives.

What is now a thriving community of nine men’s cricket teams and 11 women’s teams, was once an underground sport when Sri Lanka’s Sugath Fernando first arrived in Lebanon in the mid-1990s.

A migrant worker himself, Fernando has worked in the country for almost three decades and calls himself lucky to have an employer who treats him and pays him well. This is a statement that puts a spotlight on the exploitative kafala system – a sponsorship-based labour system used in many Gulf countries, including Lebanon, that ties migrant workers to their employers.

Under this system, workers’ legal status and residency are dependent on their sponsors, also known as kafeels, who control their work permits and can restrict their freedom, often leading to exploitation, abuse, and lack of legal protections.

“We do not have supportive laws in Lebanon,” says Fernando, referring to the system which leaves migrant workers with few options.

‘You leave your family behind and only get to see them once every couple of years, for a month or two.’ Photo: Kanika Gupta.

“As a migrant, it’s hard. You leave your family behind and only get to see them once every couple of years, for a month or two. You miss everything, the good and the bad. Some of them work in such tough conditions, like being told not to talk to others from their own community or working very long hours. Cricket is their only escape where they meet every week and have some fun time together.”

Twenty-eight-year-old Inder Singh from Jalandhar, Punjab, has been working in Beirut for the past eight years, often putting in 10 to 12-hour days, sometimes even longer. Despite having only one day off on Sundays, he prefers being on the field with his team rather than staying at home.

“We’re all brothers here,” he says about his team. When asked about the politics between India and Pakistan, he says, “We keep politics off the field.”

“It’s a different thing outside India. Before coming to Lebanon, I had the same mindset as everyone back home. But meeting so many people here, speaking the same language, everything feels friendlier. When you’re far from home, you realise how much you need others around. What’s the point of treating anyone badly? We look out for each other. If someone’s stuck, we don’t hesitate – we call, and they come without a second thought. They don’t even think, ‘This is an Indian calling me.’”

Raju agrees that they don’t have time to get caught up in the politics between their countries. Here in Lebanon, they’re simply Brothers XI – a team that comes together every Sunday to unwind and do what they love.

‘We eat together, play together, and even hang out on Saturday nights.’. Photo: Kanika Gupta.

Fernando also exclaims that the Pakistan and India team together is the biggest story in the cricket fields of Lebanon.

“Politically, everyone knows what’s been happening in India and Pakistan. The British are aware of the rivalry within cricket between the two countries. For Americans, cricket is foreign, but when they see this team, especially Brothers XI playing together, they recognise them as a strong team in Lebanon’s cricket scene. Most of the time, they win.”

Satti, the team’s captain relishes these games and says he doesn’t care about politics either.

“We eat together, play together, and even hang out on Saturday nights. We came together through cricket and life, but it’s the game that really brought us close. Now, we’re not just teammates; we’re really good friends.”

But other than the game, Fernando takes pride in the network and the community this game has built for all the migrant workers in Lebanon.

‘With such a large community, and the biggest in Lebanon, we’ve built strong connections with churches.’ Photo: Kanika Gupta.

“It’s a diverse community here, not just Sri Lankans, but also Bangladeshis, Pakistanis, and Indians. With such a large community, and the biggest in Lebanon, we’ve built strong connections with churches. They’ve always supported migrant workers and work closely with NGOs. Thanks to these connections, we can easily guide people to the right places. Whenever someone needs shelter, food, healthcare, or anything else, we communicate and lend a hand. Even during the war, we helped our Sri Lankan and Indian brothers and sisters with shelter and support. Now, it’s become a network – cricket is just one part, but it’s about being there for each other in tough times.”

Despite Lebanon’s ongoing economic crisis and the recent war between Israel and Hezbollah, which peaked in October 2024 before a ceasefire in November, cricket never stopped.

“We could see the warplanes and hear the bombs in the distance, but we kept playing,” says Inder.

Now that the ceasefire has held, Fernando remains hopeful.

“It was supposed to rain today,” he tells me over the phone from Beirut. “But it’s bright and sunny. Beirut’s looking hopeful, with a new president in place and perfect weather for cricket. We’re happy.”

Why are Gujarati Migrants Fleeing the Model State?

The explanation is rather simple: the state has not been creating good jobs for years.

It has been in the news lately that Gujarati migrants make up a huge portion of those who have been deported by the Trump administration to India.

In fact, it is understood that Gujaratis are overrepresented among illegal Indian migrants in the US at large. In 2023, out of 67,391 Indian illegal migrants in the US, Gujaratis were 41,330.

The risks these migrants took were not small. In 2022, one Jagdish Patel, his wife and their two sons from the Dingucha village froze to death during a blizzard while attempting to cross the US-Canada border.

Illustration: Pariplab Chakraborty.

Gujaratis have been travelling to Africa and then, the West, for centuries, but not as illegal migrants. In the meantime, Gujarat has become a rich state – we are told that it is “a model” even. Then why are people leaving this way, and in such large numbers, the very Indian state which has one of the highest growth rates and the highest per capita net state domestic products – Rs 181,963 rupees in 2022-23, which was more than double the national average of Rs 99,404?

The explanation is rather simple: there are very rich people in Gujarat, but many more very poor people, because the state has not been creating good jobs for years.

The persistence of mass poverty

Not only did the growth rate of jobs not increase in proportion to the growth rate of the state GDP, but the quality of jobs did not improve either, as is evident from the informalisation process at work in the job market.

In 2022, according to the Periodic Labor Force Survey, 74% of the Gujarati workers had no written contract, against 41% in Karnataka, 53% in Tamil Nadu and Kerala, 57% in Madhya Pradesh, 64% in Haryana, 65% in Maharashtra and 68% in Bihar.

More importantly, this ‘casualisation of the workforce’ resulted in low wages. In April-June 2024, the average wage earnings per day from casual labour work for Gujarat was Rs 375, less than the national average, Rs. 433 and much less than in Kerala (Rs. 836), Tamil Nadu (Rs. 584), Haryana (Rs. 486), Punjab (Rs. 449), Karnataka (Rs. 447), Rajasthan (Rs. 442), Uttar Pradesh (Rs. 432) and even Bihar (Rs. 426). The only state where wages for the casual labour force lagged behind Gujarat was Chhattisgarh (Rs. 295).

Even average monthly earnings from regular salaried employment were much lower in Gujarat than elsewhere. In April-June 2024 it was Rs. 17,503, against Rs 21,103 as an average in India. Among the big states, only Punjab (Rs 16,161) lagged behind Gujarat. Karnataka (at Rs. 25,621), Haryana (at Rs. 25,015), Maharashtra (at Rs. 23,723), Kerala (at Rs. 22,287), Andhra Pradesh (at Rs. 21,459), Tamil Nadu (at Rs. 21,266), Uttar Pradesh (at Rs. 19,203), Rajasthan (at Rs. 19,105), Madhya Pradesh (at Rs. 18,918) and West Bengal (at Rs. 17,559) were all doing better.

Of course, those who migrated to the US are unlikely to have been salaried people. They most probably came from the villages of Gujarat where the condition of poor peasants is particularly bad.

In 2023, the average daily wage for agricultural workers, at Rs 242, was the lowest in India, and far behind that in Bihar, one of India’s poorest states. The daily wage for rural people not working in the fields (but as artisans, for example), at Rs 273, placed this state second-last, just ahead of Madhya Pradesh (Rs. 246) – and still far behind that of Bihar (Rs. 313). The daily wage for construction workers, at Rs 323, ranked Gujarat third to last, before Madhya Pradesh (Rs. 278) and Tripura (Rs. 286).

Wages are not the only indicators one must pay attention to for measuring poverty. The Monthly Per Capita Expenditures (MPCE) of the state’s rural and urban dwellers are very revealing too. According to the National Sample Survey Office, in 2022-23, Gujarat’s MPCE was at Rs. 6,621 in urban areas and Rs 3,798 in rural areas, far from what it was in Tamil Nadu (Rs 7,630 and Rs 5,310), Kerala (Rs. 7,078 and 5,924), Karnataka (Rs 7,666 and Rs. 4,397), Andhra Pradesh (Rs. 6,782 and Rs. 4,870) and even Haryana (Rs 7,911 and 4,859) as well as Maharashtra (Rs. 6,657 and Rs 4,010).

The Multidimensional Poverty Index (MPI), developed by the UN to measure poverty by taking into account not only standard of living, but also access to education and healthcare, is very useful here, as it goes beyond economic criteria. Gujarat, from this point of view, is in the middle of the table, with 11.66% poor in 2020-21, barely less than West Bengal (11.89 %), but more than Maharashtra, Karnataka, Haryana, Andhra Pradesh, Telangana, Himachal Pradesh, Punjab, Tamil Nadu, Jammu and Kashmir and Kerala (to mention only large states). Gujarat is particularly penalised by its poor score in terms of access to food: 38% of the state’s inhabitants reportedly do not have access to the food they need (compared with 42% in Bihar and 40% in Jharkhand – the other two states occupying the lowest ranks here).

How can we explain the absence of good jobs in the Indian state with the largest per capita net state capital product – and the correlative persistence of mass poverty that forces so many people to migrate to the West?

Few good jobs: a capital intensive, oligarchic political economy

The explanation of this paradoxical situation lies in the trajectory Gujarat started to follow under Narendra Modi. Between 2001 and 2014, the government gave priority to infrastructure projects (including ports, thermal plants and refineries) and petrochemicals industry at the expense, not only of social expenditures – including health and education – but also more labour-intensive activities.

This strategy contrasted with the kind of political economy Gujarat was known for till then. Indeed, the state has traditionally been a land of entrepreneurs where the state has assisted small and medium enterprises (SMEs) and where some positive discrimination was implemented for smaller-scale entrepreneurs. In the 1990s, the industrial policy of the state government of Gujarat still focused on SMEs which are four times more labour-intensive than big enterprises on average.

The 2003 industrial policy introduced by Narendra Modi broke away from this tradition, and the 2009 one even more. Small was not beautiful any more. The Gujarat Special Investment Region Act was passed in order ‘to come up with a legal framework to enable development of mega investment regions and industrial areas in the State’. Its ultimate aim was to create ‘global hubs of economic activity supported by world class infrastructure’. The Act was the mainstay of the 2009 Industrial Policy, which was explicitly designed for ‘making Gujarat the most attractive investment destination not only in India but also in the world’. It targeted not only ‘prestigious units’ (above Rs 3 billion, or $37.5 million), but ‘mega projects’, which denoted more than Rs 10 billion ($125 million) of project investment and direct employment of only 2,000 people – creating a ratio of Rs. 500,000 ($6,250) per job, a clear sign of capital intensity. To attract big companies, access to land was considered a key element in 2009. The Gujarat Industrial Development Corporation (GIDC) therefore started to acquire land to sell to industrialists, in some cases on a 99-year lease, or in Special Economic Zones.

The new industrial policy not only impacted the peasantry because of its provisions regarding land, it also affected the workforce. While, till the 1990s, it was mandatory for businesses benefiting from state subsidies or incentives in the context of some new investment to employ 100 permanent workers, ‘the condition of employing 100 permanent workers turned into 100 regular workers and then just 100 workers’ in the 2000s.

The new industrial policy of Gujarat benefited a handful of regional or national oligarchs whose firms were all highly capitalistic and not at all labour intensive. As a result, between 2009-10 and 2012-13, Gujarat was the state where investment in industry was the highest in India (above Maharashtra and Tamil Nadu). But this performance did not translate into job creation as much as in the states where enterprises tended to be smaller and (therefore) more labour-intensive. A comparison between Gujarat and Tamil Nadu is illuminating in this respect: in 2013, the Gujarat industrial sector represented 17.7% of India’s fixed capital and only 9.8% of factory jobs, whereas the industry of Tamil Nadu represented 9.8% of fixed capital but 16% of factory jobs.

It is not just that the big companies invested in activities which were not labour intensive, but they also contributed to the decline of the Gujarati SMEs which took part in their supply chain (big companies usually did not pay them on time) and which had to buy key components of their activities from them. Energy oligopolies, like the Adani Group, sold them electricity at a very high price, for instance. Between 2004 and 2014, 60,000 MSMEs shut down in Gujarat.

Incidentally, the Adani group, whose head, Gautam Adani epitomises today’s crony capitalism, with a total headcount of just 36,000, employs the fewest number of workers among the top six groups in India, which have at least 150,000 employees each.

Christophe Jaffrelot is research director at CERI-Sciences Po/CNRS, Professor of Politics and Sociology at King’s College London and Non-Resident Fellow at the Carnegie Endowment for International Peace. His publications include Modi’s India: Hindu Nationalism and the Rise of Ethnic Democracy, Princeton University Press, 2021, and Gujarat under Modi: Laboratory of Today’s India, Hurst, 2024, both of which are published in India by Westland.

Govt’s Push Towards Skilling: Big Funding, Poor Outcomes

While increased funding is a positive step, India risks producing more ‘certified individuals’ without real competencies and skills.

India’s skilling and apprenticeship budget has increased in the past few years, driven by the government’s strategic initiatives to address the skill gap. The labour and skill development ministry has received a significant boost in this year’s Budget, with an allocation of Rs 38,746.3 crore – an 80% increase from Rs 21,608 crore in the previous year. Union finance minister Nirmala Sitharaman outlined plans to spend Rs 2 lakh crore over the next five years, reinforcing the government’s commitment to skill development and internship programs.

Even after so many interventions and schemes like Pradhan Mantri Kaushal Vikas Yojana (PMKVY) (2015 to present), Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDUGKY) (2014 to present), and the National Apprenticeship Promotion Scheme (NAPS) (2016 to present), placement data and efficiency of these schemes are not available for monitoring and evaluation. A deeper dive into the implementation of these policies raises concerns.

Despite the increased allocation of funds, the focus seems to be on expanding the quantity of trained individuals rather than improving the quality of training. The government is prioritising capital expenditure and quick certifications over substantive skill development, leading to an influx of individuals who may hold certificates but lack real-world proficiency.

Major increase in New ITI upgradation scheme but investment only in CAPEX

The government’s ambitious ITI upgradation scheme, announced in the Union Budget 2024-25, with a proposed investment of ₹60,000 crore over five years, aims to revamp 1,000 Industrial Training Institutes (ITIs) under a hub-and-spoke model where Union and state governments contribute equally.

The budget for the new ITI upgradation scheme has increased from Rs 1,000 crore to 3,000 crore in 2025-26. However, the scheme’s formulation and implementation appear haphazard. Despite significant capital expenditure, there is little emphasis on updating curricula, enhancing teacher training or improving the overall skill development system.

A mid-term evaluation of a similar initiative, the model ITI scheme, revealed that a substantial portion of funds was allocated to civil works (57.9%) and equipment purchases (31.3%), with minimal focus on curriculum development or instructor training. The resultant campuses were revamped, but the quality of the training did not improve.

This pattern suggests that the current upgradation efforts may also prioritise infrastructure enhancements over substantive educational reforms, potentially limiting the effectiveness of the initiative to address the evolving demands of industry.

Vocational training trends

The latest data on workers who have formal vocational training presents a concerning trend. While formal vocational training saw a modest rise to 4.1% of the total workforce in 2023-24, informal training avenues, particularly hereditary skills rose from 1.45% in 2017 to 11.6% of the entire workforce in 2023. On-the-job training rose from 2.04% in 2017 to 9.3% in the same year.

A critical factor that accounts for such large and sudden increases, in such a short time, is the widespread implementation of recognition of prior learning (RPL), which certifies workers’ existing skills through short-duration courses, often lasting just a few hours to a week. This sudden rise in formally and informally trained individuals raises questions about the credibility and effectiveness of such training programs – going well beyond the questions that employers themselves have been raising about the employability of trainees and engineering graduates.

Additionally, there has been a sharp decline in the duration of skill development courses. In 2017-18, 29% of vocational trainees undertook courses lasting over two years, but by 2023-24, this number had plummeted to just 14.29%. Meanwhile, short-term training courses (under six months) have increased from 22% to 44%. This shift suggests a systemic preference for quick-fix certifications rather than comprehensive training that equips individuals with industry-relevant skills.

These numbers, please note, must be read with the fact that Annual Survey of Education Reports (ASER), year after year, have reminded us that at least half of India’s school children in grade 5 cannot read grade 2 texts in their mother tongue, nor carry out simple grade-appropriate math operations. In other words, India has adopted a model of quarter skilling our half-educated children coming out of our school systems.

The PMKVY paradox

The Pradhan Mantri Kaushal Vikas Yojana (PMKVY), the flagship scheme under the Skill India Mission, continues to receive substantial funding, with PMKVY 4.0 launched in 2024 backed by Rs 12,000 crore. However, its implementation has been plagued by persistent challenges. The program is over-reliant on short-term training courses offered by private, National Skill Development Corporation (NSDC)-funded training providers, many of which last as little as 24 hours to three days.

Placement statistics under PMKVY tell their own story. While official reports claim a 54% placement rate, independent data analysis suggests that only 22.16% of trained individuals secured jobs. This downward trend is evident in successive iterations of the scheme – PMKVY 1.0 (2015) had a placement rate of 18.4%, which rose slightly to 23.4% under PMKVY 2.0 but plummeted to 10.1% under PMKVY 3.0. These figures suggest a disconnect between skill training initiatives and actual industry requirements. These figures were earlier available till July 2024 on PMKVY website but are no longer available on the dashboard.

The real cost of short-term training

The government has attempted to address skill gaps through amendments to the Apprenticeship Act of 1961, leading to a gradual rise in apprenticeship numbers with year-on-year growth of 30%. However, the impact remains minimal, with only about 780,000 apprentices in India’s 570-million-strong workforce as of 2024-25. While this represents a great increase from 250,000 apprentices a decade ago, it remains an insignificant proportion relative to India’s labour force.

In Budget 2024-25, there was an announcement that the government was financing 500 top companies to take on 1 crore interns over the next five years. Like so many budget schemes of yesteryears that get announced, there is not even so much a mention of it in the current budget. Only a pilot project has been initiated to place 1.25 lakh interns, and its selection process is still ongoing, one year after the announcement.

A large influx of individuals into the workforce now hold certificates that label them as skilled, yet many lack the actual competence to perform tasks effectively. This underscores the urgent need for stringent quality assessments in skill development programs. It is possible to estimate from the government’s National Sample Survey data ( annual Periodic Labour Force Survey) the unemployment by level of education or vocational/technical training. The unemployment rate among formally trained individuals remains alarmingly high at 17%, compared to just 4% for informally trained workers. This suggests that the industry is either sceptical of the effectiveness of government-run skilling programs or finds informally trained workers easier to employ at low salaries and avoid paying skill premiums.

Ensuring impact

This brief analysis of Skill India, announced with much fanfare, must be read with the manufacturing story and the overall employment crisis. It is notable that like ‘Skill India’, ‘Make in India’, also announced in 2015, has only seen the share of manufacturing contribution to Gross Value Added in India dropping from a 25-year average of 17% till 2015, to 13% after that, only to rise now to about 15.7% in 2023-24.

In 2017-18, India had reached the highest unemployment rate in the history of labour surveys in India. The economy slowed over 9 quarters from 2017 to early 2020, and then Covid sent unemployment shooting up, as the economy contracted (by twice as much as the global economy in FY2021). Hence, 80 million workers went back to agriculture, reversing the exit from agriculture between 2004-2019. Thus, the LFPR rose, as did WPR, and UR fell, but only because women also joined agriculture, as unpaid family labour (40 million additional UFL). That is what the KLEMS researchers and the prime minister have called ‘8 crore new jobs in 4 years (2020-24)’. The Economic Survey admits real wages have not risen for 80% of workers in the last five years, but still claims jobs have grown – a rather contradictory conclusion.

The Union Budget 2025-26’s substantial increase in funding for skill development is a promising step, but ensuring real impact requires moving beyond the mere expansion of training programs. The focus must shift from quantity to quality, ensuring that India’s workforce is truly equipped for the evolving demands of the economy.

India’s skill development strategy must move beyond infrastructure upgrades to focus on curriculum modernisation, instructor training, adoption of dual vocational principles and industry-aligned pedagogy to enhance employability. Effective monitoring of placement data, workplace skill application and employer feedback is essential to assess program impact. Expanding apprenticeships through regulatory reforms and industry incentives can bridge the gap between training and real job opportunities.

Short-term certifications should be balanced with longer, competency-driven courses that equip workers with practical skills. Aligning skilling initiatives with high-growth sectors under PLI and employment-linked incentive schemes will ensure meaningful employment. While increased funding is a positive step, India risks producing more certified individuals without real competencies. A quality-focused approach is critical to making skill development a true economic and social mobility driver.

However, such actions will still not suffice if we continue to permit India’s educational system to produce semi-educated people who are not employable. Nor will the hopes of India’s youth, the majority of whom are now getting certified, be realised in absence of much faster job creation in the non-farm sectors, as opposed to agriculture.

India’s policymakers seem unaware that the country’s demographic dividend, now in its fifth decade, will expire by 2040. With barely 15 years left to harness this potential, India risks becoming an ageing society while also facing the challenges of mass unemployment and an unprepared workforce.

Santosh Mehrotra was Prof of Economics, JNU, and Dr Harshil Sharma holds a Ph.D. in Labour Economics from JNU.

Stagnant MGNREGS Allocation Part of Govt’s ‘Sabotage’ of Scheme: NREGA Sangharsh Morcha

It also said that when inflation is accounted for, Saturday’s allocation is effectively lower by ~Rs 4,000 crore compared to the FY2025 budget.

New Delhi: At Rs 86,000 crore, the Union government’s unchanged budgetary allocation to the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is inadequate and part of its “systematic sabotage” of the scheme, an umbrella body of workers and activists has said.

In a statement issued on Sunday (February 2), the NREGA Sangharsh Morcha said that when inflation is accounted for, the scheme’s allocation in the 2025-26 budget is effectively lower by around Rs 4,000 crore compared to the 2024-25 budget.

While the allocation to the scheme in 2024-25 amounted to 0.26% of the GDP, the allocation in the budget presented on Saturday was equal to 0.24% of the GDP, its statement also said.

Under the MGNREG Act, rural households are guaranteed 100 days of employment a year at specially notified wages.

According to data current as of February 1, households under the scheme availed an average of a little less than 45 days of work this fiscal year, the Morcha said, adding that the figure for 2023-24 was around 52 days. This fiscal year will end on March 31.

The deficit for the scheme stands at Rs 9,860 crore and pending wages at Rs 6,949 crore as of February 1, it said, also writing that “an average of 20% of the [scheme’s] budget is used to clear past dues”.

“This inadequate budget will inevitably result in” delays in wage disbursement, worsening financial distress for rural workers; suppress demand for work under the scheme, in turn “denying people their right to employment”; and weaken rural infrastructure, the Morcha charged.

It also said the government’s “strategy of low initial allocation is a deliberate attempt to suppress MGNREGA work demand” and that when combined with the scheme’s “low wage rates”, participation is discouraged.

“This is not neglect; it is systematic sabotage of a critical lifeline for millions,” said the Morcha.

The parliamentary standing committee on rural development and panchayati raj in December said that inflation and the cost of living in both urban and rural areas had “risen manifold and is evident to all”.

“Even at this moment, going by the notified wage rates of MGNREGA, per day wage rate of around Rs 200 in many states defies any logic when the same state has much higher labour rates,” it added.

Wages for the MGNREGS are revised every year based on changes in the agricultural labour dimension of the consumer price index (CPI-AL).

Last February, the parliamentary standing committee on rural development and panchayati raj said that the practice of revising wages with 2010-11 CPI-AL values as the benchmark was “not coherent with the present inflation and cost of living”.

Citing the finds of an expert committee which recommended in 2019 that the need-based minimum wage in India be fixed at Rs 375 a day, the standing committee recommended that MGNREGA wages be ‘revised accordingly’.

As of the last revision in MGNREGA wage rates in March 2024, no administrative unit in India pays more than Rs 374 per day.

For Farmers, Women, the Poor and the Youth, Budget 2025-26 Offers Only Symbolic Changes

The government continues its big-ticket capital expenditure spree, pouring money into infrastructure while social spending remains a fraction of its overall expenditure.

A lot was being expected from the Union government and the finance minister in their first full year budget in the third term.

This was broadly because there was hope that a roadmap would be proposed for structural change and boosting growth, through consumption and private investment – which has been all weakening over the last eight years, particularly since the demonetisation days of 2016.

The offered fiscal vision in this budget fails in addressing that.

With public debt at nearly 80% of GDP and interest payments eating up a quarter of government revenue, the government stuck to a fiscally cautious script. This is a fiscally tight budget, with an aiming of hitting a fiscal deficit target of below 4.5% by 2026-27. No surprises there – since the finance minister has stuck to the old tune of keeping to fiscal consolidation targets. This time though, it comes at the cost of boosting growth.

In remaining fiscally conservative, the budget missed the opportunity to make bold bets for the short term while delving too much either into the past or the future. Agriculture sector simply got a headline push, with the Prime Minister Dhan-Dhaanya Krishi Yojana targeting 100 underperforming districts.

Taxpayers saw some relief, with those earning up to Rs 12 lakh now exempt from income tax under the new tax regime. Note that the Rs 12-lakh limit is not an exempt limit but simply a rebate, requiring all to file income tax regardless of how much they earn. A person earning even one rupee over the Rs 12 lakh rebate would be required to pay the complete tax levied on other lower slabs as well. There isn’t much for the higher upper-middle income group, who, combining all surcharge, would still have an effective tax rate of roughly 39% on earning more than Rs 30 lakhs per annum.

Moreover, any multiplier effect of a marginally higher disposable income for less than 30-31 million of the overall workforce is a drop in the bucket. Its macro-growth impact may hardly be realised in any noticeable margins and despite much brouhaha in the mainstream media, the “middle class tax break” further depends on where any disposable income is saved.

As per the Economic Survey, if 77% of those receiving direct transfers are spending 44% of that on food and more than 31% on loan repayments and essential services, the actual growth dividend of this “saving” from changed tax slabs (with effective rates almost the same) will be very limited, combined with a higher inflationary tax and GST-imposed burden which has been gripping the liquidity landscape for middle-income groups.

On trade policy and combating excessive government regulation on trade, the government offered a rationalisation of the custom duties and import restrictions, with tariff cuts announced on products like synthetic flavours, solar panels, and certain vehicles. These hint at external pressures. These steps are very well being viewed as a move to appease global partners before the prime minister’s upcoming state visits, especially to the US.

We also need to closely assess whether the Union government has genuinely addressed the needs of marginalised communities, particularly the poor, youth, farmers, and women, who were central to the ruling Bharatiya Janata Party’s electoral messaging.

The short answer to this is: to a very limited, marginal extent.

Overall, nothing substantive comes out of the budget for these respective communities who have been reduced to electorally critical groups for a government which is known for using the Budget as a medium to appeal to voters for upcoming state and union elections. This budget’s overt focus on Bihar remains a case in point.

In appearing to sound comprehensive, the 2025-26 budget speech also outlined 10 key areas to drive these objectives, including enhancing agriculture, MSMEs, employment, and innovation. The budget claims to empower the poor, youth, farmers, and women while promoting balanced regional growth. But it does not deliver on this.

This government celebrates a dip in urban unemployment to 6.4%, but – let’s be honest – this is barely movement from 6.6% in the last quarter. More troubling is the kind of jobs being created, as economists like Arvind Subramanian have recently pointed out.

Most of the new employment is in low-wage and informal sectors which offers little security or upward mobility. The economy needs 78.5 lakh new non-farm jobs every year to keep up with the workforce, yet there’s no clear roadmap to get there.

MSMEs which are undisputed backbone of employment with over 23.24 crore workers should be thriving. Instead, they are drowning in delayed payments and credit shortages. Despite all the talk of supporting small businesses, fundamental issues remain unsolved.

The government’s focus on gig work and entrepreneurship as employment solutions by giving them health insurance and ID cards, though important, feels more like a way to dodge real labour market reform than a serious job creation strategy.

Source: Union Budget 2025-2026.

Empowering the poor: Credit and livelihoods

A key highlight of the budget is the expanded credit access in form of guarantees for the micro and small enterprises (MSMEs). The government has increased the credit guarantee cover from Rs 5 crore to Rs 10 crore, unlocking an additional Rs 1.5 lakh crore in credit over the next five years. This move is expected to empower small businesses, promoting entrepreneurship and job creation at the grassroots level.

Another development is the introduction of customised credit cards with a Rs 5-lakh limit for micro-enterprises registered on the Udyam portal, which, only if effectively implemented, could significantly enhance financial inclusion for small entrepreneurs who often face challenges in accessing formal credit.

Additionally, the extension of the PM Garib Kalyan Anna Yojana may help ensure the continued provision of free food grains to over 80 crore people for another five years. The budget seeks to also allocate financial assistance for education, offering loans up to Rs 10 lakh with interest subvention for students from low-income families. The actual disbursement process of funds for these and the implementation timeline of this remains a big question, as seen for other rural and low-income welfare schemes too.

On agriculture: Do farmers benefit?

The budget falls short of addressing the need for higher Minimum Support Prices (MSP) and additional procurement mechanisms, which are crucial for ensuring farmers’ income security.

The government’s broader strategy focuses on enhancing agricultural productivity through advanced farming techniques, fostering sustainable practices, and expanding irrigation infrastructure to reduce crop wastage and increase output.

It introduced the Pradhan Mantri Dhan Dhanya Krishi Yojana, aimed at boosting productivity, promoting crop diversification, and enhancing post-harvest storage at the panchayat and block levels. The programme shall target 100 districts with low agricultural productivity, aiming to improve infrastructure and provide better access to resources in struggling regions. While these efforts reflect a long-term vision for agricultural sustainability, concerns persist regarding immediate financial relief for farmers.

Moreover, facilitating access to both long-term and short-term credit for farmers is a key component to ensure their financial well-being. The rural prosperity initiative is also introduced to further support these efforts, aiming to uplift rural communities and stimulate overall agricultural development.

Women: Access to credit versus systemic barriers

A significant announcement is the Rs 2 crore term loan scheme for five lakh first-time entrepreneurs who are women, or from the Scheduled Castes or Scheduled Tribes. This initiative aligns with efforts to bridge gender or societal disparities in financial access. According to an IFC report (2022), 90% of female entrepreneurs in India have never borrowed from formal financial institutions, highlighting the need for such targeted interventions.

Additionally, the expansion of Saksham Anganwadi and Poshan 2.0 to cover eight crore children, one crore pregnant mothers, and 20 lakh adolescent girls reflects a marginally targeted approach to improving women’s and children’s health. By ensuring sustained nutritional support, particularly for lactating mothers and adolescent girls, this initiative has the potential to drive long-term improvements in community health outcomes. This comes at a time when India performs at the worst possible level on various nutritional access pillars and indices.

While increasing access to agri-credit is a positive step, addressing systemic barriers within the announced and existing schemes, and on issues such as workplace inclusion, safety, and labour force participation remains crucial. India’s ranking in the Global Gender Gap Index suggests that economic empowerment for women requires a multifaceted approach beyond just financial support.

Social sector spending

The government talks a big game on social welfare – education, healthcare, rural development – but does the budget back it up?

On paper, social sector spending has increased, but when measured against inflation, population growth, and the actual needs of citizens, the numbers start to look less generous.

Total net receipts for the centre are estimated at Rs 28.37 lakh crore, while total expenditure stands at Rs 50.65 lakh crore, signalling continued fiscal constraints. The government may boast about keeping the fiscal deficit at 4.4% of GDP, but at what cost? When interest payments alone swallow nearly a quarter of total revenue, what’s left for genuine welfare spending?

Take education – an area where India desperately needs improvement. The budget allocations suggest a push, but in real terms, funding struggles to keep pace with rising student numbers and the infrastructure deficit in government schools.

Healthcare tells a similar story: expanding medical education and cancer care centres are welcome moves, but public health funding as a percentage of GDP remains abysmally low. Rural development programmes see a modest uptick, yet high unemployment and rural distress raise questions about whether these schemes are enough to move the needle.

Meanwhile, the government continues its big-ticket capital expenditure spree, pouring money into infrastructure while social spending remains a fraction of its overall expenditure. The balance between long-term economic growth and immediate welfare needs is crucial – but is this government tilting too far toward optics-driven mega-projects while leaving social security an afterthought?

It would appear so – reflecting a confused and politically motivated economic ideology that lacks a clear vision for securing growth and development for all.

Chart: MGNREGS Allocation Stagnates at Rs 86,000 Crore

The rural employment guarantee scheme found no mention in Nirmala Sitharaman’s budget speech, which largely focused away from the social sector.

New Delhi: For the second consecutive budget speech, Union finance minister Nirmala Sitharaman has skipped mention of the Mahatma Gandhi National Rural Employment Guarantee Scheme – the world’s largest job guarantee programme and a consistent source of income for the rural unemployed.

The Narendra Modi government has allocated Rs 86,000 crore to the scheme – the same amount as what was spent on the scheme as per the Revised Estimate of 2024-2025. Rs 86,000 crore is also the exact amount that was promised in the Union Budget of 2024-25, presented in July, 2024, after the National Democratic Government came to power.

Rs 86,000 crore is less than what was spent on the scheme – which is a right under the MGNREGA – in 2023-24, Rs 89,154 crore.

In a pre-budget video for The Wire, social activist Anuradha Talwar had said that the challenges facing the MGNREGS, from digital exclusion to budget cuts, have left workers unpaid. “MGNREGA is essential for the economy, and the government shouldn’t use it in opportunistic ways,” she had said.

The United Progressive Alliance-era scheme has often been the site of the Modi government’s drive to play down rural distress. However, it has played a major role in the post-COVID crisis of jobs. Reports have noted how demand for work under the rural jobs programme fell in 2023-24, compared to the peak of COVID, but was still 15% more than the average demand between 2014-15 and 2018-19.

The 2023-24 Lok Sabha Standing Committee’s February 2024 report on Rural Employment through the MGNREGA said that the reduction to the scheme in budgetary allocation in 2023-24 was “puzzling and needs to be looked into”.

In 2015, Modi had called MGNREGS a “living monument to the opposition’s failures.”

As Maruti Suzuki Sponsors ‘Literary Maha Kumbh’ JLF, Workers Struggle to Get Their Due

The thousands of ordinary people visiting the Jaipur Literature Festival are likely unaware of the role a company like Maruti Suzuki is playing in depriving Indian citizens of their constitutional rights.

Once, many years ago, I was both excited by the idea of literature festivals and enthusiastic participant. I did not agree with Arundhati Roy when she said that they were merely elitist affairs. I thought meeting with other writers who themselves are facing persecution, listening to poets from different cultures and an opportunity to exchange ideas felt like a breath of fresh air and many people, who are not at all from the bourgeoisie, got an opportunity to meet the writers and even interact with them.

However, the Jaipur Literature Festival is a testimony to the truth of Roy’s criticism. It is a festival which attracts many writers and poets, but the five days of the festival also serves the interest of the elite in a totally different way. Otherwise why would corporations like Vedanta and Maruti Suzuki sponsor the festival?

Jaipur festival has been rightly compared to the Maha Kumbh. One of our national dailies reported that the Jaipur Literary Festival, with “more than 300 speakers from all across the globe[,] will discuss the issues of the country and the world in this Maha Kumbh which will be a grand confluence of literature, art and music…”

Perhaps the metaphor of Maha Kumbh is a good one because in the biggest religious festival, we see spectacles and extravaganza but there is no space for conversations on the urgent issues of our times. There is no space for engaging with the challenges facing the real world; issues with which many authors may be actually engaged.

Even when some vital issue is discussed, the format of the discussion makes for little impact. In contrast, at the Kerala festival in Kozhikode, Irish author Paul Lynch, author of the Booker Prize-winning novel Prophet Song, spoke of how his book deals with how people are in denial “about just how bad things are, about the fact that it is really over”.

How bad are things?

The devastating effect on the environment by Vedanta and the working conditions of the workers in Maruti Suzuki plants are a glimpse into the bleak future which awaits the next generation of workers in both rural areas and in the heart of urban India.

The media is oozing with praise for the Jaipur Festival. Sample this: In this grandest “celebration of books and ideas worldwide, Vedanta presents Jaipur Literature Festival 2025 in association with Maruti Suzuki and powered by Vida, which opened today with a calming Ganesh vandana…”

Reading about the opening ceremony reminded me how the Maruti Suzuki management had responded to the union’s charter of demands in 2012, when the workers had given vent to their rage. The Japanese management had refused to recognise that there was any cause for grievances; instead they had criminalised the dispute and the entire union had been framed in a murder case in which 13 of the leaders were eventually given a life sentence. More than 2,000 workers were thrown out without any domestic enquiry. Within the factory, the management hired a famous Bangalore-based Vedic astrologer to sort out “vaastu issues” at the Manesar plant. As we have written previously, the astrologer, Daivajna K.N. Somayaji, was brought in to ensure that the violence of July 18, 2012, did not occur ever again.

According to this astrologer, the problem was rooted in the fact that a part of the 600-acre plant site had once served as a burial ground. Besides, he said, three temples which existed at the site had been razed to set up the plant. There was too much negative energy at the site. The astrologer was asked to purge the site of all negative energy through a series of rituals spread over two to three weeks.

If the management believed in the efficacy of Indian Vedic astrology, they should have accepted that the workers were affected by powers beyond their control and not filed criminal cases against them.

The Maruti Suzuki management has consistently violated Indian labour codes and labour laws. Over the years, they have been throwing out permanent workers and only employing workers between the ages of 18 and 26 – and that too only on a temporary basis.

Added to the anxieties and uncertainties of unemployment is the Government of India’s Skill India programme, which promised to create some 30 crore jobs. The workers being trained by Maruti Suzuki training institute are taken in for two years, but within a short time they are put on the assembly line without learning any skills. They are made to do the same work as a permanent worker, but on a salary which is barely the minimum statutory wage.

Here is an example of the certificates Maruti Suzuki gives the trainees.

The non-permanent workers who have worked in any of the Maruti Suzuki plants have recently formed a union on January 5, 2025. They have given their demand letter to the labour commissioner. For most of the 5,000 former non-permanent workers, the union is their only hope. But already they have been harassed by the police and detained on two separate days, and released at night.

While the Maruti Suzuki company is sponsoring the biggest literary Maha Kumbh, employees and former employees are realising that they have no future. The government has announced their decision to enforce the new labour codes, making fixed-term employment legal. The management has told the labour commissioner that they do not recognise the new union.

In India, we have not been too critical of the way private capital is exercising disproportionate influence over not only the Indian economy and politics, but also the cultural field. By targeting individuals like Ambani and Adani, we have made the role of other corporates invisible.

The sponsorship of the Jaiput Literature Festival by Maruti Suzuki (and Vedanta) is not an innocent act of corporate largess, but an attempt to control and sabotage the radical potential of writers, literature, poetry and culture. There is a need to not only expose the dangers of such sponsorship, but use these platforms to make the sufferings of the people visible and their struggles relevant in the field of culture.

Nandita Haksar is a human rights lawyer and an award-winning author.

Haryana: Police Detain Maruti Suzuki Protesters, Stop ‘The Wire’ Reporters From Speaking to Them

Police seized The Wire’s camera, and the mobile phones of this reporter and an intern. The two of us were detained in a police van for nearly an hour.

Manesar: Haryana police detained several workers of the Maruti Suzuki plant over a peaceful protest at Manesar on January 30, and held The Wire’s reporters for almost an hour as they were speaking to protesters near the site.

Police also seized The Wire’s interview equipment, and the mobile phones of this reporter and an intern, Rishabh Sharma. The two of us were detained in a police van for nearly an hour.

A three-month protest

For more than three months, workers have been protesting under the banner of the ‘Maruti Suzuki Asthai Mazdoor Union.’ The main demands of the protesting workers are that they be given permanent jobs, temporary workers’ wages be increased, and workers who were suspended after the violence at the Manesar plant in 2012 be reinstated.

Employees from various states, including Haryana, Uttar Pradesh, Bihar, Rajasthan, and Jharkhand, have joined the movement.

On January 10, a massive gathering of current and former temporary employees of Maruti was organised in front of the labour department in Gurugram, Haryana. The workers submitted a demand letter to the management and the labour department, signed by more than 4,000 employees represented by Maruti Suzuki Asthai Majdoor Sangh, listing their key demands.

Haryana Police at the protest site outside Manesar Tehsil. Photo: The Wire.

Workers say court allowed protest

The protesting workers claim that the Gurugram civil court had permitted their protest on January 29 and 30, under some conditions. They were allowed to protest at least 500 metres away from the Maruti Suzuki plant in Manesar, ensuring the demonstrations remained peaceful. The court also made it clear that the company’s daily operations should not be hindered, and no property damage should occur during the protests.

But on January 29, the Manesar police forcibly cleared the protest site of Maruti Suzuki workers who had been staging a sit-in demonstration since September 18, 2024.

At around 11 am, the Manesar police dismantled the tent set up by the workers near the Manesar Tehsil office. The protesting workers were detained and later dropped off nearly 30 kilometres away from the protest site. But the crackdown did not stop there. According to the workers, the police used force and vandalised the protest site, damaging their belongings worth around Rs 2 lakh.

Early on January 30, former and current Maruti Suzuki workers again started gathering near the Manesar tehsil to continue their protest. However, police refused to allow them to demonstrate, citing Section 163 of the Bhartiya Nyay Suraksha Sanhita (erstwhile Section 144 of the CrPC) and began detaining the workers who had come to participate.

Throughout the day, as workers assembled near the Manesar tehsil, Delhi-Manesar Road, and IMT Chowk, the police used force to detain them.

Some of the workers protesting at the Manesar site. Photo: The Wire.

Section 163

When The Wire reached the protest site outside the Manesar tehsil, it was filled with police personnel and no protesting workers were visible.

About 500 metres away, near IMT Chowk, a small group of workers had gathered. While I was interviewing the workers and capturing their responses, at around 12:30 pm, the Haryana police intervened, citing Section 163 of the BNSS. Police detained all the protesting workers, seized The Wire’s camera and recording instrument, and our mobile phones. Cops also held me and The Wire’s intern in a police van for nearly an hour, preventing us from speaking to more protesters.

After nearly an hour, the officer returned all equipment including the camera, our phones, and the microphone. However, before giving my phone back to me, a police officer deleted a video I had shot of the protest from the mobile phone.

The workers participating in the protest condemned the imposition of Section 163 and raised questions about it. They argued that if this section was truly applicable in the tehsil area, then numerous companies operating there should also be affected. Thousands of other workers were commuting on the roads, ordinary people were moving around, and other groups of more than five people were gathering. However, the police was citing Section 163 only to detain the protesting workers, they alleged.

By 9 pm on January 30, the police had released all the 76 detained protesters.

Amit Chakravarty, a trade union activist based in Manesar, Gurgaon, said, “This protest has been peaceful for more than three months, and the court had even approved the protest on January 29 and 30, 2025. Workers from different states had come together in large numbers at the protest site in Manesar. Unfortunately, the Haryana police ignored the court’s order. Police damaged property at the protest site, and detained several workers. They have resorted to using force in an attempt to break up the protest.”