Saurabh Sharma | Apr 10, 2019 | 14 min read
Lucknow: 48-year-old Ram Baran’s phone rings with a loud ‘Ram lala hum ayengey, Mandir wahi banayenge’ ringtone. Wearing a striped sweater and a muffler wrapped around his head, he talked about how despite being a “staunch” supporter of Prime Minister Narendra Modi, he is disappointed with the Central government in providing jobs, claiming they have “failed” him.
Baran, an uneducated daily wage labourer, travels 18 km on a daily basis from Bakshi ka Talab area to Chinhat industrial area in Lucknow to find a job. Carrying a tiffin box wrapped in a piece of cloth, he changes two buses for a one-way journey that costs him Rs 22 in total.
He has been visiting the Chinhat industrial area--one of Lucknow’s largest labour hubs--for the last two years, after getting fired from Srivastava Automobiles, an e-rickshaw manufacturing unit in the city. Due to the Modi-led government’s decision to demonetise Rs 500 and Rs 1,000 notes back in November 2016, several factories like Srivastava Automobiles were forced to either fire most of their employees or shut down. “I was paid Rs 12,000 per month for the job, but post demonetisation, Sahib asked me to leave. He is a good man and did not want us to leave, but he did not have any money to pay his labourers,” said Baran, adding that the production of e-rickshaws also went down from 10 to about four per month.
He lives with his wife and two teenage children in a small pakka house paying Rs 2,000 as rent. As the only earning member of the family, Baran struggles to afford three square meals for them. “If I am not able to feed my family and provide them with better living, what is the use of this government? I always dreamed of my kids becoming engineers, but that seems impossible,” he lamented. His two children plan to start working after completing Class 12 to contribute towards the household’s income.
Baran is one of around 3,000 labourers who mourned the loss of financial stability after demonetisation at Chinhat industrial area in Lucknow--capital of India’s most populous and politically-involved state, Uttar Pradesh. While most labourers are from the capital city, others come from adjoining districts like Sitapur, Hardoi, Rae Bareli and Barabanki in search of jobs. With the Chinhat labour hub located close to the UPSIDC-II industrial area, employers and contractors from the automobile and real estate industries come to hire skilled and unskilled labour. While a skilled labourer today gets Rs 400-450 for a day’s work, an unskilled worker gets paid Rs 250-Rs 300, for an eight-hour job. Before demonetisation, a skilled labourer would get Rs 500 or more, while an unskilled labourer would earn Rs 350 or more.
It is a sight to witness: While some workers are dressed in torn garments, others wear a mix of blazers and lungis. A common occurrence is to see them smoking a bidi in one hand while holding a small lunchbox in the other. Several female labourers can also be found at the labour hub, often wearing colourful sarees with a loose shirt on top and a child casually slung over their shoulders. The conversations mainly revolve around domestic and financial issues they face.
The job crisis is troubling. Baran said he has been trained in various industrial jobs like lifting large metal sheets through crane forks. “Despite having work experience of 15 years in the automobile sector in Lucknow and Kanpur, there are no takers for me.” Today, he takes up whatever job is available, from loading and off-loading items to simple cleaning work. Sometimes, he takes up work as a construction labourer as well, says Baran.
On average, he finds around two weeks of work every month at Rs 300 per day. His monthly income has dropped to between Rs 6,000 and Rs 8,000.
Pradeep Kumar Srivastava, 47, owner of Srivastava Automobiles (Baran’s former employer) said he had to let most of his employees go as he was left with no cash to run his operations and pay them daily. “My production was hit due to the demonetisation drive,” he said in anger, further explaining that labourers require wages on a daily or monthly basis and after the noteban, he wasn’t left with any cash to pay them. Before demonetisation, Srivastava had employed seven permanent and four temporary workers; today he has just three under him who he struggles to pay Rs 7,000 a month. He outsources most of his work to reduce costs.
After facing a loss of almost 2 lakh, Srivastava, the only breadwinner in his family, said he still hasn’t managed to fully recover and most of his earnings go in paying bills for his wife and son. “Losing skilled labourers is a big loss,” he said, explaining that today, skilled workers demand more. This, in turn, increases production cost which “people like me cannot afford”. Srivastava also stated that earlier he could produce over 10 e-rickshaws a month and now finds it difficult to manufacture even seven.
Tata Motors is one of the largest industries in the state. As per Uttar Pradesh State Industrial Development Corporation, 193 industries have been registered in Lucknow, but many have now stopped operations. Small and large ancillary industries that produce fuel tanks and stainless steel parts, engage in chassis binding, manufacture battery clamps etc. are some that have shut down. These industries hire unskilled labourers for jobs like cleaning manufacturing units and offloading among others.
This is the sixth in an 11-part series (you can read the first part here, second here, third here, fourth here and fifth here), reported from nationwide labour hubs--places where unskilled and semi-skilled workers gather to seek contract jobs--to track employment in India’s informal sector. This sector, which absorbs the country’s mass of illiterate, semi-educated and qualified-but-jobless people, employs 92% of India’s workforce, according to a 2016 International Labour Organization study that used government data.
By delving into the lives and hopes of informal workers, this series provides a reported perspective to ongoing national controversies over job losses after demonetisation and GST. The number of jobs declined by a third over four years to 2018, according to a survey by the All India Manufacturers’ Organisation, which polled 34,700 of its 300,000 member-units. In 2018 alone, 11 million jobs were lost, mostly in the unorganised rural sector, according to data from the Centre for Monitoring Indian Economy (CMIE), a consultancy.
In 2017, the Narendra Modi-led BJP stormed to power in Uttar Pradesh state assembly elections, despite not projecting anyone for the Chief Minister’s post. Promising jobs to the youth, farm loan waivers, free education for the girl child and a promise to end corruption among others, the BJP defeated incumbents Akhilesh Yadav-led Samajwadi party, winning a majority of 325 seats from the total of 403. Unemployment, an issue that has plagued the state for long, was one of many fundamental promises made. The BJP had promised jobs to its voters within 90 days of coming to power.
Based on data provided by CMIE, the unemployment rate in Uttar Pradesh from January 2016-2017 was at a massive high of 13.25% on average, with the highest registered in June 2016 at 18%. From January 2017-July 2018, the unemployment rate was low, at an average of 3.9% across all 19 months. However, in August 2018, the number shot up to 8.5%, with the highest recorded in December 2018, at 11%. As of February 2019, the unemployment rate stands at 9.6%.
Neeraj Shukla, assistant professor at the department of economics at Khwaja Moinuddin Chisti University in Lucknow, opined that due to the high rate of production in Uttar Pradesh’s industries, unemployment rate between January 2017-October 2018 was low. However, the high unemployment rate between January to October 2016 was due to issues with allotment of industrial land in the state. Industrialists faced obstacles in renewing the lease of their industrial lands or in buying new plots due to high rents. Due to this, several industries moved to Uttarakhand or West Bengal which led to massive job loss, Shukla explained.
The numbers appear to be conflicting. In August 2018, Swami Prasad Maurya, state labour and unemployment minister, told the state legislative council more than 21 lakh youth have registered as unemployed in UP. The actual number is not known.
Baran, when asked about his views on the ruling BJP government, said he voted for them based on their promise to construct the Ram Temple. He was also impressed with the demonetisation drive, but did not fathom its negative impact on his life. “I do not know that long term impact of these reforms, all I know is that my family has suffered due to me being jobless and earning low wages,” he said, adding that now he will vote only for the party that guarantees jobs. This sentiment was echoed by several others at the labour hub.
Mukesh Yadav, 28, a daily wage labourer from Barabanki district, said he comes from a family loyal to the Samajwadi party. In the 2017 election, he voted for Modi-led BJP, which caused him to fall out with his father who considered his decision a “breach of trust”. Yadav said he placed faith in the BJP based on their promises of constructing the Ram Mandir and providing Rs 15 lakh to citizens. Now, however, his faith in the ruling government has faltered. “I never knew all the promises made by them were nothing more than jumlas. I will now vote for Akhilesh Yadav bring him to power. I am never going to fall for any poll promises,” he declared, complaining that his wages have fallen from Rs 12,000 to less than Rs 9,000 now due to low wages and lack of jobs.
Ashish Awasthi, a Lucknow-based independent labour rights activist, said there is a serious dearth of jobs in not just Uttar Pradesh but the entire country due to faulty governmental policies over the last five years.
“Demonetisation first broke the real state and micro, medium industries and then GST made a very negative impact. Factory owners and manufacturers had to shut down their businesses, lay off their staff and reduce operations as there was no availability of cash after demonetisation,” said Awasthi. Furthermore, he said a large number of labourers including those in construction were then left unemployed. Awasthi called the labour department a “toothless tiger”, citing their lack of effort in increasing jobs and improving work conditions for the unorganised sector. Based on his estimates, from the three to four lakh labourers who visit all the labour hubs in Lucknow, only around 40% find work today.
Commenting on the impact of demonetisation and GST, D S Verma, executive director of Indian Industries Association in Lucknow, said these reforms had a major impact across industries from real estate to automobiles. The cash crunch left industrialists struggling to pay suppliers and purchase raw materials, and more importantly, pay daily wage labourers working in their industries. “I personally know of many cases where labours did not turn up for work the next day because they knew the plant owners (factory owners) did not have enough cash to pay their workforce. Some plants (industries) were also shut for several days,” said Verma.
However, Pandit Sunil Bharala, chairman of the labour department, denied that there is a dearth of jobs in the state. “There is nothing” like an increase in unemployment, Bharala exclaimed, before refusing to comment any further.
Dearth of jobs for skilled labour
Twenty-eight-year-old Sujeet Kumar Rawat, a mason by profession, said he finds “no use” of having any skills today, as there is no guarantee of jobs in the market--“What is the use of having skills when you are underpaid?” The average daily wage of a mason was about Rs 600 before demonetisation, while an unskilled worker earned about Rs 350. Today, masons earn between Rs 350-Rs 400, he said. Since wages of both skilled and unskilled workers are at “the price of peanuts”, competition in the market is high. “It is becoming hard, very hard to survive,” Rawat emphasised.
Since 2004, Rawat has been travelling 14 km up and down to the Chinhat labour hub on a motorcycle gifted by his father-in-law. While his average monthly income earlier was Rs 9,000 today it has come down to Rs 6,000-Rs 7,000 for 15-18 days of work.
As the sole breadwinner in the family, the pressure to look after his wife, son and their home falls on his shoulder.
Despite training for several years in skills like construction of industrial furnaces under a senior mason, Rawat claimed his skills are rarely put to use. “In the last two years I think I have constructed only two furnaces, while earlier, I would construct at least one furnace a month. Now I construct houses and I am not paid according to my skills.”
The young mason, despite being a commerce graduate, said after graduating in 2012, he did not find any job. He then trained in masonry and had been doing the same till demonetisation.
Arvind Kumar Shukla, a labour contractor at Chinhat labour hub, said he has not seen “much” increase in daily wages for both unskilled and skilled labour across industries despite being in the trade since 2009. The workers under him consistently receive their wages every month after he takes a 10% cut for commission. He also receives payment from industries for a steady supply of labour.
However, the flip side of finding work through a labour contractor is that workers do not get paid any benefits. According to Shukla, industries prefer going through a contractor to hire labour as they can cut expenses like fixed/permanent wages, bonus, insurance etc. Turning the pages of his record register, Arvind Shukla said with his earlier savings he could earn enough to run his family and save up for the future. From a monthly wage of Rs 30,000-Rs 40,000, his earnings have fallen to between Rs 22,000-Rs 25,000.
The contractor further explained that the number of labourers looking for work has increased. Industries through labour contractors pay an average of Rs 220 per day--much lower than the regular rate of Rs 350--and some even agree to work at Rs 150 a day out of desperation for a job, a problem constantly exploited.
According to the Building and Other Construction Workers (BOCW) board, registered labourers are eligible for various welfare schemes like construction workers housing assistance, daughter marriage grants, skill development, Mahatma Gandhi pension, national health insurance and others. According to the BOCW board, there was a rise in worker registrations post-demonetisation. The registered number of labourers during 2016-17 was 6,85,652, which went up to 7,81,640 in 2017-18.
According to numbers provided by the Uttar Pradesh labour department, a total of 16,241 labourers have been trained under the Kaushal Vikas Mission (Skill India Mission) since 2014. In 2017-18, 7,029 workers were trained, the highest so far.
However, very few industries also provide safety equipment, health insurance and other basic incentives/benefits to workers, said Shukla. The unorganised sector workforce in Lucknow depends either on the construction, or on automobile industry. “Many a time, people who are graduates, engineers and even post-graduates come to us for jobs. Most of the labours with me at Chinhat Industrial area are high school or intermediate pass,” he said.
“There are more than 100 polytechnics in Uttar Pradesh alone and they produce thousands of skilled people every year, but hardly 50% of them get jobs. There is no social security in private jobs and this is going to be a very serious problem in the time to come,” said Awasthi.
Bharala said there is a problem with the availability of skilled labour. Industries do not pay skilled labour easily as they demand higher wages. In such situations, unskilled labourers with minimal training are used and paid less than the standard wage rate. “To deal with this problem, the department is contemplating increasing its training programmes. If there is a large number of skilled labourers, then we think this problem will end,” he said.
A report by the International Labour Organisation from 2017 said there is a “mismatch in the demand and supply of education and skills” in Uttar Pradesh that often translates into unemployment. Though there is a shortage of skilled labour, workers are often not trained in different skills primarily due to lack of education and awareness about opportunities. The report further states the high rate of unemployment amongst educated youth is a “matter of concern”.
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