Part 2 of two-part series on labour shortage in Punjab

Arjun Sharma | Sep 15, 2018 | 5 min read



By Arjun Sharma

Wages are up. Production is down. Skilled labour difficult to get. Punjab’s once successful cycle, auto parts and hosiery units, most in the micro, small and medium scale segment, seem to be in the same boat as the state’s farmers. Even as Baldish Jindal, president of the Federation of Punjab Small Scale Industries Associations, has been pushing in vain for the past eight years to convince the central government to link the industrial units of Ludhiana with government sponsored schemes in order to address the issue of labour scarcity in factories.

The labour crunch is further aggravated by the seasonal migration of labour to agriculture during the June paddy sowing season and also because of workers who own land back home returning to plant their own fields.

The garment and hosiery industry of Ludhiana that exports goods to Europe and Russia is particularly hit as skilled and semi-skilled labour is in short supply leading to a steep increase in wages. While the minimum official daily wage for skilled labour is Rs 366 and Rs 332 for semi-skilled labour, employers say the demand supply mismatch has pushed up labour costs to between Rs 13,000-15,000 per month (Rs 433-Rs 500 per day).

Industry wants locals to be trained

Bulk of the migrant workers are concentrated in Ludhiana, Jalandhar, Amritsar and Fatehgarh Sahib districts. As per an official report of the Micro, Small and Medium Enterprises (MSME) department, there are a total of 14.65 lakh industrial units in Punjab employing 24.80 lakh people. This works out to an unrealistic number of less than two employees per unit. The lack of accurate data is because of the large number of unregistered workers, who are not included in the counting by the industries department, whose officials rarely go out in the field to check the the actual number of industrial workers. When Firstpost contacted S S Randhawa, assistant labour commissioner of Ludhiana, he passed on the enquiry to Jatinder Singh Bhatti, deputy director of factories, who in turn said he had been transferred and doesn’t have any record of the number of workers in Ludhiana.

The industry is now pushing the state government to focus on skilling local people to make up for the shortage. In its draft 2017 industrial policy, the state government admitted the immediate need for highly skilled labour. “The state has already set up a State Skill Development Mission, which would be further strengthened. The state would ensure convergence of various skill training schemes to bring scale and synergy. The state is conscious of the dire need for the industry to adopt next generation manufacturing to become globally competitive. Given high dependence on low-skill labour, re-skilling or up-skilling of existing workforce will be required to make them ready for the new requirements. The state would set up cluster specific skill centres for various manufacturing sectors to ensure skilled workforce for the Industry” it stated.

Vinod Thapar, president, Knitwear and Textile Club, says that government has been asked to open new skill development centres and Industrial Training Institutes. “There is an acute shortage of skilled labour in Ludhiana because of various schemes offered by Bihar and other state governments,” said Thapar. “Skilled workers have stopped migrating to Punjab as they are getting employment under MNREGA. It is only unskilled labourers that we are getting.” Thapar, who has been witness to the growth of industry in Ludhiana, puts the number of migrant workers residing in Ludhiana at more than 10 lakh.

Manufacturing units shifting base

“Many industrial units from Punjab have shifted to Bihar owing to workforce shortage,” added Thapar. In fact, Ludhiana’s apparel manufacturers have accepted the Bihar government’s recent offer to set up at least 25 units in that state. Bicycle giant Avon Cycles and Hero Cycles Limited based in Ludhiana have already started manufacturing units in Bihar.

In its report last year, the Associated Chambers of Commerce and Industry of India had stated that Punjab’s overall economic growth rate dropped from 10.2% in 2006-07 to 4.9 per cent in 2014-15. In 2015-16, it witnessed a marginal improvement to 5.96 per cent. “The state’s contribution to India’s economy has declined from 3.3 per cent in 2004-05 to 2.9 per cent in 2015-16” the report read. Pertinently, MNREGA was implemented in 2006.

Vinod Kumar, president of the workers union at Hero Cycles Limited in Ludhiana said even as government schemes have opened up new opportunities for workers in Bihar and Uttar Pradesh, “in Ludhiana, employees have to work longer hours due to the labour shortage. The conditions in which they live are inhospitable,” said Vinod Kumar.

With migrant labour not easily available any more, industrial units have now started hiring local youths. General Manager (Internal Audit) of Sportking India Ltd, Umaish R Verma said “we have started training local men and women in our units. The shortage of migrants had made an impact on production but timely reforms helped us,” added Verma.


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