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'Gujarat fails to create jobs despite high investment'

india Updated: Oct 09, 2012 19:43 IST
Mahesh Langa
Mahesh Langa
Hindustan Times
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Gujarat’s rapid industrial development in manufacturing is apparently not helping in employment generation, as growth rate of employment falls way below the high rate of investment, a study revealed.

The study on the dynamics of development in Gujarat suggested that employment is the biggest casualty of “successful manufacturing growth in the state.”

Chandigarh-based Institute of Development and Communication (IDC) has conducted the study on various sectors like industrial development and employment generation, health, education and agriculture.

Prof. Atul Sood of JNU (Jawaharlal Nehru University) has conducted the study which is being published as a book titled “Gujarat: Poverty, Amidst Prosperity.”

Around 10 researchers have studied different sectors and compiled their research papers in the book.

“The Compound Annual Growth Rate (CAGR) of employment, for the period of 1993-94 to 2004-05, using NSSO data, suggests that employment grew at 2.69% per annum, whereas for 2004-05 to 2009-10 it came down to almost zero. Employment has fallen in the manufacturing and primary sector from 2005-2010,” the study revealed.

“Manufacturing in Gujarat, has been capital intensive, is characterized by low employment generation, slow growth in wages, increasing use of contract workers, and overall reduced position of workers in the manufacturing sector. This worsening condition of workers is accompanied by increasing profitability and growing investment in these sectors.”

The figures provided in the study contradict the claims of Gujarat government, which has always contended that the state is the largest employment provider in the country.

According to the state government, successful Vibrant Gujarat Investment Summits organized by the state have resulted into bringing substantial investment in industrial sector creating more jobs in the state.

Though investment is indeed higher in the state, but it has mainly been into mega projects like refineries and petrochemicals, which are capital intensive but don’t create jobs.

“Evaluating the experience of development in Gujarat, particularly in the last decade or so, the study tells us that Gujarat is a story where goals like social equality, sustainable livelihoods, access to education and health, justice and peace have been missed by governance in high-speed lane,” said IDC director Dr Pramod Kumar.

He added that the fact that the performance of the state of Gujarat on investment, infrastructure, agriculture and manufacturing looks impressive on a first look.

However, there is nothing to boast about, if we look at the outcomes on employment, poverty, inequality, consumption, education and health.

“In fact, the poor performances of the state on those fronts, that matter the most to people, compel us to relook at the growth strategy itself,” Dr Kumar said.