The introduction in Tamil Nadu of a Bill raising the number of working hours from eight to 12 hours a day, and its withdrawal amid protests, has reopened the discussion around the strategies for industrialisation that do not undermine workers’ rights. The core ideal of the Dravidian model is the pursuit of inclusive industrialisation that addresses both economic deprivations that arise through the market and social deprivation that emerges from caste inequality. The model is about sharing prosperity through productivity. In that sense, the introduction of the Bill raising working hours was a deviation from its core ideal. Even as the Bill stands withdrawn, the Dravida Munnetra Kazhagam (DMK) government claims that the amendment would have attracted more investments to the State and created employment. This understanding is deeply flawed.
Structural change reversing?
Tamil Nadu is one of the few States to have achieved structural change and poverty reduction simultaneously in India. A key indicator of this is the lower share of agriculture in total employment in the State as against the all-India average. However, this trend is reversing now. The share of agricultural employment increased from 27% in 2018-19 to 30% in 2020-21. Even in absolute terms, it increased from 8.5 million to 10.5 million. The entry of 2 million people into agriculture is driven by distress. The share of manufacturing declined from 20% to 16.8%. The decline is sharper in absolute terms, from 6.5 million in 2011-12 to 5.8 million in 2020-21. Of course, the period discussed here precedes the present DMK government assuming power. Yet, we do not see the course correction followed since then to be promising either. For instance, a recent government release says that State investments worth ₹2,73,448 crore were secured in two years by signing 224 memorandums of understanding. While we are not sure how much of the investment was actually realised, what is interesting is the claim of the creation of 4,10,561 jobs which work out to be 0.01 per unit of promised capital (less than one job per crore of investment), much lower than earlier. As per the latest Annual Survey of Industries data (2019-20), the ratio of jobs created per unit of capital (number of worker to gross capital formation) investment was 0.58 for Tamil Nadu, 0.34 for Gujarat and 0.33 for Maharashtra. Unless we arrest this trend, we will end up in the situation of diminishing wages and vanishing jobs.
