Analysis of the Indian National Congress's Job promise.-Part 2

While the issues of Infrastructure and Land are prominent, the other two issues-money and labour are equally important.

Let us analyse the issue of money:-
Over the last few years, fiscal deficit(the excess of government expenditure over revenue) has exploded-thanks to 'rights based legislation' of Smt. Sonia Gandhi and Shri. Rahul Gandhi. This leads to increased government borrowing = increased demand for credit = increased cost of credit. This has in effect crowded out other borrowers thus decreasing the scope of private investments. 100 million jobs are not going to come out of thin air are they?? Private investments are of utmost necessity if it were to happen. Private investments are going to increase rapidly if and only if government borrowing is drastically reduced.

The question one must ask now is- Can a Congress or Congress led government reduce borrowing so drastically?

The answer for such a question would be an emphatic NO.  How can they do so when they legislate so many rights?
Food Security Act( the right to food)- annual burden is more than 1,25,000 crore

National Rural Employment Guarantee Act - annual burden is more than 35,000 crore this year.
Diesel subsidies- a whooping 70,000 crore this year.

To add to this waste, the duffer is promising Right to Housing, Right to Social Security and many more rights.Where the hell is the money to implement all this? In the Gandhi family swiss bank accounts??

Any form of the proposed massive increase in jobs would involve a greater increase in private investment. That would be impossible under the current spending patterns of the Government. We have scrap all these inefficient laws in order to enable such massive job growth.

Now coming to labour:-
If a large number of jobs are to be created in India, the government should encourage Labour intensive industries like textiles and consumer durables manufacturing. What it actually does is encourage such industries to be small, incredibly small= no job creation. The principle cause for this economic travesty is

- Labour Laws

This is what Arvind Panagariya and Jagdish Bhagwati write in their much acclaimed book- India's Tryst with destiny:-

“The ministry of labour lists as many as fifty-two independent Central government Acts in the area of labour. According to Amit Mitra (the finance minister of West Bengal and a former business lobbyist), there exist another 150 state-level laws in India. This count places the total number of labour laws in India at approximately 200. Compounding the confusion created by this multitude of laws is the fact that they are not entirely consistent with one another, leading a wit to remark that you cannot implement Indian labour laws 100 per cent without violating 20 per cent of them''    

“As the firm size rises from six regular workers towards 100, at no point between these two thresholds is the saving in manufacturing costs sufficiently large to pay for the extra cost of satisfying the laws”.

Why does the government not take any measures of corrective action? The Answer- The left intelligentsia of India will scream 'oppression'. The INC does not want to alienate it's only consistent pillar of support over the past 67 years.
The corrective action the next government will have to take is a complete overhaul of India's Labour laws. Especially the Indian Factory Act of 1948..These laws are 1st grade bullshit.


My only suggestions to the readers of this post...Please dont believe pappu's crap about inclusive growth and Job creation.