The Hindu Editorial Analysis
24 February 2025
Indian industry needs innovation, not mindless toil
(Source – The Hindu, International Edition – Page No. – 6)
Topic: GS 2: Development processes and the development industry
Context
- Indian industry heavily relies on cheap labor for growth, which is detrimental in the long run.
Introduction
- Interviews with migrant workers in Ludhiana revealed:
- Workers endure 11-12 hour shifts, often without breaks during busy periods.
- Their non-working hours are consumed by cooking and commuting.
Call for Longer Working Hours
- Some corporate leaders advocate for longer working hours, unaware of existing harsh work conditions:
- Most Indian workers are informal, working excessively long hours.
- Employment Statistics (2023-24):
- Only 21.7% of workers have regular salaried jobs.
- Many regular workers lack contracts, paid leave, and social security.
Competing with Cheap Labor
- Industry leaders’ push for longer hours confirms reliance on cheap labor rather than innovation.
- Developed nations have shifted to efficiency and technology for productivity, unlike India.
- Historical reference: Marx highlighted exploitation during the Industrial Revolution, which saw improvements in labor conditions over time.
Work Hours and Productivity
- ILO Data (2024):
- U.S.: 38 hours/week
- Japan: 36.6 hours/week
- India: 46.7 hours/week
- India’s large labor force is kept working long hours for low wages, moving from organized to unorganized sectors.
Predominance of Small Industrial Units
- Small units dominate Indian manufacturing, with many employing fewer than six workers.
- Over 70% of the manufacturing workforce is in small, unregistered enterprises.
Losing out on Innovation
- Relationships between small and large firms are exploitative, not mutually beneficial:
- Small firms face delayed payments and unfair pricing from larger firms.
- They lack state support and struggle against cheaper imports.
Dependence on Contract Workers
- Increasing reliance on contract workers (56% of new factory workers since 2011-12):
- Contract workers face lower wages and lack labor protections.
Migrant Workers and Wage Suppression
- Migrant workers are essential to the labor supply but suffer from low wages and lack of benefits.
- Profit margins have soared post-COVID, despite declining wages.
The Garment Industry
- Over-reliance on cheap labor limits global competitiveness:
- India’s garment export share has stagnated at 3.1% for two decades, lagging behind China, Bangladesh, and Vietnam.
- Reluctance to modernize hinders growth, confining India to niche markets.
Negative Impact on Broader Industry Growth
- Cheap labor fosters complacency, neglecting technological advancements.
- Low wages reduce purchasing power, harming domestic markets and overall economic momentum.
Conclusion
- Exploiting workers through long hours and low wages is unsustainable.
- Short-term gains will lead to long-term industry stagnation unless leaders embrace innovation and improve worker conditions.