One more culprit behind unemployment: India lost 16 lakh jobs in FY18 due to this

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Updated: September 27, 2019 11:51:40 AM

Illegal movement of goods in five sectors viz textiles, ready-made garments, cigarettes, machinery and parts and consumer electronics hampered the addition of over 16 lakh jobs in India in 2017-18.

Those working in labour-intensive sectors like readymade garments and tobacco products lost a considerable chunk of direct employment opportunities.

Illegal movement of goods in five sectors viz textiles, ready-made garments, cigarettes, machinery and parts and consumer electronics hampered the addition of over 16 lakh jobs in India in 2017-18, according to a new study. Over 5 lakh jobs addition was directly impacted because of smuggling. This included employment of those working in labour-intensive sectors like readymade garments and tobacco products and a considerable chunk lost direct employment opportunities, a study conducted by Thought Arbitrage Research Institute (TARI) said, The Indian Express reported. 

While unemployment is on a four-decade high in the country, “Total estimated livelihood opportunity lost in the economy is about 16.36 lakh because of the estimated smuggling in these five industries because of backward linkage and multiplier effects of these industries,” the report said. Titled Invisible Enemy: Impact of Smuggling on Indian Economy and Employment, the study was commissioned by FICCI CASCADE. 

Further, 11.35 lakh job opportunities were lost because of “backward linkage and multiplier effects”, i.e, industries which are ancillary or are indirectly linked via production process to these sectors also lost on about 11 lakh jobs as finished products were smuggled in India, PC Jha, FICCI advisor said, the newspaper reported.

How smuggling affects manufacturing in India?

The manufacturing activity that should have ideally happened in India, shifts abroad when suggling happens, FICCI advisor said. Not only does this result in job loss in the country, but the government also loses out on customs and GST revenue which comes via legal trade. “Smuggling, counterfeit trade and piracy hold back progress, raises the cost of goods, leads to tax evasion, hampers job creation and creates safety hazards for consumers,” Anurag Singh Thakur, Minister of State, Finance and Corporate Affairs, said. He also emphasized that Indians must learn to differentiate between original and counterfeit products so that jobs and money can be saved. 

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