That capital-intensive industries are growing faster than labour-intensive ones in India is a paradox, but well known, reports fe Bureau in New Delhi.
That capital-intensive industries are growing faster than labour-intensive ones in India is a paradox, but well known, reports fe Bureau in New Delhi. Fresh research from Icrier, however, shows that since capital-intensive firms are growing much faster, the total employment growth in such firms is higher than in labour-intensive ones. The bad news, however, is that the amount paid to workers has fallen from 28.6% of gross value added in FY01 to 17.4% in FY12. The share of interest fell from 29% to 19% while that of profits rose from 19.9% to 46.2%.
Within the total wage bill, the share to supervisory and managerial staff rose from 26.1% to 35.8% while that to production workers fell from 57.6% to 48.8%. The rise in contractual employment — from 15.7% to 26.5% of organised manufacturing — is not a cause of worry, but means ways have to be found to ensure contractual workers get pension and other benefits; that means greater use of the New Pension Scheme and even insurance schemes. With just 4% of workers in manufacturing with a technical education and just 27% vocationally trained — 86% of these are informally trained — this needs serious attention since the skilled are earning more.