News Wrap

Though India’s gross domestic product is growing by 5.5% year on, it is creating barely any formal employment, and not the ten million or so jobs needed annually, to absorb new recruits to the labour force, as the population grows. The working age of India’s population is set to rise from 749 million to 962 million, in 2030, over the two decades. There is a crisis in the manufacturing sector such as clothing, as Indian investors favour capital-intensive businesses. Even where there is demand for labour, there is a shortage of supply of suitable workers, owing to the poor quality of education and training. Skilled workers are lacking for the service industries and the high technology outsourcing sectors where India has succeeded. From the time a company hires, one spends a minimum of six months on training, until the candidate is employable. Employment data is sketchy. Given the small size of formal sector, and the evident inactivity and under employment of tens of millions of Indians in villages and cities, official unemployment figures of 3.8% of the workforce is an understatement.

Unlike in China, the Indian companies stay as small as possible to escape labour laws. Employers are wary of outdated and worker-friendly labour laws, including the Workmen’s Compensation Act, dating 1923, and the Payment of Gratuity Act dating 1972, and are reluctant to hire permanent staff. There is an increasing reluctance of Indian enterpreneurs to employ unskilled workers. For young Indians, even with skills, it is harder to find jobs, without going abroad. As unemployment rises, depression and anger increases, leading to alcoholism and substance abuse, even violence within families.

Airport Development
The union government of India had provided use of land to GMR Infrastrucutre, for development of Delhi airport, with investment of Rs 1800 crore for the land, for land which carries a commercial value of Rs 25000 crore (approx). Airport modernization in Delhi is being funded by equity and debt. The government has allowed GMR to levy a development fee on every passenger, flying in and out of Delhi. Passengers at Delhi airport are actually paying nearly three-fourths of the modernization cost, and not the promoters.

The levy of Airport Development Fee (ADF) by GMR was struck down by a Maldives Court in 2011, in respect of Male Airport. Even as India stressed on ‘fulfilment’ of all legal processes relating to compensation, the Singapore Supreme Court has ruled in Dec 2012, that the Maldivian government has the authority to reclaim the Male Airport from GMR Infrastructure and Malaysia Airports Holdings. The judgement settles the sovereign right of a nation and the legality of the agreement. Fresh warngles are expected over the compensation to be awarded.

UK aid to India
United Kingdom’s annual aid to India is about 280 million, which is less than 0.03% of India’s national income, and 2% of India’s union government’s spending on food subsidy and rural employment programmes. Justine Greening, UK’s Development Secretary has recently announced the end of aid to India in 2015. Continuing squalor and economic degradation of about half of the Indian population exist with India’s rapidly growing economy and its own space programme. India needs progressive fiscal policies that raise taxes from the rich to ensure the basic needs of the people. Strategies that encourage more productive employment and economic diversification are urgently required. But British aid has never been a catalyst for positive change that extends beyond specific projects on the ground. The aid has never filled gaps in official or other local spending on particular development concerns. Aid to India is a political tool and supports British strategic interests. Britain was dismayed recently over India’s decision to buy fighter jets from France. The UK Government has been pressurising the Indian government into accepting intellectural property clauses that will increase drug prices in a trade agreement; and in getting extra protection and compensation for its own coampanies.

Hunger strikes in Ural
Some 2000 km east of Moscow, Verkhnyaya Sinyachikha in the vast metals and manufacturing province of Sverdlovsk in the Ural mountains has long been a backbone of support for the Russian President Vladimir Putin. The provincial Russian town has 9800 people, located 145 km from the regional capital Yekaterinburg. Loyalty to Putin is being tested in the Ural, with hunger strikes in about five factories, over unpaid wages. The plants manufacturing trucks and small parts have gone bankrupt. Workers are used to being paid late, and each worker now awaits 20,000 roubles ($639) severance pay and back wages. Moscow is tackling the social unrest with government subsidies, increased orders from state-owned tank maker Uralvagon-zavod, and 30% lowering of electricity tariffs. Hunger strikes and the cost of maintaining factories and steel mills in Novouralsk, Verkhnyaya and Rezh is adding to the anger over the widening gap between Russia’s rich and poor.
Turks and Caico Islands

The Turks and Caico Islands, are one of Britain’s five remaining Caribbean island colonies. Following an election in November 2012, governor Ric Todd has returned the islands to self-rule, after three years of direct administration. The new premier Refus Ewing and the opposition leader Sharfene Cartwright-Robinson claim that Ric Todd disregarded the civil service, political leaders and the clergy, during the democratic hiatus. Evangelical pastors allege that the new equality legislation protects gay rights. Business people are furious over a value added tax. The second spell of direct rule from 2009, under former premier Michael Misick, was full of systematic corruption. A new constitution promises tight controls on financial management, procurement and sales of crown land. Links with Britain are weak and fractious. While the islanders drive on the left, they can reside in Britain. The currency, most of the tourists, and TV programmes are American.

Vol. 45, No. 29, January 27- Feb 2, 2013

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