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Victims of ’new economy’

Sunday 28 March 2004, by KATAKAM*Anupama

NOT to be outshone by the Central government and to catch the fancy of the common man in much the same way as the National Democratic Alliance’s "India Shining" advertising blitzkrieg, Maharashtra’s Democratic Front government developed a populist slogan, "Maharashtra Leads".

in Mumbai

However, the advertisements were half the size, not quite as dramatic, belied the facts on the ground and, unfortunately, had to be abandoned within a week of its launch in January.

"What exactly does Maharashtra lead in?" asks S.L. Shetty, an economist with the Economic and Political Weekly Research Foundation in Mumbai. The State’s debt burden amounts to a staggering Rs.80,000 crores and the social and economic growth indicators point to an abysmal performance over the past decade. Industrial growth has decreased, the employment rate has dropped by over 5 per cent since the early 1990s and employment programmes remain on paper. Little needs to be said about poverty, which is rampantly increasing. There is no effort to increase rural development and the public health sector is completely neglected. Infrastructure, the State’s strong selling point, is concentrated in urban areas while the rest of the State is ignored, says Shetty. "It is unfortunate that a State once known for its progressive policies has today lost its way." Successive governments have paid little attention to fundamental areas of growth. Instead, there has been an enormous diversion of resources and a complete mismanagement of the administration, he says.

Speaking to a cross section of people on the decline of a State that was historically a leader in industry and development, Frontline found that the general perception was that a combination of poor political leadership and neoliberal economic policies has had a catastrophic effect on Maharashtra. From the early 1990s it has been almost a free fall for Maharashtra, and the growth curve has hardly looked up since. With industries, both small and large, rapidly shutting down, the most threatening enemy of the State now is unemployment.

Take the case of 25-year-old Nilesh Karad. His family could not afford to send him to college as it needed him to bring in an income. Karad hoped he could find a job in an engineering company, which would train him to be a skilled worker. He still holds out hope, but for now works at nights on daily wages in a caterer’s kitchen. "I plan to save enough to study so that I can be better qualified. Maybe do a computer course because that seems to be the skill one needs these days," he says. In contrast, his father Shankarrao Karad came to Mumbai in 1963 after he heard about lucrative employment opportunities. Shankarrao boasts that he was offered jobs at textile mills, a pharmaceutical factory and even in the film industry. Today, he is a permanent employee working as an attendant at a well-known automobile company; not under contract, he is quick to point out.

With major industries shifting out of Mumbai and the `new economy’ shutting its doors on skilled industrial workers, unemployment and poverty rates have only risen. In the 1950s and 1960s, Mumbai was the hub of the manufacturing sector. Textile and chemical units topped the list. Pharmaceutical companies had a strong presence, and several hundreds of engineering plants mushroomed in the city’s industrial belts. During the past decade, the industrial trend has shifted from the manufacturing sector to the service industry, thus rendering millions out of work.

Mumbai’s mill workers have felt the worst blow. From a 2.5-lakh-strong workforce in 1981, their number has dwindled to 20,000. The textile mills were once the backbone of the city’s economy and the hope for thousands of migrants. Today most of the mills have shut down without paying workers their dues. Seven years ago, Suryakant Mahadik used to work at the Khatau Mills, earning Rs.6,000 a month. He now drives a taxi, earning about Rs.3,000 a month. "Even this work is very uncertain. I still have to borrow from friends," he says. Others like Abhay Jadhav see Mahadik as more fortunate. Jadhav, who worked at the Morarji Gocul Das Mills, now polishes shoes at a local railway station. He earns approximately Rs.2,000 a month. "We live on a day-to-day existence."

Suicides are not uncommon among the textile workers. Chandrakant Gavde committed suicide by jumping off a train after he was sacked from his job because he took two days’ leave to look after his sick wife. "But suicides have several definitions. You cannot put an exact figure to the number of unnatural deaths because many have died owing to problems such as inability to pay hospital bills," says Datta Isvalkar, general secretary of the Girni Kamgar Sangharsh Samiti, a trade union working in the textile sector.

Isvalkar says that the past 10 years have been extremely hard on workers. "The government’s policies are entirely responsible for this situation," he says. Even if a person does get employed, he or she gets appointed on a contract. This means he or she benefits from no safety net and can be fired at any time. In the early 1960s, 51 per cent of jobs in Mumbai were in the organised manufacturing sector, where workers had permanent employment and assured benefits like leave and provident fund. Today about 65 per cent of Mumbai’s workforce works under contract.

The decline of Mumbai’s textile mills also spurred the growth of the powerloom sector. In order to meet the demand for grey fabric, powerloom centres sprang up in various parts of the State. Textile and migrant workers came in droves to find work at these centres. Bhiwandi, about 50 km from Mumbai, became the largest powerloom centre in the country. The State government estimates that over 40 lakh people are dependent directly or indirectly on the looms of Bhiwandi. With cheap labour available, loom shed owners have exploited the situation. They pay well below the minimum wage and provide inhuman conditions to work in. "Hundreds die of tuberculosis because they inhale cotton lint and many are handicapped by physical disabilities every year," says Baliram Choudhary, a trade union activist in Bhiwandi. "There is absolutely no protection for the workers. If you protest, you can be sacked. In Bhiwandi, it is possible to pick anyone off the road and they are prepared to work for any amount."

A recent strike called by loom owners to protest against the Central government’s proposal to levy excise duty on grey fabric led to the closure of sheds for one month. More than four lakh workers had no source to a livelihood. Mohammed Munir, who has been working in Bhiwandi for more than a decade, says: "Not that when the looms are working our lives are any better." Munir earns Rs.1.70 a metre of cloth he weaves on the loom. He operates four machines simultaneously to make about 44 m a day and what he earns hardly sustains his family. Munir lives in a slum with his wife and children. There are no civic facilities available. But he has no place to go. Having sold his farm in Uttar Pradesh to get to Mumbai and then to Bhiwandi, Munir has few options available.

Every day thousands of people like Munir make their way to Mumbai from drought-prone areas or from places where there is little hope of survival. Hoping to find work, which would help put an end to mounting debts, migrants are found in every sphere of the city. In fact, the situation came to a head recently when the Shiv Sena instigated attacks against workers from Bihar. The Sena, which has launched a "Me Mumbaikar" campaign, believes that work must rightfully be given to Maharashtrians before the immigrants. Even the original inhabitants of Mumbai, the koli fisherfolk, have begun an aggressive movement against the "outsiders" who are ruining their business. "Migration is a fallout of development with the focus on non-agricultural sectors. And the fallout of urbanisation is the proliferation of slums," says the 2002 Human Development Report (HDR) on Maharashtra. Almost 49 per cent of Mumbai’s population lives in slums.

Ironically, Maharashtra holds the first position among States in terms of per capita Gross State Domestic Product (GSDP) for the period 1998-99 to 2000-01. However, the compounded growth rates for the State have dropped sharply from 6.02 per cent a year for the period 1990-91 to 1995-96 to 3.27 per cent a year during 1995-96 to 2000-01. In contrast, Karnataka has registered an increase in growth rates from 4.64 per cent a year to 7.49 per cent a year during the corresponding periods. The human development index ranks Maharashtra fourth after Kerala, Punjab and Haryana.

Maharashtra continues to attract the largest investment, both foreign and domestic, says C.S. Deshpande, head of the Maharashtra Economic Development Council. He adds: "But the image that it once had as a business friendly destination appears to be lost." Hence Maharashtra lost out to the southern States in attracting investments in the Information Technology and biotechnology sectors. But things are looking up, particularly in areas such as tourism, the auto industry and manufacturing in a small way. Some employment is also being generated in areas such as business processing, the media and entertainment. But the government still needs to concentrate on employment programmes such as the Employment Guarantee Scheme for everyone to feel good.

See online : Frontline


in Frontline, Volume 21 - Issue 05, February 28 - March 12, 2004.

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