Contractual and daily wage workers bearing the brunt of the economic slump

The labour force has been worst hit by the economic slump in the automobile sector. Manesar, the automobile hub, is witnessing workers losing their jobs and being forced to work for daily wages

Daya SagarDaya Sagar   26 Sep 2019 6:26 AM GMT

Contractual and daily wage workers bearing the brunt of the economic slump

The labour force has been worst hit by the economic slump in the automobile sector Mathura's Premveer, 25, worked for Rs 8,800 salary in KGPL, the company in Manesar that manufactures Maruti car roofs, as a quality checker. Only under Premveer's supervision, the cars' parts were rolled out of the factory. However, three months ago Premveer himself was shown out of the factory.

Premveer recollects, "I reported the factory, duly washed and dressed for my duty one day when I was stopped at the gate. The guards told me not to come back. Besides me, 40-50 other employees were also terminated."

Now Premveer frequents the Labour Chowk to find a daily job. He manages to do so once or twice a week; remaining days he keeps waiting till noon at the Labour Chowk. Thereafter he proceeds to some factories for jobs and retires in the end to his room, the rent of which he pays by money his friends have loaned him. Premveer's friend Devendra, 21, told that so far he had scoured about 400 factories, but failed to secure a job for himself.

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The Indian automobile industry is suffering from an economic slump for the past few months. The Society of Indian Automobile Manufacturers (SIAM) registered a decline in automobile sales for the ninth month in a row. Many automobile manufacturing giants in India like Maruti, Toyota, Tata, and Mahindra have shown a 30% decline in car sales.

Factory production mirrors the fall in automobile sales. This is severely affecting the workers of these factories and their vendor companies. As per the Federation of Automobile Dealers Association (FADA), economic slump in the automobile sector has cost about three lakh jobs in 2019, including skilled, semi-skilled and non-skilled workers. However, the worst affected are those labourers who work for the factories under some contract or daily wages.

Manesar Labour Chowk sees thousand workers like Premveer, who had until a few months ago, worked as a contractual labour for some factory, but today are forced to look out for daily wages job. The situation is so bad that if a person comes seeking a worker to the Chowk, he is besieged by 50 people each entreating himself to picked.

The labour force has been worst hit by the economic slump in the automobile sectorThe labour force has been worst hit by the economic slump in the automobile sector

Gaon Connection, upon arrival at the Chowk, was also promptly surrounded by the labourers asking the nature of job and people's requirements. When a team member tells them that they have come not with a job offer, but to cover an issue they sit squatted on the footpath, disappointed.

Adjoining Gurugram, the Industrial Model Township (IMT), Manesar is considered the hub of the automobile sector. Here are based several companies like Maruti Suzuki, Hero Moto Corp, and Honda manufacturing plants and over one thousand vendor companies supplying automobile parts. Lakhs of workers are employed in these factories. Following the slump in nearly every company's production workers are being laid off.

Farooq Ahmed, 48, belongs to Rohtas district in Bihar and has been employed in various automobile factories of Manesar for the past six years. With his work experience, he had reached up to the supervisor level. His salary had also increased to Rs 18,000 a month. Since he began earning decently, he brought his wife and two kids to Manesar and had established his household in a two-room rented accommodation.

However, in August, his contractor asked him not to report to work saying that there was little work then, whenever the work would catch up in a month or two, he shall be called. Farooq still waits on Labour Chowk, looking out for daily wages jobs. He says, "Only once or twice a week I manage to get some work. Other days I go to other factories looking for work. If this continues for 10-15 days more I will have to return to Bihar."

Farooq Ahmed and his co-workers remain unemployed for several days.Farooq Ahmed and his co-workers remain unemployed for several days.

Farooq Ahmed told that many of his Manesar co-workers have already left for their villages. This is reaffirmed by workers contractor Ravi Yadav.

Sipping tea off a cart in front of Maruti plant, Ravi Yadav says, "Once I had the work from a dozen companies and dealt in 500 workers. But now I am left with 150 workers. Due to work shortage, many have left for their villages and some have moved to Delhi, Surat, Mumbai, and Ludhiana in search of jobs."

Ravi says, "It is becoming increasingly difficult to manage the labour. Somehow, I placate them. If asked I even have to extend loans. I tell them to wait for a few days or go for a little vacation and that after Diwali they will start getting work." Ravi fears that once gone, the labour force shan't return when the demand will eventually rise.

Working in Manesar since 2002, Muzaffarpur's Zia-ur-Rehman notes that in the past three months, the number of workers coming to Labour Chowk has doubled. He also says that 90% of these workers fail to get any work and have to return disappointed.

Seeing the slump in the automobile sector, the Union government had announced certain reforms towards August end. Finance minister Nirmala Sitharaman had increased the depreciation upon vehicle from 15% to 30% on August 24. Besides, she had eased the process of vehicular loan procurement by postponing the increase in the vehicle registration charges until June 2020.

The Union government had also removed the restriction on vehicle-purchase by government departments and had assured that BS-4 vehicle would continue to ply on roads even after March 31, 2020. On September 20, the government has even announced some relief in corporate tax and has taken it down to 22% from earlier 30%. Even the government is hopeful that after these reforms, the Diwali season would provide that much-needed thrust to the demand and rejuvenate the industry.

On August 24, the finance minister Nirmala Sitharaman had increased the depreciation upon vehicle from 15% to 30%.On August 24, the finance minister Nirmala Sitharaman had increased the depreciation upon vehicle from 15% to 30%.

Rajan Vadhera, SIAM's head, believes that had the government rolled back the GST rates for the automobile parts manufacturing firms a little bit, the step would have been much celebrated. Presently, upon 60% parts 28 % GST and 40% parts 18% GST is levied. Automobile parts companies have been constantly demanding a singular rate of 18% GST from the government.

Rajan Vadhera hopes too that these government measures would reduce the slump in the automobile sector and the vehicle sale would increase during Diwali season. FADA's head, Ashish Harshraj Kale also considers the government measures crucial for the automobile industry.

At the same time, Planning Commission's past Head Economic Advisor, Pranav Sen believes that the government is taking steps in the wrong direction to counter the slump. He informs that so far all government steps are towards promoting the production. But the government has not taken any effort in increasing the demand.

As per Pranav Sen, "Till the time the government won't spend on basic projects associated with rural India like MGNREGA, PM Housing scheme, Irrigation projects and PM Rural Roads Scheme, the purchasing power of common rural man will not be strengthened and the demand won't rise." Pranav Sen believes that if need be, the government must not shy away from increasing the funds for these projects.

Unaware of these developments, Rajesh Kumar Yadav worries about payment of his monthly installments of truck loans and drivers' salaries for the coming month. Rajesh is a transporter in Manesar Industrial Area and possesses 150 small and big vehicles. His trucks carry everything from new cars to trash out of the factories, but due to the economic slump, his trucks' movement is arrested.

Showing his trucks lined up on the road, Rajesh says, "Previously, 60-70 vehicles out of 150 used to be on duty, but now only 25-30 are running. The remaining can be seen here queued up on the road as you can see."

Rajesh who had become a transporter from a driver did not face such severe recession in his 30 years of business life. He says, "The situation has worsened to the extreme. Drivers and cleaners are being paid against loans that I have to take. I even have to pay my vehicular loan installments by digging deep into my savings. It cannot get worse than this."

Rajesh informed that about 100 of his vehicles are on installments. Besides, he employs over 300 drivers and cleaners out of which he had to lay off more than 50. He also told that many workers live in his neighbourhood have already left their rented accommodation to return to their villages.

The Indian automobile industry is suffering from an economic slump for the past few monthsThe Indian automobile industry is suffering from an economic slump for the past few months

The economic slump had not only affected the contractual or daily wage workers but also those holding white-collar jobs like engineers and managers. Having worked as a product manager with Machino Plastic, a company manufacturing bumpers for Maruti, Ram Chaudhary had left his job three months ago. He changed his field and shifted from automobile to dish and set-top-top box manufacturing firm.

Ram says, "I had gauged the situation pretty early so I gave my job or else I too would have been laid off. Many of my engineer colleagues were later shown out. Still, a few of my friends are looking out for a job."

About a thousand kilometres from Manesar in Gujarat's Ahmedabad, Ram's friend Deepak is also employed with the automobile sector as a quality engineer. Maruti Suzuki also has a manufacturing plant and over 100 allied factories in Ahmedabad.

Deepak informs Gaon Connection over the phone, "In Ahmedabad, so far regular workers haven't been laid off, but contractual and daily wage workers are getting lesser work. They are also facing salary cuts."

Deepak told that to balance the manpower, most of the companies have converted two twelve hourly shifts to three eight hourly shifts. So, even though the workers are getting work, but are being paid considerably less for eight hours instead of 12.

The trucks through which the cars and other vehicle reach other parts of the country are mostly idle. One of the companies operating such trucks is ITVNRV Logistics whose manager told that 70% of the fleet stands in the yard and only 30% are on duty.

Trucker Manmohan Tiwari says, "Previously, we used to do three rounds of Gujarat, Bengal, and Chennai every month, now we just do one. Lesser number of rounds means lesser income."

Returning from Manesar, we tried contacting a few factories' management. A few talked, while some even refused to comment. A few admitted to the layoffs due to work shortage while others denied the charges. They, however, said that there are no new hirings whereas, outside these companies, many unemployed youths were spotted with their bio-data looking out for jobs.

Companies do not look upon contractual and daily wage workers as their employees. They are simply hired by the companies to meet production's need and demand and fired when they are no longer required. And so as per these companies, "No layoffs have occurred despite slump."

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