Falling Fortunes

- Arun kumar

The pressure-cooker manufacturer Prestige reported soaring profits last year, as did its primary rivals in the cookware market. But the good news for these companies came with bad news for the economy. The chairperson of Prestige told The Hindu that increased profits had come hand in hand with a fall in competition from the unorganised sector. “There are three or four organised players” in the industry, he said, listing a few rival brands. “The rest are all unorganised.” Since the government had implemented the goods and services tax, or GST, “the unorganised competition is reducing.”

Official data claims that the Indian economy is growing at more than 7 percent per annum. But unofficial data contradicts that contention. A recent survey by the All India Manufacturers’ Organisation revealed that the economy has not yet recovered from the blows of demonetisation and the GST. The survey, based on data from 34,700 of the AIMO’s 300,000 member units, showed that the number of jobs in micro and small enterprises had declined by roughly a third since 2014. In medium-scale enterprises, about a quarter of jobs had been lost, and among traders the decline was over 40 percent. Data from the Centre for Monitoring Indian Economy, a business-intelligence firm, shows a loss of 11 million jobs last year, most of them in the largely unorganised rural economy. Between 2004 and 2007, when the economy was actually growing at 7 or 8 percent, there was a clear “feel good” factor across both the organised and unorganised sectors, and almost all segments and industries did well. Today, large sections of society— farmers, traders, young people, and many more—are protesting. Recently, more than 25 million people applied for 90,000 relatively low-level positions in the railways. The desperate applicants included holders of engineering, business and commerce degrees.