Guaranteeing unemployment

While various politicians, especially those in the ruling United Progressive Alliance (UPA), have been keen to guarantee jobs for the ‘aam aadmi’ in some form or the other over the years, either directly in the form of Mandal-style reservations/affirmative action or indirectly through unemployment insurance as in the UPA’s rural employment bill, each has steadfastly refused to see what was under their very nose.

Namely that it is economic growth that creates employment, and that if not enough jobs are being created (the so-called jobless growth argument you keep hearing), it is because of political roadblocks.

Anyone even remotely familiar with the Chinese experience knows, for instance, that it is the policy of hire and fire that has played a major role in that country’s spectacular economic growth and job creation—when industrialists know they are free to close down their units and retrench labour in the face of an economic slowdown, they are that much less hesitant to create fresh capacity as compared to a situation (as in India) where they have to keep the labour even if the business is no longer profitable.

Another political roadblock, as the World Bank’s surveys have helpfully pointed out, is that it takes 89 days to start off a business in India—why would anyone want to set up a factory and create jobs if it takes that long to do so, another 425 days to legally enforce a contract, and another 10 years to close down the same business if you find it’s not profitable?

What’s now been added to this school of knowledge, thanks to the efforts of Parth J Shah and Naveen Mandava of the Delhi-based Centre for Civil Society (CCS), is an entirely new dimension, that of how perverse government policy restricts employment possibilities for the poor, rickshaw pullers and street vendors.

Shah’s CCS did pioneering work when, in 2003, it came out with the Delhi Citizen Handbook, which exposed the rot in Delhi’s governance.

Law, Liberty and Livelihood, of course, is not in the same league as the Delhi handbook, since such work goes back to the mid-90s, when Madhu Kishwar and Manushi even petitioned the courts on the matter.

Whose work came first is a matter of some acrimony and a letter has been sent off to the organisation that has awarded CCS for its efforts, but this needn’t detain us in this review—what’s important for us is that Shah has, as in 2003, brought out the nature of the problem very evocatively and through well-chosen examples, using personal interviews as the means to gather information.

Fat-cat businessmen paying bribes is one thing, but did you know that a toy seller occupying three feet by four feet on a pavement pays around Rs 1,000 per month to the shopkeeper before whose shop he sets up his stall and another Rs 250 to the police, or that a clothes-seller occupying a seven by six space pays Rs 300 to the shopkeeper and Rs 1,000 to the police? Or that a mehendi-wallah with 2.25 square feet (that’s what 1.5 by 1.5 feet works out to) pays Rs 800 to the cops?

The idea is not to show that the police are corrupt (they’re also underpaid) or that they fleece the poor (we all know that), but that the laws are designed in such a way to almost ensure this happens, to ensure that fledgling businesses, if you can call them that, do not develop beyond a point—Shah has examples of a watch repair man who set up shop with an investment of Rs 1,000 around 13 years ago and has a business capital of only Rs 5,000 now, and of a hawker of diaries who began his work with an investment of Rs 3,000 six years ago and now has goods worth only Rs 3,500.

None of this, of course, is surprising when you consider some of the laws this report highlights. Delhi, for instance, has half a million rickshaw-pullers but the MCD has said the upper limit for licensing these is 99,000—naturally, then, the other four lakh are easy game for policemen to exploit. It gets worse.

Normally, you’d expect that as a business does well, you expand—so, in the case of the rickshaw trade, enterprising people would buy more than one rickshaw and hire drivers to ply them, in exactly the same manner that happens in the case of auto-rickshaws and taxies.

Well, Article 3(1) of the Cycle Rickshaw Bye-Laws of 1960 requires that the owner and driver of the cycle rickshaw must be the same person!

Makes a mockery, by the way, of the same law, which says that while no one will be given more than one licence (presumably to ensure no one gets rich out of the rickshaw business), the Commissioner has the power to grant more than one licence (subject to a maximum of five) to a widow or a handicapped person.

This may be a family business, but if the owner is unable to ply the rickshaw due to ill-health or whatever, the rickshaw must remain unutilised.

The Delhi Municipal Corporation Act of 1957 has another Rule 6, which governs sale of ice cream by hawking and says “the icecream salesman will not shout to attract customers nor will he sit or lie on the trolley at any time”, while the Mumbai “technical conditions” governing hawkers say “they should not hawk within 100 metres from any place of worship, holy shrine, educational institution and general hospital and within the periphery of 150 metres from any Municipal or other market”.

Other acts lay down the distance between water trolleys and how many animals each owner can get slaughtered in a day. If the government can’t guarantee jobs, as indeed it shouldn’t, at least people should be freed up to ply their own trade.