Need for guidelines on salaries,wages, working hours etc.

In the last little over 20 years, the governments both at the centre and states have increased the salaries of their employees so much that private sector employers are unable to pay even 50% of government salaries. The result is that highly educated candidates with degrees like M.E., M.Phil are sitting for competitive exams for the posts of Village Administrative Officers, Constables, Junior Assistants etc. for which the minimum qualification required is pass in 10th/12th Class.  This means that these candidates have wasted their time and money. Each vacancy in government service attracts, 200-300  candidates.

Again for equal  work, pay is unequal between govt and private sectors. For example elementary school teacher is paid around Rs.25000/- per month in the government schools while in private schools, they are paid around Rs.5000-6000/ p.m. and the private schools are unable to pay more. To more or less equalise the salaries in government/private schools, govt. should freeze the salaries in govt.sector and allow private sector to increase the tuition fee on the condition that they should pay higher salaries. Some sort of subsidy could also be considered.if it is considered not desirable to increase tuition fees.

There is also vast difference in the salaries in the organized sector and unorganized sector in private industry and business establishments. This also needs to be minimised.

The governments should therefore issue guidelines (not enforceable orders) to the private sector on salaries. For example. governments, taking into considerations its own level of salaries may suggest salaries of persons with +2 qualifications as Rs.15000, degree holders as Rs.20000/,  ITI qualification as Rs.16000, diploma holders as Rs.18000 etc. Employers should of course be free to pay more or slightly less.

 

 

 

 

Capital,wages,prices,taxes

If the owner/company does not invest capital, workers do not get employment and earn wages. If the workers do not work, owner/company does  not get profit. There are people who think that excess(more than reasonable) profit should be distributed among the workers. Some others think that excess profit is due to the company charging higher than the reasonable price and that prices should be reduced so that the profits of the company are reasonable and the consumers are not exploited. There is yet another view that the government should increase the tax rates or new taxes should be imposed. All the views seem to be correct.The point to be considered and decided is which action will expedite development of the country as a whole. Going by the experience, government getting more taxes is not going to help the country much as benefits of its schemes do not reach the people in full and often result in wasteful and unproductive work. As the number of consumers is too large, the price reduction can only be negligible and the consumers will not feel the benefit.As regards increase in wages/payment of bonus to workers, this will increase demand for products which may lead to higher  production and higher GDP. However, if the workers are already getting reasonable salaries, they should not get additional amount.The only option left is to allow the company to retain the excess profits, so that it can expand its existing factory or set up new factories. However, it should be made clear that new taxes are not imposed only if the profits are used for expansion of the existing factory or setting  up of a new factory, thereby generating employment, increasing production and thus  contributing to the expansion of  GDP of the country..

 

MANIFESTO FOR ELECTIONS TO TAMILNADU LEGISLATIVE ASSEMBLY(2)

1. AGRICULTURE AND IRRIGATION

The government will procure all the vegetables that could not be sold to the public from producers at a guaranteed price of Rs.10/- per kg for tomato and Rs.15/ per kg for brinjal. Rates will be fixed for other vegetables treating these as base prices. Procurement price for paddy will be fixed at Rs.1800 per quintal. The prices of agricultural produce are very low and unremunerative and there is a need to increase the prices.

The wages of unskilled agricultural and other laborers have gone up from Rs.35 per day to Rs.150 per day in the last few years for women and from Rs.70 per day to Rs.350- Rs.400 per day for men. This is a welcome correction of wage level. The employers have got used to this high wage level. Similarly consumers will get used to higher prices of agricultural produce particularly since our government will provide jobs to all able bodied and willing people by undertaking massive works like digging lakes, canals, wells, laying roads,  power transmission lines, solar power stations, hydro-electric power stations etc.

government would set up a separate Ministry for irrigation. In addition to constructing new dams and canals, this ministry would have the following responsibilities;

i.Linking rivers in the state.

iii.Creating links among lakes and between lakes and rivers.

1. looking after the Lake management including deepening lakes and continuously desilting them
2. Creating new lakes to ensure that each village has a lake
   vi. Looking after Water management including draining rain water in pits and other shallow water into the nearby lakes. Water left in pits evaporates and it does not recharge ground water. When lakes have sufficient water, underground water will be recharged.

vii. Keeping the lakes and rivers clean

viii. Cleaning waste water and then using the same for irrigation without letting into the lake. This will ensure that lake water is not contaminated and this water can be used for drinking after purification.

1. Cleaning river banks and ensuring that no garbage is dumped there
2. Sanctioning loans for digging irrigation wells including bore wells. If lakes have water, digging wells will not lower the water table. It is wrong to ban new bore wells,
3. Tamilnadu receives around 100 cm of rainfall per year on an average. If the rainwater is harvested to the maximum extent possible, two- three crops can be raised in most of the places. Tamilnadu will become surplus in food grains under our government.

xiii. While supplying water to people from reservoirs/rivers hundreds of kilometres away is welcome, this is not as reliable a source as local lake water.

xiii. Each district would have a senior water resources development officer with technical staff and with adequate powers to sanction construction of lakes and related work

The per capita production of food grains (rice, wheat, coarse grains and pulses) in India is less than 200kg per year while in the world it is over300 kg. This means that India’s performance in agriculture needs to be improved vastly. In India among the various states, Tamilnadu’s performance is very poor. During 2009-10, India produced 218 million tonnes for a population of around 1180 million. The per capita production is about 185 kg per year. Tamilnadu state produced about 8.0 million tonnes for a population of about 67 million people, which works out to a per capita production of only 120kg per year.

India’s production went up from 176 million tonnes in 1990-91 to 218 million tonnes in 2009-10 which works out to about 24%increase in 20 years. This increase itself is low. But increase in Tamilnadu is very much lower at 8% from 7.4 million tonnes in 1990-91 to only 8.0 million tonnes in 2009-10.

With the policies of our government, agricultural production will increase atleast by 100% in 5 years.

Water is a renewable resource. The ground water automatically gets recharged as it rains and there is no problem in exploiting ground water. There is no question of excessive exploitation as once the water dries underground there can be no exploitation. Moreover, the dangers of flood will be minimized when there are more open and borewells and lakes as the recharge of ground water and lakes will take much of rain water leaving lesser water to flow into the rivers.

Subsidies to farmers will be gradually reduced; if necessary by increasing the prices of their produce.

restrictions on exploitation of ground water will be removed.

To meet the labour shortage in agricultural sector, there will be further mechanization-in sowing, planting, weeding, harvesting, thrashing etc.

Restrictions on farmers and others for removing soil from the lakes for use in fields, brick kilns etc. and the lakes will be removed as this will lead to desilting of lakes free of cost.

While the quantum of rainfall in a year has not changed much, the rainfall has not been timely. In order to ensure timely rainfall, it would be useful to resort to cloud seeding and simultaneously to undertake research on refining the existing technology to achieve lower cost, safety, avoid pollution, avoid lower rains during the period subsequent to cloud seeding. Research by as many universities as are willing would also be funded by the government. Cloud seeding is not new to Tamilnadu, as it had already undertaken several times in the past starting from 1960s in Nilgiris district, though there was a long break after 1960s. Several countries, particularly in Asia like Thailand, China etc are resorting to cloud seeding. Each district would have one organization to undertake this operation. It can be a public or private organization.

Inflation and economic Development

It is important to create demand for goods and services before the products are made in India and services sector is established. How do we create demand? By putting money into the hands of as many people as possible. If we take various sectors of the economy, agriculture sector is the one where more than 50% (nearly 65%) of the people are engaged. If those in the agricultural sector are to have surplus money to purchase additionally produced goods and services, the prices for the agricultural products should be increased for farmers and the wages of agricultural labourers should be increased. This will mean:

1. When prices of onions, tomatoes, rice, wheat etc go up, there should be no agitations against the price rise
2. There should be no ban on exports of these items

• There should be no permission for imports of these items

1. There should appropriate storage facilities  to store surplus production and there is no distress selling
2. Farmers should be employed full time i.e. at least for 8 hours a day. This will require farmers to take up allied work like dairy farming, poultry farming, goat and sheep rearing, honey  making, rope  making etc. or intensive farming like multiple crops, good irrigation, etc.

People not engaged in agricultural sector will suffer with increased prices. To remove their sufferings their wages should also be increased. Their wages otherwise  also will go up with large scale demand from farmers and farm workers for the manufactured goods leading to higher profits for factories which in turn will lead to higher wages.

Profits, salaries,wages,prices,money,physical strength

There seems to be wrong notions about wages, prices, investment, development and related issues among the people,political parties, intelligentsia etc.

Some of the wrong/irrational notions are:

i. that if profit is substantial companies’ management can enhance the salaries of top executives exorbitantly rather than think of reducing the prices of products/services in the coming years.( The government should consider imposing a limit on salaries/perquisites of top executives as in the past)

ii. that if there is profit, the companies should share it with employees by giving bonus to them rather than reduce the prices in the coming years or invest the money to produce and employ more

iii.that there should be universal which means additional employment but there should not be inflation

iv.that procurement prices of cereals,milk, eggs etc.should be increased but consumer prices should remain unchanged.

v.that wages of agricultural labourers should keep increasing but prices of vegetables and fruits should not go up

vi.that workers should not be asked to improve productivity but prices of manufactured goods should come down

vii.that wages of workers,drivers,cleaners, engineers,mechanics, office staff etc. should be increased periodically but the train and bus fares, electricity charges,cleaning charges, etc should not be increased

viii.that charges for any service should not be increased but the quality of service should be enhanced.

ix. that people should have more entertainment, comforts, luxuries etc. but need not put in additional labour.
(People do not think that while money not spent on any occasion can be saved and spent on other occasions but physical strength can not be saved for using on some other occasion. It is therefore necessary that one should work as long as possible when the opportunity comes.)

religious,social leaders,writers etc. talk of virtues of people with money giving charity to poor people,but nobody talks of people who are physically strong and healthy, helping physically weak people.

people talk of short duration of prosperity but they do not talk of shorter duration of physical strength.

money not spent can be invested for development, for creating jobs etc. while physical strength not used, for doing work cannot be put to any other use.

Did/Does Tamilnadu Government have manpower planning?

A large number of Teachers Training Institutes(TTIs) were estblished a few ylears ago in Tamilnadu and a very large nmber of elementary and high school teachers were trained. Most of the “teachers” have not got jobs and many of them have already waited for even 10 years to get jobs. Consequently the number of candidates opting for these courses has decreased and some of the institutes have already been closed causing loss of lot of money.Individuals’ loss ultimately is loss to the state.

On the other hand,not many Industrial Training Institutes(ITIs) were established and not many technicians were “produced”.Factories and common people are finding it difficult to secure the services of technicians like electricians, carpenters, fitters, mechanics welders,plumbers etc. Their services have become prohibitively costly. A lot of work remains undone on account of shortage of technicians’

It was not difficult for the government to anticipate the approximate or even maximum number of teachers required in future. Government should have discouraged people from establishing excessive number of institutes. Government should also have given advisories to the people about the anticipated number of teachers required so that they would have thought many times before going in for the teachers training course.

Similarly it was not difficult for the government to anticipate the boom in industrial activity (from the number of applications for setting up factories),production of automobiles, construction activities etc. Govenment should have itself established additional ITIs and encouraged private sector to establish the ITIs.

To make matters worse,government has bestowed so many free things to th people and to some extent was responsible for the increase in general wages that existing technicians do not find it necessary to work for more than a few days in a month to earn enough to meet the expenses. The shortage of technicians has become more acute and economic acivities have come to remain low.

If only the government had undertaken manpower planning the economy would have grown much higher. One hopes that at least now the government undertakes the required manpower planning and also encourage people to work longer by withdrawing free supplies.

The mandate of the Employment Exchanges should be extended from just sponsoring candidates against vacancies to actively associatig themselves in training the manpower for anticipated vacancies in various sectors of th economy.

Indian Economy

Indian economy is quite sound as can be judege from the following:

i. there is no unemployment or the unemployment is very low now, compared to what it was in the past. In fact there is shortage of labour in every sector of the economy- in agriculture, industry, plantations, transport etc. Shortage of labour is seen both in the urban and in rural areas.
ii. production is increasing as can be seen from the increasing number of trucks moving goods across the country
iii. industry has no problem in getting finance, either by way of equity or loan from banks or other financial organizations-postponement of initial offerings by companies does not mean that the public are not interested in buying equity shares. It only shows that the prices of the offerings have been placed high.
iv. there is no dearth of loan facilities for agriculture
v. finance for acquiring vehicles is available from a large number of organizations
vi. there is no problem in selling products/commodities, (though sales promotions are required. ) This is because of higher purchasing power of people in general.
vii. the expenditure on food as a percentage of total expenditure f the households is continuously decreasing showing an increasing number of products being used by the people. This shows higher standard of the living of the people.
viii. prices are going up, but wages have already gone up and still are going up. Thus,price increases is not a major problem. For example, between 2006 and 2010 wages have gone up by about three times in most l cases. On the other hand, prices have gone up by 50%- 100% (which has resulted in higher standard of living of the people).
ix. people no longer walk even short distances. They use mopeds,motorbikes and cars. Very few people use bicycles. People are in a position to afford these luxuries now. They even travel by motorbikes for even the currently “low” paid jobs.
x. there is no communication problem now. Most of the people have cell phones.
xi. the markets are full of things –food items as well as industrial products.
xii. stock markets are volatile. Price of gold and silver is increasing,but this cannot be called economic crisis,but can only be called speculative activity. If FIIs are banned ,institutional investors are restricted in the secondary market, the markets will be steady.
xiii. however, there is a lot of scope to increase productivity, increase consumption and thus, expand production and GDP.
xiv. interest rates have gone up leading to higher cost of production, but the prices of all products have also gone up .Thus,the purchasing power of the interest amount from the deposits in banks,etc. Would have become lower, if interest rates are not raised. In other words, depositors would have suffered badly.
xv. there is shortage of labour. This can be solved by increasing mechanisation. In agriculture for example, mainly ploughing has been mechanised. There is scope of mechanisation in planting, weeding, harvesting,thrashing,etc. In industry also, there is a lot of scope for further mechanisation. This is how industrial revolution took place in Europe a few centuries ago.
Xvi. The problem of pollution should be tackled with proactive participation of the government.
xvi. Global warming is talked about but we are witnessing coldest winters and hottest summers which can rightly be called weather extremes rather than global warming.
xvii. higher public/government debt in itself cannot be an economic crisis if the debt has been incurred for productive purposes and the labour productivity remains high. after all, money can always be created by the government monetising debt.
As the fundamentals are strong in Indian economy, external happenings should not affect it. However, it does affect because of speculative activities. It would good to control speculations.

World Food Situation- No need for alarm

Food situation in the world in general and in Africa in particular is not as alarming as the protests against food grain prices in several countries, as also the warnings by FAO economists suggest. Low production is a very serious matter which defies solutions but price increase is not impossible to be tackled by increasing/extending subsidies, loans etc. While main food grain producing countries have witnessed slight decline of less than 1.5% in production,(less than 10% of carry forward stock) most of the African countries like Ethiopia, Eritrea, Kenya, Malawi, Niger, Somalia, Uganda, Zimbabwe etc. have recorded higher production in 2010 than in the previous year. Higher prices in 2010 for food grains are likely to lead to a higher production in 2011, as farmers will be encouraged to try to produce more, by higher income. The lower production of food grains in main producing countries will only mean lower stocks being carried forward to the next year and not non-availability of food grains.

It is also heartening to note that wages in most of the African countries have increased during the last few years and thus people have more money to meet the higher food grain prices. It is also pleasing to note that among the 20 fastest growing economies in the world, as many as 11 are in Africa. In other world, out of 53 African countries, 11 are witnessing very high economic growth rates. (Among the 140 non-African countries, only 9 are witnessing high growth rates.). Thus, the people will be able to absorb the higher prices without much difficulty.

From the long term view also, India alone has the potential to double its production of food grains from about 225 million tonnes to 450 million tonnes. If India achieves just 50% of its additional food grain production potential, the world will not have food insecurity at all. Even without bringing in additional land under cultivation, Africa has the potential to double its production, as its yield is very low. What is required is substantial investment in irrigation projects.

Price rise in India

Both the rightist and leftist political parties blame the central government of India for the price rise. Almost all the political parties continuously demand increase in wages of all workers and employees-agricultural workers, textile workers, factory workers, bank employees, government employees, public sector industrial workers etc. and the wages and salaries keep increasing. Not only this, the political parties also demand more regulations on working hours-shorter work time. This means lower production. When production/productivity is low and wages keep increasing, it is natural for prices to keep going up. The prices would have gone up, whichever party had been in power.

 20-30 years ago, one should have been seriously concerned about sufferings of unemployed and under employed people consequent on price rise. But now, the issue before the country is not unemployment or under employment but of shortage or acute shortage of labour on all fronts- agriculture, plantation, industry, construction, service sector, trade, petty business, domestic work etc. The labour shortage is felt both in urban and rural areas. If the employment exchanges show increasing number of registrations, it is only due to unwillingness of people to take up jobs which do not require their educational qualification. If prices increase, people can think of taking up available jobs, working over time, doing two jobs (one full time work for 6 hours and one part time work for 2-3 hours. Agricultural workers and others in rural areas work only for 5-6 hours). This will incidentally minimize the labour shortage.

Longevity has gone up. Pensioners are getting pension for longer period now than before. One way of curtailing price rise will be to increase the age of retirement by about 5 years thereby increasing the availability of workforce.

School education could be curtailed by 1-2 years and university education by six months-one year. This will make available more number of people for work which will increase production.

In this connection, it may be relevant to mention that the government while prescribing minimum wages for workers in particular sectors should fix wages per hour instead of per day.

Bharat Bandh uncalled for

Increase in diesel, petrol, cooking gas prices should lead only to a marginal or negligible increase in overall prices as:

a) The price of diesel was increased by Rs.2 per litre i.e. by around 6%. The cost of diesel in the truck freight charges is only about 40-50%, the balance being the cost of driver, cleaner, depreciation and profit margin. Thus the freight charges should increase only by about 2.4% – 3%.

 b)transport charges in the retail cost of any product is only 5- 10%, the major components being cost of raw materials, interest rates, depreciation, profit margin, wages & salaries, tax, advertisement charges etc. Thus the fuel price increase should lead to general price rise of just 0.12 to 0.30% i.e. if the retail price of a product was Rs.100, it should cost now only Rs.100.12- Rs.100.30 i.e just 12 -30 paise more, which is definitely negligible.

c)In the case of  auto rickshaws, one litre of petrol gives about 25 kilometers for which the charges are around Rs.150. After price increase it could go up to only Rs.152 or just 1.67%.

 d)in the case of private use of motorcycles, assuming an average consumption of 10 litres (traveling about 800 to 1000 km) per month by a person with an income of Rs.20000 per month, his expenses on petrol will go up by just Rs.35 only i.e less than 0.2% of his income which again is negligible.

 e) cooking gas price has gone up by 10% but average consumption in a  family per month is just 1 cylinder or increase in expenses is only Rs.35 or less than 0.2% of the monthly income.

 f) overall additional expenses for a middle class family shall not be even 1% and this every one can easily absorb

 g) the interest rates had drastically come down recently(by about 4 percentage points) as a measure of reversing the economic slow down. Truck owners, auto rickshaw owners, and manufacturers who usually get finance from banks save a substantial amount on this account. They can easily afford to absorb the additional expenses due to fuel price increase, in stead of passing on the same to the customer. Even if they pass on the additional cost to consumer, consumer’s burden is negligible.

 h) the common man, who works under employment guarantee scheme got an increase of 25% in wages, from Rs.80 to Rs.100 three months ago. So he should not have any problem in meeting less than 1% increase in cost of living.

 i)the increase in salaries of central and several state government and public sector undertaking employees on account of 6^th  Pay Commission as also income tax liberalization will enable employees to bear the additional expenses without any difficulty.

 In view of the above, it appears that Bharat Bandh is uncalled for. At the same time the government should restrain truck owners from increasing their charges/prices on the pretext of fuel price increase, beyond 3%, auto rickshaw owners and taxi owners beyond 2%, and manufacturers beyond 1%.