The Hindu Editorial Analysis- 24th February 2025 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Indian industry needs innovation, not mindless toil

Why in News?

Many Indian industrial workers endure long working hours in poor conditions, while corporate leaders advocate even longer hours. This highlights India’s reliance on cheap labor rather than technological advancements, limiting long-term industrial growth and innovation.

Long Working Hours for Industrial Workers in India

• Many industrial workers in India work 11 to 12 hours daily in garment and auto-component factories.
• During peak production times, workers do not get any breaks for days.
• Outside of work, their time is spent on commuting and household chores.
• Despite this, some corporate leaders in India advocate for even longer working hours.

High Informality in Employment

• The Periodic Labour Force Survey (2023-24) found that only 21.7% of Indian workers have regular salaried jobs.
• The majority are casual workers or self-employed, with half of the salaried workers lacking formal job contracts, paid leave, or social security benefits.
• Most workers in India already work long hours for low wages without basic protections.

Dependency on Cheap Labour Over Innovation

• Indian industries rely on cheap labour rather than technology and innovation for competitive advantage.
• In developed countries, higher productivity is achieved through superior technology and efficient management, not excessive working hours.
• According to ILO (2024) data, the average weekly working hours were:
• 38 hours in the U.S.
• 36.6 hours in Japan
• 46.7 hours in India

Shift from Organised to Unorganised Sector

• Indian industries have shifted production from large, regulated factories to small, unregulated units to avoid labour laws.
• Over 70% of India’s manufacturing workforce (68 million in 2021-22) works in small, unregistered enterprises (less than 10 workers).
• These small units function as part of supply chains for larger firms, producing components used in various industries.

Challenges Faced by Small Firms

• Small firms supplying parts to large firms face delays in receiving payments, causing financial strain.
• They are forced to accept low prices despite rising material costs, leading to a race to the bottom in competition.
• Lack of state support, bank credit, and rising competition from imports has further weakened small businesses.

Increase in Contract-Based Employment

• Factories increasingly hire workers through contractors instead of employing them directly.
• Since 2011-12, 56% of new factory workers are contract workers, who receive lower wages and have no labour law protection.
• Migrant workers, who move from villages to cities, make up a large part of this low-wage workforce.

Declining Wage Growth vs. Rising Corporate Profits

• Migrant workers earn low wages due to social disadvantages and lack of assets or benefits.
• Meanwhile, profits in India’s factory sector rose from 31.6% in 2019-20 to 46.4% in 2021-22, especially after COVID-19.

India’s Garment Industry Struggles

• Despite abundant cheap labour, India’s garment industry has not performed well globally.
• India’s share in global garment exports has remained stagnant at 3.1% for two decades.
• Other countries like China, Bangladesh, and Vietnam have outperformed India in garment exports.
• The reluctance of Indian manufacturers to modernize and innovate has held the industry back.

Negative Impact of Cheap Labour Model

• Industries over-relying on cheap labour fail to grow in the long run.
• India’s IT sector and other industries lack innovation because businesses prefer low wages over new technology.
• Low wages reduce workers’ purchasing power, weakening the domestic market and slowing economic growth.

Conclusion

• Overworking employees harms their health and productivity.
• The short-term profits gained through cheap labour will harm industry growth in the long run.
•  Indian industry must invest in innovation and technology instead of stretching workers to their limits.

Talent shortage — global challenge, India’s opportunity

Why is it News?

• There is a serious shortage of skills in the global labor market. India has a chance to showcase its skilled workforce globally by tackling regulatory issues, skill mismatches, and recruitment problems.

Challenges and Opportunities for the Future Workforce

• The worldwide labor market is not adequately prepared for the future, as the skills required in 2030 will differ from those needed today.
• A study conducted by FICCI-KPMG predicts a global deficit of over 85.2 million skilled workers by 2030, resulting in $8.45 trillion in lost economic potential.
• This shortage poses both a challenge and an opportunity for India to provide skilled workers to international markets.
• To seize this opportunity, India must take proactive measures to ensure its workforce is well-equipped to meet this demand.

Key Global Regions with High Demand for Workforce

• The regions expected to have the highest demand for skilled workers include the Gulf Cooperation Council (GCC), Europe (including the UK), and Australia.
• Workforce shortages will vary across regions:
• - Healthcare will experience high demand globally due to aging populations.
• - Manufacturing and construction will be critical sectors for the GCC and Australia.
• - Service sector jobs will be the primary focus for Europe.
• Emerging sectors such as automation, artificial intelligence (AI), big data, predictive analytics, internet of things (IoT), blockchain, resource efficiency, and sustainability will also require skilled professionals.

Barriers to Workforce Mobility

• Regulatory and Immigration Barriers. Complex visa processes and strict work permit regulations hinder the migration of skilled workers.
• Recruitment Malpractices and Human Trafficking. Exploitation of migrant workers poses serious threats to their rights and safety, making it difficult for them to find legitimate employment.
• Policy Barriers and Skill Mismatches. Many Indian degrees, especially in fields like medicine, are not recognized globally, leading to underemployment and skill mismatches.
• Language and Cultural Barriers. Difficulties in adapting to new work environments due to language and cultural differences affect productivity and workforce efficiency.

India’s Initiatives to Tackle the Challenge

• Bilateral Agreements and Free Trade Agreements (FTAs). Agreements with GCC nations help ensure better protection for Indian workers and facilitate their migration.
• Skill Development Programs. Training programs are being implemented to align the skills of Indian workers with the needs of the international job market, enhancing their employability.
• Digital Workforce Platforms. Online recruitment systems are being developed to protect workers from fraudulent practices, particularly in GCC countries, ensuring safer migration and employment opportunities.

Strategies to Maximize India’s Global Workforce Potential

• Sector-Specific Skill Training. Training programs should focus on the specific needs of countries and emerging industries to ensure that Indian workers are equipped with the right skills for international job markets.
• Regulation of Recruitment Practices. Stricter oversight of recruitment agencies is essential to prevent worker exploitation and ensure fair treatment of migrant workers.
• Recognition of Qualifications. International cooperation is needed to ensure that Indian degrees and qualifications are recognized globally, facilitating better job opportunities for Indian workers abroad.
• Public-Private Partnerships. Collaboration between the government and private firms can enhance training programs and create more employment opportunities for skilled workers.
• Promoting Circular Migration and Mobility. Implementing temporary work visas and rotational workforce models can help address labor shortages in specific regions without causing demographic imbalances.

Changing Immigration Policies and India’s Advantage

• Evolving Immigration Policies. Immigration policies worldwide are continuously changing, with some regions tightening their rules while others remain open to skilled migration.
• Regional Variations. Europe may impose stricter immigration rules, whereas Australia continues to be more welcoming to skilled migrants. Despite rising anti-immigration sentiments in certain areas, Indian workers are generally accepted due to their skills and professionalism.
• Preventing Illegal Migration. Efforts to prevent illegal migration are crucial to protecting Indian workers from exploitation and enhancing India’s reputation as a reliable supplier of skilled labor.

Conclusion

• Establishing a strong presence in the global labor market is essential for supporting India’s vision of becoming a developed economy.
• Projections indicate that India’s GDP could reach between $6.5 to $9 trillion by 2030.
• The country’s ability to achieve the higher end of this projection depends on effectively capturing a share of the $8.45 trillion global economic opportunity presented by the skills shortage.

A new age of imperialism

Why in News?

• The global rules-based order is weakening due to shifting alliances, geopolitical realignments, and rising regional power struggles.

Challenges to the Rules-Based International Order

• The global system that governed relations between countries is under severe strain. A major turning point was when a permanent member of the Security Council violated the UN Charter by invading a neighboring country in 2022.
• The international system was built on three key principles: economic integration, collective security, and self-determination.
• The shift in support from a major global power, now echoing the aggressor’s stance, has significantly weakened the UN-based global governance structure.

Formation of the Post-World War II Global System

• After World War II, global powers decided to establish an international organization for collective security and peacekeeping.
• During 1941-1945, major powers agreed to the structure of this system through several conferences.
• In 1943, key global leaders envisioned a world order enforced by four major countries, later expanded to include another power.
• The system aimed to create a rules-based order where all states were treated equally, avoiding an outright victor’s peace.
• However, in reality, spheres of influence were recognized, allowing some powers to dominate certain regions.
• Despite flaws, the system provided predictability in international relations and promoted principles of sovereign equality.

Disruptions to the Global Order

• Recent policy shifts by a global leader have weakened international agreements and disrupted economic cooperation.
• Withdrawal from major global agreements and organizations has undermined established international norms.
• Unilateral trade actions have thrown the global trading system into uncertainty.
• A shift toward nationalist foreign policies and economic interests has further destabilized the system.

Repercussions for Global Security

• A major realignment in global alliances has occurred, with renewed diplomatic ties between two key powers.
• The approach to the ongoing conflict in Eastern Europe has changed, sidelining the affected country in peace negotiations.
• A shift in alliances is forcing European nations to take responsibility for their own security.
• Recent diplomatic discussions resemble past agreements where powerful nations divided influence over different regions.

Impact on Global Power Dynamics

• The shift in global leadership signals a return to might-based diplomacy, rather than rule-based cooperation.
• There are concerns that a new imperialist era may be emerging, with large powers expanding influence.
• The world appears to be dividing into regional spheres of influence, with different powers controlling specific regions.
• A major Asian power, which has supported ongoing conflicts indirectly, now faces fewer restrictions.

Implications for India and Regional Stability

• The security situation in East and Southeast Asia is increasingly uncertain, especially regarding territorial claims.
• A major shift in security commitments from a global power may encourage aggressive actions in the region.
• India must prepare for a more uncertain geopolitical environment, especially concerning longstanding territorial disputes.
• The erosion of the rules-based global order means smaller nations must navigate an unstable and unpredictable international landscape.