Global capital, local labour

In the months following his rise to power, India's Prime Minister Narendra Modi has repeatedly touted the importance of manufacturing to different audiences. Recently, Modi has talked about manufacturing as a way to bolster the health sector and has called on ministries to review and reduce "inessential imports". Earlier in his Independence Day speech, Modi traversed a variety of topics, from nationalism to women's security to endorsing public-private partnership while also making sure to emphasise the importance of increasing domestic manufacturing. A substantial portion of the speech, which was delivered with some striking theatrics from the grounds of Red Fort in Delhi, endorsed the idea of manufacturing as a form of national service and a solution to tackle both the trade deficit and the burgeoning problem of unemployment.

While the prime minister has presented a slick take on increasing manufacturing output with a renewed message of "Make in India", the emphasis on boosting manufacturing with foreign capital has received attention ever since the limitations of a service-based economy have become glaringly apparent during the last decade. Concerns regarding the underperformance of the manufacturing sector in India received significant mention in both the Economic Survey 2013-14 and the Union Budget 2014-15. The chapter in the Economic Survey on 'Industrial Performance' mentions that "In addition to slowdown in fixed investment, several domestic and external factors such as higher interest, infrastructure bottlenecks, inflationary pressure leading to rising input costs, drop in domestic and external demand for some sectors have together contributed to low growth in the manufacturing sector." Among the global and local factors listed as reasons for the underperformance in manufacturing, none had to do with the hampering of production due to labour or lack of productivity of labour itself. In fact, the latest Union Budget reported a massive drop in organised labour strikes from 421 in 2008, to 181 at the end of year 2013 (based on provisional data). In spite of this, the need for the simplification and, to a great extent, repeal of labour laws has been presented at various forums as one of the most crucial steps for attracting global capital to boost manufacturing. The arguments made in favour of 'reforming' labour laws require systematic analysis and critique.