BY MELBA MERGULHÃO-CARVALHO ANTÃO

It has been reported that 15,000 workers are facing retrenchment both in private and public sectors while a labour force of 1,500 have already lost their jobs both in the big and small scale industries.

THE GLOBAL financial collapse is taking its toll across the western world with massive shutdowns in every segment of industry. Though India is not totally reeling under the impact, tremors are being felt nevertheless. As a domino effect, Goa too is facing unrest in the labour force especially in the industrial estates where several units are experiencing a fall in production - like Jimcap Electronics and BETS who have slashed production of capacitors and collapsible tubes respectively and laid off non-permanent staff. Large industrial houses are cost cutting and scrutinising their order books and pink slips are kept in readiness. The strongman of Goa trade unions, Christopher Fonseca claims that nearly 15,000 workers are facing retrenchment both in private and public sectors while a labour force of 1,500 have already lost their jobs both in the big and small scale industries. According to the Minister for Labour, 538 persons were terminated during the last six months - 165 contract workers, 195 direct employees and 178 direct workers from IFB Ltd, Verna, Intergold (I) Pvt Ltd, Pilerne and Goa Formulation Ltd, Honda, Sattari, respectively. Intergold (I) Pvt Ltd, closed down because of financial crises and non-availability of orders for finished products from the market, while Goa Formulation shut shop due to uneconomic working conditions, low productivity, financial losses and non-fulfillment of orders.

PRODUCTION DOWN

THE Automobile Corporation of Goa Limited (ACGL) has temporarily shut down one of its plants in north Goa, and around 1000 contractual workers have been terminated due to reduction in demand in the auto sector. The company is a bread-earning source for many people from Bhuipal, Sattari and surrounding areas and shut down due to reduction in demand for sheet metal pressings and bus bodies. Almost 150 contractual labourers are working on the machine floor at the Sheet Metal Division in Plant I and 375 operators now fear the axe may fall on them too. The meltdown has also affected the blue collar workers in ACGL as their working days have been reduced from six days to thrice a week though the confirmed workers are still receiving full payment with a deduction in paid leave.

While the price of construction steel has come down drastically, so has the price of inputs and Steel Rolling Mills (SRMs) are able to subsist because the demand for their product has not fallen steeply. Even with the selling price falling by 35%, the SRMs are able to sell their products albeit at a lesser profit margin. U.V. Kini, company secretary, Marmagoa Steel Ltd, (MSL), Vasco, disclaims that “SRMs per se are not polluting units. Polluting industries are those with steel melting furnaces which have not installed proper pollution control equipments which meet the standards set by the Pollution Control Boards.” He clarifies that Marmagoa Steel Ltd (MSL) is the only composite steel unit in Goa which does not manufacture construction steel - its products being alloy steel billets, flats and rounds with supplies to the auto industry, railways and defence, forming the bulk of its sales. But the auto industry, the world over, is going through a very bad slump and auto producers abroad like General Motors, Ford, Toyota and Leyland and Tata in India, have drastically cut down production levels. The sale of MSL’s products has thus been adversely effected, resulting in shutting down production for the larger part of each month during the last four months and is struggling to stay afloat during these turbulent times. The livelihood of about 600 direct and indirect workers and about 3000 families, from in and around Margao and the neighbouring villages, is dependent upon the survival of MSL. “MSL has been hit hard by this slump firstly with the selling price falling by about 50% and more importantly the order position falling by about 75%,” elucidates Kini and adds that the opposition from locals to setting up industrial units will only adversely effect the generation of employment in the state which is suicidal in a recessionary economy.

GCCI SUPPORT

WHEN contacted, the Goa Chamber of Commerce and Industry (GCCI) had no specific figures of loss of employment or closures of companies, but admits most of the units in the industrial estate have cut down production due to shrinking export orders from companies in the hard-hit countries of the West and due to a fall in the national demand for components and finished products due to recession, which is slowly but steadily making itself felt in Goa too.
To tide over this difficult phase, last year GCCI organised an Industrial Credit Facilitation Programme consisting of entrepreneurs, industrialists and major banks (like BOI, SBI, EDC, IDBI, etc.) at which the bankers promised cooperation with industry in this time of crisis. GCCI is collecting data from individual industries to understand the difficulties and find ways to augment this difficult period.

As far as minimum wages goes, GCCI advises the government, though they sympathise with the struggles of the work force, “Forcing a wage increase on the industries at this difficult juncture, could result in closure of some more industries.” GCCI cautions that in the future, Goa’s employment problem could become huge not just because of global recession but because of the withdrawal of the tax incentives in March 2004 resulting in a decline in industrial investment whereas incentives given by the north-eastern states has resulted in more investments which would otherwise have entered Goa. Another major cause for lack of new companies entering Goa is the blanket ban on SEZs by the people of Goa. Banning SEZs arbitrarily will prove costly for Goa as more young Goan men and women will be forced to seek jobs in neighbouring State and foreign countries resulting in a brain drain with only Class IV locals forming part of the work force while migrants fill the vacuum created by migration of locals who find no posts locally in spite of their qualifications and skills. Therefore, as suggested by GCCI, 2-3 SEZS, which are eco-friendly, are very essential for Goa to stem migration of skilled locals in search of challenging careers outside. Company secretary, Marmagao Steel Ltd, Vasco concurs that, “SEZs contribute to the economic development of a region if regulated properly. Goa being a small state, we feel that two SEZs, one in the north and one in the south, would be adequate and ideal. Moreover, only eco-friendly industries like IT, pharma, bio-technology, etc should be permitted inside SEZs.” Goa should not close its gates to eco-friendly industries that would create more career options for the local youth who graduate, in thousands, each year from our professional colleges and even the state university.

IT COMEBACK

MANGUIRISH Raikar, vice-president GCCI, reiterates, “Only those units, who have faced cancellation of export orders, are affected by the meltdown while other establishments in Goa are on track.” According to him, “India is a consumption market and will not be affected like the western world has been by the onslaught of recession. Secondly, India’s exports, compared to the world export, are hardlyone percent because the US and UK are not our backyards as they are for China. But, luxury items like gems and jewellery may be affected to some extent,” since they often cater to the export market. Raikar firmly believes that “our IT services will be more in demand where conditions for resurrection of companies, is the order of the day. IT services are going to play a major role in getting bankrupt financial services back on the track, while tracking and recovery, especially mortgages, will also be helped through the IT services.”

There is a tremendous downscaling of orders from developed countries like the USA, UK and France and “they will need to be fine tuned in different segments, e.g., inventories, pruning of financial dispositions, etc., and for all this IT services will be required in the western world. For stimulation of the industrial sector, the IT service sector would be playing a very major role,” points out Raikar.
How does one explain the large scale ‘on the bench’ scenario in Indian software giants? Raikar is confident that “business is growing in the IT sector, because of the downfall of financial institutions, like Lehman Brothers, Amerian Express, etc, and in order to re-format them to put them back on their feet, they would require IT services in large numbers and India is definitely going to get a major share in this process,” Across India, IT industries has slashed recruitment by 75% but Raikar assures us that, “They are only playing safe because if ten workers are required, only eight are taken in. Recruitment will take place but in phases. The sluggishness in the IT industry will bounce back in three months. While the other segments will take more time - may be 1-2 years.” Raikar also believes that “Casual labour on contract is facing retrenchment in Goa as a move to minimise costs and cost cutting is not essentially layoffs!”

The largest provider of contract labour to industrial estates across Goa, Pradeep Shet asserts that the job scenario is bleak in Goa whatever the industry pundits may claim. We understand that production orders are less by 30% in all sectors while tourism figures for 2008 are in the red with vacant rooms and deserted shacks though hospitality pundits claim that business has picked up at year-end and during the long Republic Day weekend. Marpol, a paint manufacture, suffered loss of business and relieved its labour. Many workers from Orissa, UP and Jharkhand returned home; while Nestle at Usgao has retrenched temporary workers (between the age group of 19-29 years) of which 20% are Goans.

REVERSE EMIGRATION

THERE is a large segment of emigrants across the Western world and the middle-east and Goa will be challenged by a reverse emigration of sons of the soil. Though the industry has woken up to the impact of recession and has taken precautionary action of drastic cost-cutting, mass entrenchment has not yet started, only contract labour is being laid off beginning with the mines that packed off non-permanent staff followed by AGCL in Sattari. Cipla has cut down on production because of non-receipt of payment from its foreign clients. The MNCs are facing their worst scenario case options. On the whole, industrial pundits proclaim the industrial scene in Goa is very frightening. And with over 10,000 Goans who are still holding on to their IT or other professional jobs in the neighbouring states, the West or the Gulf, may soon return home and enroll themselves in the Employment Exchange of Goa!