Where Are The Future Jobs?

Questions are already being raised on the City’s growth prospects, as the IT and IT-Enabled Services, that contribute a lot to Gurgaon’s economy are slowing down across the globe. New job creation has almost come to a standstill, expansions are unheard of, and not many new companies have set up shop in Gurgaon recently, aver industry watchers. The BPO and the outsourcing sector have also been severely hit by the rising real estate prices, and are thus moving out to Tier II and III cities. To top it all is the labour unrest in Maruti, and the decisions by many auto majors and their ancillaries to expand outside Gurgaon.

The one big hope for the Millennium City, in this fairly dismal scenario, point out industry watchers, is the manufacturing sector – particularly in the industrial belt coming up in and around Manesar, and along the Kundli Manesar Palwal (KMP) Expressway.  IMT, Manesar is spread over 3,500 acres, and comprises nearly 2,200 industrial plots. It is jobs that will fuel the growth, and they can best come through industrialisation. The government needs to support the industry, says Amina Sherwani, Founder and life member of the Manesar Industrial Welfare Association (MIWA). But unfortunately the support and help from government, represented by HSIIDC, is not coming, she alleges.

On November 30, the Association held a bandh, to protest the poor infrastructure and facilities in the industrial township, as also financial enhancements, demanded from the industrialists.  The issue of enhancement pertains to the plots located in Phase 1, comprising 1746 acres. Sources however say that, alarmed by this demand  of the HSIIDC, even majors like Maruti have approached the Supreme Court, and requested that they may be impleaded as a party in the case. Unit owners say that labour, power, transport and water are the backbone of an industrial area, and all these are in poor supply in the Industrial township of Manesar – that is being showcased as the leading destination for business in the State. Power supply is 8 to 10 hours daily; water has to be bought from external sources; and internal public transport is non-existent. The villages around which this township have come up have been marginalised into concrete slums where living conditions are very bad, admits Sherwani. “The children are sexually abused, education is non-existent, and women are always scared of the miscreants. This is not an ideal situation for industry to work, and for labour to survive,” she says.

Manoj Tyagi, President of IMT Manesar Industries Association (MIA), says that big announcements, like setting up of a proposed Convention Centre, industrial parks along the KMP Expressway, and the freight corridor, will take a long time to come – if they ever do.“Right now commuting between Delhi, Gurgaon and Manesar is in itself a major project that torments the travellers daily – with traffic jams, waterlogging, and toll plazas being a major headache,” says Tyagi. Even finding workforce for the existing units is difficult, he says.

Both MIWA and MIA allege that HSIIDC has amassed a large amount of money by auctioning more land than is allowed as per norms. They say the agency has violated the 55 per cent norm of the Haryana Development and Regulation of Urban Areas Act, 1975. As per the rules, developers can use only 55 per cent land of the land for developing utilities like roads, drainage, parks, green belts, among others; and is further extendable, up to 10 per cent, if permission comes from the TCP.

Colonel A.K Chawla says that the main reason behind the failing township is that it has become too big and complicated, and the expertise and resources needed to run it are not available. Another important reason, he says, is that India has mainly been a trading country, with no real emphasis on manufacturing. “We do not have a manufacturing culture. It is almost a mission to be an industrialist here,” he says. A number of unit owners also support his contention. They allege that 70 per cent of the industrial plots in Manesar, particularly those between 450 metres to 1000 metres, are actually owned by property dealers, bureaucrats, politicians and their henchmen!

S.K Jain, an industrialist since 1967, rues the day when he decided to set shop in Manesar. “Only 500 to 600 units are operational in this industrial area that has 2,200 plots. The majority of the plots are empty because they are held by speculators,” says Jain. HSIIDC, instead of helping the industry, is busy forming and implementing policies that are suicidal for business. The announcements made regularly by the government are just facades to boost the price of real estate, and nothing else, say observers.

“This is a government of property dealers, and for property dealers,” Sherwani asserts. “Industrial plots have become a trading commodity, with virtually no output. It is due to such situations that manufacturing in India is losing its edge against the Chinese,” says Jain, adding that foreign investments will not cure the rot.

The latest pollution norms approved by the Haryana government have further acted as a red herring. An industrialist says that no thought has been given to what is required by the industry, as this is a bureaucracy-driven exercise. “In Manesar, units even with a green tag are forced to pay fees, and follow norms from which they are exempt,” says an owner.

Pointing to the lack of support from the government agency, Jain says that HSIIDC had promised that if their units came into production within the appointed time, they would be given 25 per cent concession in the cost of the plot. But this did not happen in the majority of cases, as red tape ensured that benefits were not given to them, he alleges.

Bureaucratic legalese and inspector raj is what further pains the industry. Amina Sherwani says that small and medium enterprises care for the labour and their welfare, as they are the backbone of industry. “We want to do good, but the labour department, pollution, EPF, ESI and others smother the good intention with red tape. Their only goal is to make more money by hard pressing the unit owners,” she alleges.

In such a scenario it is worthless to hope that the industry in Manesar and the adjoining areas will be able to become the engine of growth for Gurgaon, opines Rajesh Gupta, an industrialist. “HSIIDC has done nothing for the accommodation of labourers; the plots meant for them were sold out to the builders. There are no conveniences for thousands of men and women working in the belt. Canteen facilities are non-existent,” says Gupta.

All hope is however not lost, as Sherwani says that if the government joins hands with them, then Manesar could still come good. “Almost 2.5 lakh jobs are possible if HSIIDC gets its policies and execution right,” she adds.

However, currently finding themselves in a mess due to the lack of facilities and infrastructure, a number of unit owners are planning to shift from Manesar. A unit owner, preferring anonymity, says that he is building a factory in adjoining Rajasthan, despite the fact that plots are available in Manesar at low rentals. “I do not want to stay here because the growth prospects are dismal,” he says. Gupta is also setting up his next factory in Himachal. The conditions in Manesar are such that finding labour is becoming tougher by the day. The rentals for labour housing are rising, the traffic on the Gurgaon Delhi Expressway makes it difficult for the executives to commute, and during the rainy season it is almost a nightmare, he says.

Jagdish Kukreja, General Secretary of MIWA, says that  most of the industrialists have taken loans, and they have been hit hard by the HSIIDC imposed enhancements. Both MIWA and IMT Association, led by Tyagi, have decided to approach the court to get justice – although separately.

Vikash Gupta, an industrialist based in Manesar, says that there is no hope for small players if the enhancements are not revised. The government should realise that the economy is in recession, business is tough to get, and competition is overwhelming. In such a scenario they need to support us. Kamal Sehgal, a leather exporter, says that apart from poor infrastructure, the security and safety of both labour and executives is a major headache for the industry. “The day salary is distributed there are incidents of snatching and hold ups. We had come here thinking that there would be peace of mind, but that hope has been shattered,” he says, while participating in the rally organised to protest against the government.

Sanjay Bansal, an exporter, says that owing to labour issues, rising cost, and now enhancement, the viability of Manesar as an industrial destination is under threat. “Survival is becoming difficult,” he says.

The immediate demand of the industry is to set up a township for the labour, with good facilities for education and entertainment; ensure regular power; set up an industrial hardware market; arrange training and development programmes for the executives; and provide easier finance to run their business. Jain alleges that the Chief Minister seems to be against the small and medium industry. “The government wants only  large multinationals to rule in Haryana, and all the Plans are made accordingly,” he adds.

It is obvious that rising costs, shortage of labour, and poor business environment is  throttling business in Manesar. Industry alleges that appointments in Manesar are considered to be a cream posting, as there are huge ‘incentives’. “Nothing moves here without the permission of HSIIDC. No files can be pushed, no permissions obtained. To get a power connection the going rate is Rs. 2,000 per KW, and this is after one has fulfilled all norms,” alleges a unit owner.

Looking at the present scenario and the past record of the government, it is unlikely that infrastructure projects in Gurgaon will be delivered soon. As such it would be unrealistic to expect that the KMP Expressway, the freight corridor and the rail projects are going to help the industry or the economy of the City in the near future. To overcome the deficiencies, a facilitating environment is needed, says Chawla, who wants the government to stop interference and let industrialists run the township. HSIIDC is only a developer, and should give up maintenance to the unit owners. “We have the will and ability to not only run our industries but take on the Chinese juggernaut, create jobs and grow the economy. Support us and see the results,” he tells the government. But is the Chief Minister listening? 

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