New Delhi: Share of labour intensive items like textile and leather in total exports have gone down in the last decade despite the government’s often repeated claims of boosting employment growth through external trade.
“Share of Indian leather and leather products slipped from 18.2% in 1990 to 6.8% in 2003. The share of textile yarn and fabrics, which had increased from 2.1% in 1990 to 3.6% in 2000, remained stagnant in 2002 and 2003,” said a report by National Council for Applied Economic Research (NCAER).
Within the textile sector, share of ready made garments had increased from 2.3% in 1990 to 3.5% in 2000, but subsequently declined to 2.9% in 2002 and 2.8% in 2003.
“Thus, it is clear that India has missed taking advantage of its abundant factors: production and labour. The shadow of old efficiency — disabling industrial policies and reservation for small scale industry continue to undermine the much vaunted gains in India’s manufacturing sector,” NCAER said.
However, the export performance of high-technology manufactured goods has been improving. The share of chemical and chemical products in total exports has increased from 15.5% in 1998-99 to 20.5% in 2004-05 and 20.2% in 2005-06.
The engineering goods also improved their contribution from 17.3% in 1998-99 to 30% in 2005-06.
The report said the resources were not getting allocated to relatively labour intensive sectors of manufacturing due to poor physical infrastructure, labour laws and lack of efficient exit policy for the firms. “India is still waiting for a blue collar manufacturing revolution,” it said.