- Government’s responsibility to ensure better life for citizens
Sector by sector, the news is not good. The auto industry has joined the construction and textile sectors in laying off employees. The PTI government came to office making claims that it would create so many new jobs that the apparently insatiable demand for new jobs by a rapidly growing population, would be satisfied. One of the claims made by it was that it would give the construction industry a major fillip by building a huge number of new housing units. It was predicted that the ripple effect of putting spending money in the pockets of those employed by this industry, would create new jobs aplenty in all other sectors. Not only has that not happened, but the sector has been hit by currency devaluation, which has increased the price of all imported inputs, mostly steel girders (locally made, but from imported ore) and fittings and fixtures. There has also been an increase in taxation. The same factors have affected the textile industry, which is not just a major employer, but also the country’s main exporter. It may be noted that the massive devaluation has failed to achieve any improvement in exports.
However, the auto industry is joining the rising chorus of voices complaining of the havoc wreaked by devaluation. Sales have been falling, down 7 percent in the last financial year, and expected by experts to go down 15-20 percent this year. Thus far, the main decline has been in cars above 1300 cc, forcing manufacturers to cut back production, with factories temporarily closing or cutting back on production.
While there are 10,000 direct jobs, there are also 120,000 people employed by auto vendors, while there are about 350,000 to 400,000 jobs in the industry as a whole. Vendors have begun switching to single-shift production, as they fight to keep jobs. Let alone new jobs being created, these jobs are all at stake, for the industry cannot revive without increasing sales, which is not likely without lowering prices, which have gone up because of both rupee depreciation and increased taxation. The PTI government should not think that its economic responsibilities have been fulfilled by signing the IMF agreement. It has a responsibility to the citizen also, to follow policies that lead to a better life for citizens, rather than to satisfy an international financial institution that has a track record of fomenting economic disaster.