Labour shortage, wage increases and loss of confirmed orders are hitting industry hard, says a survey by Federation of Indian Chambers of Commerce of India (FICCI).

If this were not enough, the UPA Government's flagship rural job scheme, MGNREGA, is adding to industry's labour woes by luring away casual workers, it adds.

The survey, which found the impact of Mahatma Gandhi National Rural Employment Guarantee ‘lumpy' across States and industry, called for some changes in the scheme.

It suggested that the scheme be implemented during non-peak agricultural season only. Work done in industrial units could also be considered for coverage under MGNREGA, especially in areas where there is concentration of industrial activity, it says.

Also, hiring workers from within a State should not be made mandatory, the industry chamber adds.

Nearly two-thirds of the respondent firms said that their potential losses due to labour shortage stood at over 10 per cent of their demand. A majority, 82 per cent, also said that there was upward pressure on wages by more than 10 per cent.

The MGNREGA, by opening an alternative employment avenue for casual labour, has compounded our problems, the industry chamber said.

The survey found that sectors such as manufacturing, automotive, construction, food processing, etc were getting adversely impacted by MGNREGA. Region-wise, the West and South were impacted the most.

The survey used the Herfindahl Index (a statistical measure of concentration) to assess the impact of MGNREGA across States and industry.

It drew responses from about 10 associations and over 100 companies, 40 per cent of which were from the Western region, 37 per cent from the South and 12 and 11 per cent, respectively, from the Northern and Eastern regions.

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