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People And Their
Problems
New Delhi, 16 June 2007
Effective
Employment Policy
STRESSING STATE’S
RESPONSIBILITY
By T.D. Jagadesan
The Centre evidently keen on imparting a fillip to
employment opportunities to the eligible people. Hence it has wisely launched
recently the National Rural Employment Guarantee Scheme (NREG) in 200 districts
covering 23 States. The NREG was notified in February last year thus
underlining the importance as well as expediency of securing the livelihood of
the people in rural areas by generating 100 days of employment in a financial
year to rural household.
There is justifiable jubilation over the eight per cent plus
growth that the economy has been recording for over three years and at the same
time there is concern that there are significant sections of the population
that are yet to benefit from the growth process.
The Eleventh Plan document attempts to address
this issue squarely.
There is concern that the rate of growth of employment is
reported to have slackened, in many segments of the rural economy, during the
decade of reforms. The report of the Planning Commission’s
Task Force on Employment Opportunities shows an absolute decline in the number
employed in agriculture, between 1993-94, and 1999-2000, at the all-India level.
Information from 60th NSS round, 2004-05, the Economic Census 2005
and the Annual Survey of Industry indicate the following:
Employment growth accelerated to 2.6 per cent during
1999-2005 outpacing population growth, but the average daily status unemployment
rate, which had increased from 6.1 per cent in 1993-94 to 7.3 per cent in
1999-2000, increased further to 8.3 per cent in 2004-05. This was possibly
due to the fact that the working age population grew faster than total
population and labour force participation rates increased, particularly among
women. The extent of under employment also appears to be on the increase.
Agricultural employments has increased at less than 1 per cent per annum, slower than population
and much slower than non-agricultural employment. Also, although real wages of
these workers continue to rise, growth has decelerated strongly, almost
certainly reflecting the poor performance in agriculture. There are also transition problems in
changing employment patterns, and these are probably being exacerbated by our
landholding structures and by barriers of caste and gender.
Non-agricultural employment expanded robustly at an annual
rate of 4.7 per cent during 1999-2005 but this growth was entirely in the
unorganized sector and mainly in low productivity employment. Employment in the organized sectors actually
declined despite fairly healthy GDP growth.
On the supply side, the document indicates that the during
11th Plan if it grows at the same rate as current projections around
65 million, if female participation rates rise at the pace observed during
1999-2005. Additional employment opportunities in the future would be generated
mainly in the services and manufacturing sectors and policy initiatives are
needed to support this.
The intention in the Eleventh Plan is to boost, in
particular, labour intensive manufacturing sectors such as food processing, leather products, footwear and textiles, and
service sectors such as tourism and construction. Construction sector would generate
substantial additional employment.
On the touring front both domestic as well as international,
there are large possibilities for
employment generation in the hotel, catering, entertainment and travel sectors
as well as a market for handlooms and handicrafts.
Sadly, the solutions attempted in the Eleventh Plan document
do not address these problems. There
are anecdotal reports about severe shortages in skilled labour markets---in IT,
tourism, and in skilled blue collar workers for manufacturing as well as for
the construction industry. There are tales that textile export manufacturers
are scouring the villages near Tirupur in Tamil Nadu for skilled tailors and
embroider; that masons command the sky to wages and that ordinary skills are
unavailable. Surely it is important to address
the problem fro this end.
The Manufacturing Competitiveness
Commission has estimated the need
for skilled labour in over two dozen different professions,
each of which exceeds a quarter million in the next five years. The training
levels required to produce these employable are not available. Major IT firms
complain that they are able to recruit from only ten per cent of the
engineering colleges.
The manufacturing industry reports that the skill sets
produced in the ITI are obsolete for the current markets. There is little
attempt to infuse technology into agriculture, and even the downstream part of
agriculture, storage, marketing and retailing, ahs been left to the private
sector.
The Eleventh Plan document fails to address these issues,
and in fact relies heavily on the service sector and the unorganized sector
including the construction sector to pick up the slack. Wishful thinking,
without any evidence of how this will happen. Ab initio, the target growth of Agriculture
of 4 per cent and of the entire economy of double that would leave those in
agriculture poorer off at the end of the Plan. If poverty is added to
unemployment, then it is likely to be a volatile combination.
In considering options for rural areas, it is important to
recognize that short term focused policy of persistently protecting employment
in sunset industries and in weaker economic units can go against greater
employment with higher labour-productivity in the longer term. Competition restricting
policies, including controls to the movement of goods and commodities must end,
as they impose arbitrary restrictions on expansion liberalization is the key to
making industry competitive.
The responsibility of the state is to ensure that the necessary skill sets are developed. This is easier said
than done, since the task is to match market needs with the supply of skills,
to reorient curriculum to retain teachers, add capital equipments for training,
develop new syllabai, and in short, to revamp the entire supply chain of
production of skills.
This is needed to be done in hundred of skills, ranging from
it is to nursing, from tourism to hospitality, from ward boys to
radiographers. There is very little
evidence in the Plan document of the mammoth task involved, nor of the
resources and inter-ministerial efforts that would be needed to make this
happen. If these skill sets are not
developed, it is quite conceivable that manufacturing competitiveness may be lost, that instead of making steel in India,
corporates attempt to invest capital outside the country, and in fact seek
competitive skills elsewhere, at the cost of local employment. ---INFA
(Copyright,
India News and Feature Alliance)
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