Indra’s Drishtikona (Viewpoint)

Unemployment - some views/ some myths

Posted : May 27, 2004 at 10:22 am [IST]

Unemployment was the topmost issue in the last election. And the campaign pointing the fingers at the ruling government for the cause got attention. The surveys by INDIA TODAY (May 3) as well as OUTLOOK (May 10) identified unemployment as the most critical issue by the people interviewed. Unemployment was also the most important issue bothering 64% of the youths (18-24 years) of the country. Educational facilities ranked poor second with only11% of the youth going for it. Again as the most important issue which the country needs to address, unemployment was at top with 36% of the respondents. Corruption was second (with 15 %). Similar were the findings of other surveys also. Naturally unemployment must be considered as a threat for the turbulence in the society at large.

How serious is the problem of unemployment? According to our Ministry of Finance, India has a labour force of about 407 million. Total employment stands at 397 million. However, the employment in organized sector constitutes only 7%. The employment in the organised sector is showing negative growth because of right sizing exercises undertaken to improve labour productivity to a competitively better position. So is the case in agriculture sector. But as a good news, the employment in service sectors is on a good increase path. Retail chains, fast food outlets, travel and hospitality businesses, and banks, insurance firms and tele-componies employ around 44 million people, mostly in front line sales functions. It is providing good entry employment to youth in 20-30 age group, that constitutes about 60-85% of the total employment in these sectors. Further, most of these young boys and girls are from rural background and lower middle class family.

What is unemployment rather what is employment? At least for many employment means some cozy engagement in government job (with oopari aamdani), or in some big private enterprises with a graded salary with some fixed increments annually and a lot of benefits including the right of not working under the safety umbrella of trade unions. Perhaps some one is employed, if he is engaged for a certain minimum number of days in a year regularly.

Now, a farmer’s son inherits some agriculture land well enough to sustain the family may call and register himself as unemployed. He does not like farming as employment. He gives his land to someone for contract farming and seeks employment and comes under unemployed category. Even in villages, the ladies of some communities do not work at all. Can their engagement at home bring them in employed category? But no one considers them unemployed. Even a small entrepreneur or self employed person such as a vegetable vendor or a grocery shop owner, considers himself unemployed unless his earning is pretty high. Our tax net is not good enough to find out these so called unemployed people.

The National Employment Bureau with its employment exchanges numbering about 1000 across the country does not have real reliable data on unemployment. It is hardly effective. It placed only 1.61 laky individuals in 2003 (almost 10000 less than the placements done in 2002), when private recruitments companies found jobs for 3.5 lakh individuals in2003 and expect to improve the number by 25% in 2004. Further, there is hardly any credible and regular method of tracking jobs in agriculture and service sector that employ the maximum number. Then, what is the actual status of employment presently. As they say, on average, a new restaurant opens every week in Delhi and Mumbai alone. Each restaurant provides employment to a dozen individuals. The auto industry estimates that 20-30% of all new cars buyers hire a driver. So with a million cars this year, 2.5 to3 lakh new jobs will be created. So will be the case with the large number of commercial vehicles sold. Employment per commercial vehicle is much higher. We see booming housing construction all over the country even in smaller towns and naturally all the cities. With an estimate of an employment of 5 persons per flat for a year, the employment figure will be impressive. Again per flat on an average one person is employed to help the household on permanent basis. As per a study, the construction of 1 million housing units per year has the potential to create additional 5 million direct and 7.5 million indirect jobs. Naturally most of the employments go to rural population- unskilled or semiskilled. National Highways development Programme alone is claimed to generate employment for 2,50,000 persons (skilled and unskilled) and for 10,000 technical supervisors per day. A larger employment possibility exits in river linking projects or a massive irrigation canals projects as indicated by the new Andhra Pradesh government. However, it is for sure that the rural population will have to move out from their root which should not be a problem if employment is required. If the other government programme such as Jawahar Rojgar Jojna and Food for work programme are intergrated in national projects such as Grameen Sarak Yojana etc, the employment created can be better utilised.. Unemployment can be tackled if there is a political will.

One thing is but sure. Unless some new thinking in our business models is brought for villages, the rural employment is bound to reduce with mechanisation that is coming in not as policy but as necessity. The irrigation will be through pumps and not through Persian wheels. Ploughing will be through tractors with no bullocks and labour force required. Harvesting will also be mechanised. And it is already happening even in villages of Bihar that is considered backward. New avenues of employment will have to be created. One such idea is to allow outsourcing of apparel manufacturing or knitting to go to villages. Women in villages are having these skills by birth. It will require only some training and fine tuning to come up to the expected quality standard. Other drastic change will mean the direct supply of village produce such as rice, wheat flour, cereals, or vegetables to customers. It will mean grinding of wheat or making rice and pack them properly for direct supply to users. But it will be effectively possibly when these villages are connected with good road and regular electricity is made available. Similarly, switch over from regular paddy/wheat crops to oil seeds, vegetables and fruits, some food processing units or milk dairy, sericulture etc. can sustain the village population in village.

Another area of improvement is in rural housing sector. Our architects can come out with an effective, cost effective and functional rural house design. And banks as well as government provide the incentive to make the schemes popular for the middle class in villages who are quite rich. It will have a great employment potential for the rural population. However, certain reorientation of the mind set of the rural population will be necessary. It can come with education and training. Land holders and some people required for that work will stay back. Others particularly unskilled as well as educated population will move to the places where there will be work. Even if with manual unskilled work available in rural areas, they may like to move to different places. I saw groups of young men from distant Jharkhand working on a road building project in Uttaranchal en route to Badrinath last year. Local population is not ready for that manual work. Again other religion and caste based dogmas is to die. People must appreciate that self employment is better than normally sought after clerical or assistants’ jobs in government offices. More over, that will not be there any more. No chaprasi and typists or filing clerks will be any more needed because of computers.

However, the task ahead is quite difficult. By 2012, the total labour force is expected to touch 562 million and unemployment will stand at 25 million. A correct assessment of the category wise demand of human resources is essential. The supply is to be regulated to take care of the demand. To make the point clear, if the local as well as global demand shows the need for more nurses, teachers, and persons with knowledge of different foreign languages (other than English), our supply must provide for the same through a change in the course of education. It is a difficult game but not impossible to win to bring India ahead of the others.

- Indra

Category: Employment/Education |