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VIEWPOINT: KAUTILYA
McJobs Are Expanding
The latest
employment survey throws up both disquieting and encouraging trends.
By Jairam Ramesh
 Hardly
has the dust settled on the controversy over poverty numbers in the 1990s
generated by the surveys of the Central government's National Sample Survey
Organisation (NSSO) than the agency's numbers on unemployment are kicking
up a storm.
The census done once every 10 years provides
reliable data on employment. But the NSSO surveys carried out once every
five years are the ones that are more frequently used. The NSSO's most
recent survey was for July 1999 to June 2000. The first detailed analysis
of the survey's data has been done by India's pre-eminent scholar on employment
K. Sundaram of the Delhi School of Economics and was published in the
Economic and Political Weekly three weeks back. His main conclusions are
that in the 1990s:
# using the most comprehensive measure, the
overall unemployment rate-that is, proportion of the labour force unemployed-worsened;
 #
worker-population ratios -that is, the proportion of the population which
is working-reduced sharply, implying that the labour force's growth rate
was lower than the population's growth rate.
# age-specific worker-population ratios also
fell considerably in the 5-9, 10-14, 15-19 and 20-24 age groups, indicating
that school and college enrolment is up in substantial measure;
# for the first time since Independence, the
absolute number of workers in agriculture declined, although its share
in total employment is just below 60 per cent;
# barring construction, labour productivity
grew significantly, translating into a growth of over 3.2-3.6 per cent
a year in average inflation-adjusted wage earnings per worker both in
urban and rural India;
# two sectors, (i) construction and (ii) trade,
hotels and restaurants, increased their respective shares in the workforce
with the latter emerging as the third largest employer, after agriculture
and manufacturing.
In India, there is an inverse relationship between
poverty and unemployment. The poorest states-Bihar, Uttar Pradesh, Rajasthan
and Madhya Pradesh-have the lowest unemployment rates while the relatively
better-off and unionised states like Kerala, Tamil Nadu and West Bengal
have the highest unemployment rates. This is not surprising for two reasons.
First, the poor just cannot afford to remain unemployed for long. Second,
the more educated you are, the more choosy you get about the type of employment
you want.
Undoubtedly, we can expect to see Sundaram giving
more insights as he engages himself in more data-bashing, particularly
at the state-level. In addition, the Centre's Task Force on Employment
chaired by Planning Commission member Montek Singh Ahluwalia is expected
to submit its report by the end of this month. Given the intellectual
prowess of its chairman, the task force's report would definitely be authoritative
and will certainly generate much discussion. What it has to say on organised-sector
employment will be of special significance. These are jobs that are sought
after by all but actually gained by a tiny few-only 7 to 8 per cent of
total employment in India is in the organised sector but the pay, privileges
and perquisites of this minuscule minority occupies centre-stage of policy
and politics.
The task force's calculations reveal that organised-sector
employment grew by 1.59 per cent per year in the 1980s but fell steeply
to 0.86 per cent between 1991 and 1997. The task force attributes this
deceleration to the sharp fall in the growth rate in public-sector employment
from 2.22 per cent in the 1980s to 0.38 per cent in the 1990s; the growth
rate of private-sector employment actually went up from 0.16 per cent
to 2 per cent during the same period. The fall in public-sector employment
was not compensated by the growth in private-sector employment since the
private sector's share in organised-sector employment was only a third.
Even so, the experience of the 1990s is reassuring and if rigid labour
regulations and laws are liberalised and we put in place a pro-labour
exit policy, the growth in organised private sector jobs will be even
more impressive. The lack of a timely and humane exit policy has actually
hurt labour and only benefited industrialists-hence, the paradox of a
lot of sick industry but no sick industrialist in India.
The task force will come out with a detailed
sectoral agenda for accelerating employment growth. At its most aggregate
level, India's employment challenge is to generate 10 million jobs every
year. A sustained 7-8 per cent rate of GDP growth is an absolute must.
While this will call for an increase of an investment rate by about 3
to 4 percentage points to about 29-30 per cent of the GDP, the main focus
has to be on increasing investment efficiency. This, more than lower investment
rates per se, is our Achilles' heel.
(The author
is with the Congress party. These are his personal views.)
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