iiie section a economics notes : unemployment in india

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“Jobs in India are shrinking at an alarming rate. Privatization and globalization have further aggravated the problem. Instead of generating employment, they have rendered millions of hands idle. American policies are effective there but not in India where the accursed ones are left to fend for themselves leading to frustration, disappointment, anger and violence". Unemployment is the mother of countless ills. It is such a poison that pollutes the society, endangers the democratic fabric of the country. We can't expect nobility, honesty and truth from a person who is unable to manage two square meals a day for his family. An unemployed person has no sense of self-respect as he has no sense of security. "Rightly", said by Franklin, “A ploughman on his feet is better than a gentleman on his knees. " Estimates of the total number of Indians unemployed or underemployed vary between 70 and 100 million. This figure can cause concern to any nation, but to a developing country like ours, it is the cause of great distress. A developing country must mobilize its manpower resources to the maximum possible extent and a developing country with such a large segment of its population unemployed or underemployed is a contradiction in terms. In India the specter of frustration of misery and hunger of fallen hopes and barren dreams of bitter pain and dark despair haunts the unemployed. It is true that the future of a country depends on the ability and the mental attitudes of its young men and women then India has already lost the will to develop. If India allows her young men to be gripped by insecurity and frustration, she will have to pay for modernization and rapid advancement with several years of stagnation. The universities with their techniques of mass education and system of examination, offer little information and less

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IIIE SECTION A ECONOMICS NOTES

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Page 1: IIIE SECTION A ECONOMICS NOTES : Unemployment in india

“Jobs in India are shrinking at an alarming rate. Privatization and globalization have further aggravated the problem. Instead of generating employment, they have rendered millions of hands idle. American policies are effective there but not in India where the accursed ones are left to fend for themselves leading to frustration, disappointment, anger and violence".

Unemployment is the mother of countless ills. It is such a poison that pollutes the society, endangers the democratic fabric of the country. We can't expect nobility, honesty and truth from a person who is unable to manage two square meals a day for his family. An unemployed person has no sense of self-respect as he has no sense of security.

"Rightly", said by Franklin, “A ploughman on his feet is better than a gentleman on his knees. "

Estimates of the total number of Indians unemployed or underemployed vary between 70 and 100 million. This figure can cause concern to any nation, but to a developing country like ours, it is the cause of great distress. A developing country must mobilize its manpower resources to the maximum possible extent and a developing country with such a large segment of its population unemployed or underemployed is a contradiction in terms.

In India the specter of frustration of misery and hunger of fallen hopes and barren dreams of bitter pain and dark despair haunts the unemployed.

It is true that the future of a country depends on the ability and the mental attitudes of its young men and women then India has already lost the will to develop. If India allows her young men to be gripped by insecurity and frustration, she will have to pay for modernization and rapid advancement with several years of stagnation.

The universities with their techniques of mass education and system of examination, offer little information and less understanding. The grapes at the end of the course, acquired after many years of ill-spent effort and spending bulk of hard earned money of the parents, very often turn out to be sour, as the degrees soon prove valueless, and succeed neither in increasing the students' mental alertness and intellectual capabilities nor in raising their chances of employment.

The student unable to secure employment passes on from one academic degree to another from one vacuum to another and as he goes on, the employment that he desires becomes increasingly elusive. At the end of the process, the student very soon realize that he is not a first-class intellectual who can step out of the university into waiting eager commercial units; that he is not doing them a favor by joining them but that they are doing him a favor by accepting him.

Many of them drift aimlessly into coffee houses, theatres and billiard clubs in an effort to escape from the world in which they are sure they have no place and utility., Should not

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this in itself cause distress to a nation which requires all possible physical and psychological assistance with which to develop?

"Employment generation is an issue of life and death for our democracy”, says Amit Mitra, secretary general of the Federation of Indian Chambers of Commerce and Industry, a business lobby.

India was Asia's fastest expanding economy in the most recent quarter data Growth is its highest in nearly 15 years. Glitzy shopping malls are springing up and a culture of consumption is taking root as foreign companies are attracted by cheap labour.

But growing unemployment is forcing people from rural areas to migrate in hordes to nearby cities and towns, creating slums, social unrest and electricity and water shortages. "There is some truth in the fact that jobs have not grown as much as expected as the economy has grown," Ashok Lahiri, chief economic adviser to the government, told Reuters, "We have to expand employment. There is no doubt about that. "But even getting to grips with the scale of the problem is hard enough: India does not regularly release unemployment data and forming a view on the trends has to come from a combination of rarely issued official reports and anecdotal evidence.

Millions of laboring, street vending and farm jobs fall below the government’s radar screen and getting information on them is a daunting task. Some 92 percent of Indian jobs are thought to be informal. Even for the remaining eight percent, the numbers are hard to come by. The government issues an employment report once every five years and economists can glean trends from Indian census data which is published every 10 years. The world’s top economies publish data every month. India estimate un-employment currently to be around 7.8 percent, a government official said. Whether it is, the figure looks to be on the rise. The Planning Commission says nearly35 million people are registered with employment exchanges from 27 million four years ago.

India knows one thing based on demographic trends, is that to keep the jobless rate from rising more, it must create some 60 million jobs in five years as more Indians enter the job market. More than 65 percent of the population is under 35. India expects economic growth of at least eight percent in the year ended March 2004. But economists say it's not enough to create 12 million jobs a year. For instance,the country's success in information technology and emerging areas such as retail and tourism is expected to adjust some 2.2 million jobs in the next few years, according to industry estimates. Government adviser Lahiri bristles at the suggestion this is a jobless recovery. "I don 't think the growth has been jobless is an overstatement” he said.

But economists say the trend threatens long-term prospects."If we fail to create more jobs it will lead to a lot of social tension which in turn will hurt the economy," said Saumitra Chaudhuri, economic adviser at Indian credit finl1 ICRA."Large unemployment for a country like India is not something desirable," he said.

Page 3: IIIE SECTION A ECONOMICS NOTES : Unemployment in india

Some economists say the jobs problem stems from an economic liberalization programme launched more than a decade ago. The country's huge public sector has shed thousands of jobs since it stepped on the road to privatization in the early 1990s.The Planning Commission, in a report on employment published last year, attributed rising joblessness to a policy of shedding excess labour in both the private and public sector. It said companies had stepped up investment in plants and machinery more than in labour-intensive industries.Economists add that a $53 billion fiscal deficit prevents the government from creating employment by spending more on social sectors such as health and education." We should be looking for a fiscal-led economic expansion based on the basic needs of the people which will have a much higher multiplier effect," says Jayati Ghose, professor at New Delhi's Jawaharlal Nehru University.

In the light of this the task of harnessing the unemployed should be put on a war footing. Massive urban recruitment will be useless as the cities which have got along well enough without the recruits, can certainly continue to do so. Besides, massive urban recruitment will be. inflationary and hence is impracticable. The unemployed population should be mobilized for rural reconstruction, especially as the villages lack technical know-how and also that 70 per cent of India's population lives there. Stressing on agronomy will augment rural reconstruction, enlighten the farmers, raise agricultural production, conserve foreign exchange and above all be a step towards self-sufficiency and employment for ail.

The only other country which successfully mobilized vast populations for national development is China. If we are to mobilize our man power resources we must learn from the mistakes of China during her Great Leap Forward. The Chinese made three basic mistakes. Firstly, the peasants were given inadequate training. Secondly, the tax levied on agriculture communes was exorbitant often is high as 70 per cent the total produce. Finally, recruitment was governed not by considerations of merit and ability to do the job, but by loyalty to the Communist Party and on ideological grounds. In India the counterpart of this last mistake is recruitment of workers on communal, regional and linguistic grounds. This must go. It is the duty of every responsible and patriotic Indian to herald in a new 'meritocracy.'

Unemployment in our country has become such a complicated, economic, social and political issue, that requires urgent steps to eliminate its scourge. Half hearted measures or temporary solutions will not yield any fruitful results. The foremost requirement is the overhauling the existing educational system. We have to change the system from producing white collar job seekers to practically job oriented technocrats, capable to start their own ventures There should be perfect coordination and integration between our education and the industrial environment. We have to search new avenues in farm sector, herbal and medical fields to provide job opportunities after completing the education by the students. India should also go for fast development of cottage and small industries. Government should take effective steps so that the globalization does not effect the small and cottage industries.The industrial development can relieve us from this problem to a great extent. We must concentrate on labour intensive units. We have to plan and exploit our industrial potential to the fullest extent to provide jobs to the fellow youths. In a

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nutshell the problem of unemployment has to be dealt with on war footing lest the youth should be diverted to some wrong path.

Schmes to reduce un employment in India

Apart from the programs which are mainly aimed at the development of infrastructure, such as construction of small and large dams, canals and roads, the government strategies to generate employment are closely associated with poverty-alleviation programs. Nevertheless, the government has undertaken many special programs to generate employment opportunities. The major ones among them are:

Rural Works Program: This program aims at construction of civil works of permanent nature in rural areas.

Integrated Dry Land Agricultural Development: Under this scheme, permanent works like soil conservation, development of land and water harnessing are undertaken.

National Rural Employment Program: This program aims to create community assets for strengthening rural infrastructure, like drinking water wells, community irrigation wells, village tanks, minor irrigation works, rural roads and schools.

The Rural Landless Employment Guarantee Program: It aims at generating gainful employment, creating productive assets in rural areas and improving the overall quality of rural life.

Skill Development: One of the major issues relating to unemployment is skill development. Change in the production methods has led to increase in demand for skilled labor. A skilled laborer is one who has proper training and education to work in a particular field. Training and education increase the productivity of workers.

Skill development means:

To educate and provide specialized training to the labor force in order to increase their productivity.

To ensure continuous employability of labor.

To be able to absorb the new technologies at the work.

To compete with the labor force of the other developed countries.

With a view to impart skills through training, the Government of India has taken many steps. The Central Board of Workers' Education (CBWE), formed in 1958 is doing significant work by creating understanding and enthusiasm among workers for the

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success of industrial growth. There are around 4300 Industrial Training Institutes (ITIs) operating in India to produce specialized workers. Various ministries of the Government of India are providing vocational education and training. Vocational education has been integrated at the school level as well. In the school system, there is a provision for vocational education after Class X.

But there are a number of problems associated with these steps. The ITIs need restructuring and reorientation of their courses at a much faster rate so as to respond effectively to the current and future needs of the job market Further the Industry-Institute interaction continues to be weak. The vocational courses offered by the school system are to be modified in accordance with the manpower needs of the day.

Entrepreneurial Development: Growth of employment involves setting up of new businesses, which apart from capital need expertise and organizing ability. Providing training for this purpose and implementing schemes to promote entrepreneurship has, therefore, been considered necessary for promoting self-employment.

The government has implemented a number of schemes for providing low cost capital to the small enterprises and self-employed persons. The schemes are aimed at developing their entrepreneurial ability, guiding them in preparation of project reports for financial assistance and giving technical and professional help in running their businesses. Financial institutions like banks have helped in this process by providing credit facilities at concessional rates. These measures have brought about positive results in recent years as a new class of entrepreneurs different from the earlier family-based businesses has emerged. This group has helped in expansion of India's industries and businesses into newer domains and regions.