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Task force on employment set to finalise report

G. Srinivasan

NEW DELHI, May 20

THE task force on employment opportunities headed by the Planning Commission member, Dr Montek Singh Ahluwalia, will have a final sitting on May 24 to wrap up its deliberations and stitch together a report to be presented to the Deputy Chairman, Mr K.C. Pant.

Official sources told Business Line here that almost all the finer points to be incorporated into the report had been discussed threadbare and all the 13-members would be present at the meeting.

Some of the members include the Labour Secretary, Mr Vinod Vaish, Secretary, Department of Small Scale, Rural & Agro Industries, Mr Vishwanathan Anand, Dr Arvind Viramani, Senior Economic Adviser, Department of Economic Affairs, Prof Subhahish Gangopadhy ay, Indian Statistical Institute.

Sources said the task force report in its draft form had conceded that though the extent of open unemployment in the country was not high, the rate of unemployment had increased in the 1990s which is a cause for concern.

Using four different measures of employment and unemployment provided by the National Sample Survey Organisation (NSSO), it is estimated that the unemployment rate for 1999-2000, the latest available, varies from a relatively low of 2.23 per cent based o n the UPSS (usual principal and subsidiary status) definition (which relates to percentage of individuals in the labour force classified as unemployed) to a high of 7.32 per cent based on the CDS (current daily status) definition (which refers to percent age of person days).

According to the sources, the NSS data for 1999-2000 throws up a very distinct deceleration in the rate of growth of total employment. The rate of growth of employment fell sharply from 2.04 per cent per year in the period 1983 to 1993-94 to only 0.80 pe r cent per year in the span 1993-94 to 1999-2000.

This decline in employment growth, viewed in isolation, is a matter of grave concern confirming apprehensions often voiced that economic growth in the 1990s has been of a jobless nature.

But, the deceleration in employment growth ought to be viewed in the context of an equally sharp decline in the growth of the labour force from 2 per cent in the period 1983 to 1993-94 to only 0.84 per cent in the period 1993-94 to 1999-2000. This implie s that the employment growth was much lower than in the previous period but the labour force also grew much more slowly so there was only a marginal increase in the rate of unemployment on the UPSS definition, sources said.

The working group for the Ninth Plan had projected labour force growth at 2.5 per cent in the period 1999-2002. The actual labour force growth in the period 1993-94 to 1999-2000, based on estimates emerging from the NSS 55th Round was much lower at 0.84 per cent per year. This implies considerable scaling down of the number of new jobs to be created.

With a base year labour force of 393 million in 1999-2000, a two per cent growth in the labour force as earlier projected meant an annual addition of about 8 million to the labour force for which new jobs have to be found. With the observed growth rate o f 0.84 per cent, the annual increase is only 3.2 million, the sources said adding that the potential growth of total organised sector employment in the next 10 years would be limited.

The job strategy in the next decade must, therefore, recognise that the bulk of the growth in employment would have to emanate from the unorganised sector. How to ensure that this sector can provide a sufficient supply of high quality job opportunities i s a major challenge, sources added.

There are twin factors which underline the perception that employment continues to be a serious problem. First, the quality of large volume of employment generated in the system is very low, in the sense that it does not provide an adequate level of inco me even to keep a family out of poverty.

Second, unemployment is very high among certain groups, particularly among educated youth, showing a serious mismatch between the expectations of new entrants to the labour force and the quality of employment opportunities available to them.

Since much of the employment problem pertains to the low quality of employment existing, what is needed is a strategy that would foster more high quality jobs which generates higher levels of income, the source said.

The demand for organised sector jobs could only be met in future if there is rapid growth in organised sector employment in the private sector. This entails conscious efforts to remove some of the disincentives which discourage rapid expansion of regular employment in the private sector, the sources added.

One of these is the inflexibility of labour laws and as such changes in the labour laws to let greater flexibility to employers are important to give employers sufficient spur to increase employment, the sources said.