CHAPTER-7 Conclusions & Suggestions

Transcription

1 281 CHAPTER-7 Conclusions & Suggestions Conclusions Suggestions

2 282 Having completed a comprehensive study of "Impact of Economic Liberalisation on Employment Generation In India", it is now possible and desirable to summarise the study in a broader perspective and to offer some suggestions which may help the government in solving the economic problem 'Unemployment and Under Employment'. It will help the Government in utilising the available human resources to the best possible extent which, in turn, will help in increasing the level of production and productivity. I, also, have gathered enough courage and confidence to give a brief sketch of my findings and also to give some suggestions in this regards. This is precisely what is done in this chapter. CONCLUSIONS This study was undertaken with the primary object to study the impact (positive as well as negative) of economic liberalisation on employment generation in India. It aimed at studying whether employment opportunities have increased or decreased or remained constant during post-liberalisation period, whether there is any qualitative improvement in employment conditions, whether employment generation programmes initiated by the Government of India have been successful in achieving their objectives, etc. Introduction India is a developing country, marching ahead on the path of development. In this process, it becomes inevitable that available resources should be utilised to maximum possible extent. It necessitates that available natural, physical and human resources should be utilised in the manner that the country may realise her dreams of development. From human resources point of view, India is fortunate enough to be the second most populated country in the world. To add to this fortune, Indian people are recognised as most talented and hard working people in the world.

3 283 Unfortunate aspect of this story is that India has not utilised its human resources to desired extent. Many of our people, urban and rural, educated and uneducated, are unemployed or under-employed. India inherited a dismal economy from the British Rulers at the time of independence in Even after almost six decades of development efforts, India is a low-income developing economy, facing the twin formidable problems of unemployment and poverty. The post independence economic development of India has focused on the removal of poverty and unemployment. Various programmes and schemes have been launched from time to time by the Central and State Governments to ameliorate the sufferings of people, particularly rural population. In the wake of economic reforms, while the economy has performed well in terms of growth rate of GDP, its performance in terms of human development has been unsatisfactory. Social sectors like health, family welfare, education, training, employment, women employment and rural infrastructure have lagged behind in the race for better standard of living. Concepts of Employment A person engaged in a job is called an employed person. He may be engaged in agriculture or business or profession or service. The structure of employment can be divided as follows Sectoral Distribution of Employment: An economy is divided into three sectors: Primary sector, secondary Sector and Tertiary sector. Agriculture and allied activities like forestry, fishing, dairying, mining and quarrying are the activities of primary sector. Manufacturing, Electricity, Gas, Water supply and construction constitute the secondary sector. The tertiary sector, also known as service sector,

4 284 includes trade, transport, storage, communication, financial and social services. Employment in Organised and Unorganised Sector: Organised sector is restricted to manufacturing, electricity and financial services. On the other hand, whole of the agricultural and allied activities and most of the construction, trade, transportation, communication and social services are in the unorganised sectors. Rural and Urban Employment: In rural sector, most of the employment is in agricultural and allied activities whereas, in urban sector, most of the employment is in secondary and tertiary sectors. Concepts of Unemployment A person working for 8 hours a day for 273 days in a year is regarded as employed on a standard person year basis. Any person working for less than this is regarded as unemployed or under-employed. Three concepts of measuring unemployment are used in India: (i) 'Chronic Unemployment or Usual Principal Status Employment' is (measured in terms of number of persons) i.e., the persons who remained unemployed for a major part of the year. (ii) (iii) Weekly Status Unemployment (measured in terms of number of persons), i.e., the persons who did not find even an hour of work during the survey week. Daily Status Unemployment (measured in terms of person days or person years) i.e., the persons who did not find work on a day or some days during the survey week.

5 285 Estimation of Unemployment Structural Unemployment: It is a situation in which a country is unable in providing job to all job-seekers, mainly because of limited resources. India's problem of unemployment is basically structural. Disguised Unemployment: This form of unemployment remains invisible. In this situation, more than required workers share a given amount of work. If some workers are withdrawn, the same work will continue to be done by fewer people. Indian agriculture is the best example of this time of unemployment. Underemployment: It is a situation under which employed people are contributing to production less than they are capable of. Example A Ph.D. holder joins a teaching job in a primary school for the want of an appropriate job. Open Unemployment: It is a situation in which all the persons capable and willing to work do not get a job. This type of unemployment is very common in urban areas. Educated Unemployment: It is concerned with joblessness among the educated persons i.e., matriculate and higher educated. Mostly towns and cities are faced with this type of unemployment. Cyclical Unemployment: Associated with the downsizing and depression phases of business cycle, it is to be found in capitalist or market-oriented developed economies. The trade cycle in its downward phase renders many people as unemployed. Frictional Unemployed: A number of changes take place in the process of development. In such a situation, workers move from industry to industry. In between the time of leaving one job and joining next job, the time for which a worker gets no work, is the

6 286 period of frictional unemployment. Such unemployment normally does not exist in India. Seasonal Unemployment: It is a situation in which the workers get an employment but only for a limited period and remain idle for the remaining period. Indian agriculture produces a good example of such unemployment. Demographic Unemployment: It is situation in which the number of new workers entering the labour market exceeds the number of jobs available. It is very common in India because the growth rate of population in India is much higher than that of employment opportunities. Technological Unemployment: It is a situation in which a large number of workers are thrown out of job because of technological changes and progress. Nature of Unemployment in India In the context of rapidly changing structure of our economy, significant changes are taking place in the nature of unemployment also. These changes may be summarised as under - Inadequate Work: One aspect of the problem is the non-availability of work for entire labour force. As a result, many persons are not getting work to engage themselves fully. Practically, they are underemployed or seasonally employed only. Besides, there are many who do not have any job to do. Low Productivity Work: Another aspect of the problem is that most of the workers are very poor and their earnings are very small because of the low productivity of their work.

7 287 Chronic or Structural Unemployment: In our country, unemployment is Chronic (permanent) in the nature, rooted in the under developed character of our economy. We are unable in offering adequate work opportunities to the entire labour force. Estimates of Employment in India In the recent past, there has been deceleration in the growth of employment in India in spite of the accelerated economic growth. The growth of employment in rural areas declined from 1.72 per cent per annum during to to just 0.47 per cent per annum during to The same in urban areas declined from 3.10 per cent to 2.70 per cent. The overall growth in employment declined from 2.01 per cent per annum to just 0.98 per cent per annum during the same period. From employment data by sectors, we come to conclude that there has been a decline in employment in agricultural sector, accounting for per cent of total employment in the country in Contribution of manufacturing sector in providing employment has remained almost stagnant, contributing 12.9 per cent of total employment in Contribution of services sector increased significantly during this period from per cent to per cent. The most disturbing feature of urban employment during this period has been a sharp deceleration in organised sector employment. Though, private sector employment has increased but not enough to compensate for the loss of employment in public sector.

8 288 Estimates of Unemployment in India The unemployment rates by the three alternative concepts of the usual status, the current weekly status and the current daily status have become available from the various rounds of NSSO (National Sample Survey Organisation) surveys. The latest survey on employment and unemployment conducted by the NSSO is its 62 nd round conducted from July 2005 to June Main findings of this survey may be summarised as follows: According to the usual status (PS+SS), about 56 per cent of rural males and 31 per cent of rural females belonged to the labour force. The corresponding proportions in the urban areas were 57 per cent and 15 per cent respectively. About 41 per cent of the population of our country was employed under usual status (PS+SS). The Workers Population Ratio (WPR) was 43 per cent in the rural areas and 35 per cent in the urban areas. The WPRs obtained according to current daily status were lower than those obtained in the current weekly status, which, in turn, were lower than those according to usual status rates. WPR (male plus female as also rural plus urban) as per current daily status was 34 per cent and as per current weekly status 38 per cent, while as per usual approach it was 41 per cent. In rural India, more than half of the usually employed (all workers) were self-employed-57 per cent among males and nearly 62 per cent among females. The corresponding figures in urban India were 42 for males and 44 for females.

9 289 The percentage of regular wage/salaried employees was relatively lower among females as compared to males in both rural and urban India: 10 for males and 4 for females in the rural areas and 42 for males and 40 for females in the urban areas. In rural India, among 'all usually employed', about 65 per cent of the males and 81 per cent of the females were engaged in the primary sector (excluding mining and quarrying). In rural India, there has been gradual increase in the proportion of males engaged in 'secondary sector (including mining and quarrying)' from 10 per cent in 1983 to 17 per cent in for males and 7 per cent to 12 per cent for females. The proportion has also increased in the 'tertiary sector' from 12 per cent to 18 per cent among males and from 5 per cent to 7 per cent among females. In urban India, the 'tertiary sector' engaged about 59 per cent of the male workers while the 'secondary sector' accounted for about 34 per cent of the usually employed males. For females, the corresponding figures were lower: 52 and 33 per cent respectively. Proportion of urban females employed in the primary sector fell by about 16 percentage points since 1983, with a significant rise for other sectors. The unemployment rate was not high for rural areas if the usual status approach is followed-it was around 2 per cent (for males nearly 3 per cent and for females nearly 2 per cent). In urban areas, the unemployment rates were higher than those in rural areas, except for the current daily status approach in which the

10 290 unemployment rates for rural and urban areas were almost equal (nearly 8 per cent.) The unemployment rate, obtained by any of the approaches, was higher for females than that for males in the urban areas, but it was lower than that for males in the rural areas. Among educated persons, (with education level of secondary and above), in the age group years, the unemployment rate in rural and urban areas was 12 per cent and 16 per cent respectively, the rate was much higher than that for those with educational level of middle or below. The rate of underemployment was, thus, found higher in rural areas than urban areas and higher for females than males under all the three approximations. Compared to , the unemployment rates, in urban areas, increased for males in all the approaches, except CDS approach and for females they decreased in all the approaches. In rural areas, also, similar trend is observed in the unemployment rates during the same period- they increased for males and decreased for females. Underemployment Underemployment is commonly defined as the under-utilisation of labour time of workers. For instance, some of the persons categorised as usually employed, do not have work throughout the year due to seasonality in work or otherwise and their labour time is not fully utilised-they are, therefore, underemployed. Their underemployment is termed as visible underemployment if they report themselves to be available for work with respect to a shorter reference period.

11 291 Some employed persons, particularly the self-employed, may appear to work throughout the year. But the work they are pursuing may not fully meet their needs in terms of generating sufficient income. They may, therefore, want additional and/ or alternative work. Such underemployment is termed as invisible underemployment and, therefore, not directly measurable. The NSS calculates the indicators of invisible underemployment through a set of probing questions addressed to those categorized a usually employed on their availability for additional /alternative work and also the reason for seeking such additional/ alternative work. The proportion of usually employed males who were found to be not employed during the week preceding the date of survey, i.e., underemployment rate, was 5 per cent in the rural and 2 per cent in urban areas. Compared to males, the problem of underemployment is more serious among the usually employed females, particularly in rural areas. Among them, the underemployment rate was as high as 18 per cent in rural and 8 per cent in urban areas. During , the percentage of person-days on which the persons with some work during the reference week (according to current weekly status) were without work, was estimated at about 6 for rural males, 21 for rural females, 3 for urban males and 11 for urban females. Causes of Unemployment in India Jobless Growth: Economic growth of a country is usually expected to generate additional employment opportunities. However, in India, most of the time, growth has been jobless. Though the rate of economic growth has been quite satisfactory but there was a steep decline in employment elasticity in all the major sectors.

12 292 Increase in Labour Force: Since independence, population of India has registered an unprecedented growth, followed by a natural expansion in labour force. Women education has changed their attitude towards employment. However, our economy has failed to respond to these changes and all this has caused a continuous to increase in unemployed backlog. Inappropriate Technology: For a country like India, labourintensive techniques of production might have solved the problem of unemployment. However, not only in industries, but also in agriculture, producers are substituting capital for labour. Inappropriate Education System: Indian education system does not aim at the development of human resources. It produces only the lower cadre executives. Neo-Liberal Economy Policy: With the introduction of neo-liberal structural reforms in India, income inequalities have increased. It has led to demand constraint and unemployment. Inadequacy of planning: Economic planning of India has failed in balancing the manpower needs and supplies. In some sectors, we have more than we need whereas in other sectors, we do not get what we require. Consequences of Unemployment in India Poverty: Poverty is the immediate consequence of unemployment because when a person is unemployed, he earns nothing and becomes poor. As per the estimates of , per cent of total population of our country was living below the poverty line. Income Inequalities: India is best with gross economic inequalities, mainly due to unemployment.

13 293 Under-Utilization of Resources: An important economic consequence of unemployment is that the resources available in the country, particularly human resources, remain under-utilised. Perhaps, it is the reason why India is said to be a rich country, inhabited by the poor. Social Problems: Unemployment is the mother of a number of social problems. An unemployed person finds himself to do what he does not like to do and what he should not do. Economic Liberalisation: An Introduction Economic Liberalisation is a process in which unnecessary controls and restrictions are removed from trade and industry to create a suitable environment for growth and development. Important aspects of the process of economic liberalisation are as follows: To provide a freedom to entrepreneurs to establish an industry or trade or business venture. To open a number of industries for private sector that was so far reserved for public sector. To invite private entrepreneurs to participate in core economic sector like insurance, banking, power generation, development of roads etc. To remove unrequired controls and restrictions from business and industrial enterprises so that they may work smoothly and contribute in the process of economic and social development. To create a stable macroeconomic policy environment conducive to the market forces.

14 294 Steps of Indian Economy towards Liberalisation De-Reservation of Industries for Public Sector: A number of industries have been reserved for public sector since In the wake of economic liberalisation, almost all the industries have been opened for private sector, except a few areas where security and strategic concerns dominate. Abolition of Industrial Licensing: New policy has abolished all industrial licencing, except a few industries. Removal of Mandatory Convertibility Clause: Banks and financial institutions will no more be allowed to impose the convertibility clause. Removal of Investment Controls: Investment controls imposed under MRTP Act have been removed. Automatic Approval for Foreign Technology Agreement. No needs of permission for hiring foreign technicians. Automatic approval for foreign equity in selected cases upto 51 per cent, 74 per cent and even upto 100 per cent. Dis-Investment of Government Shareholding: A part of the shares hold by Government in public sectors units have been and are being dis-invested. Convertibility of Rupee: India Rupee has been made fully convertible on current account and necessary steps are being initated to make it fully convertible on capital account also. Liberalization of Exerts and Imports: A number of controls and restrictions on exports and imports have been removed to allow a free flow of goods and services.

15 295 Economic Liberalisation: A Boost for Employment Opportunities An accelerated expansion of employment opportunities is necessary both for poverty alleviation and effective utilisation of human resources for the economic and social development of country. Assessment of the presnt backlog of unemployment and likely additions to labour force suggest that this goal will require generation of additional ten million employment opportunities per year, or about three per cent average annual growth of employment opportunities. A geographically and diversified agriculture, wasteland development for crop cultivation and forestry, rural non-farm sector, small scale manufacturing, urban informal sector, rural infrastructure, housing and services, have been identified as the sectors and areas constituting the basic elements of employment oriented growth strategy. Expansion of employment opportunities has been an important objectives of development planning in India. However, a relatively higher growth of population and labour force has led to an increase in the volume of unemployment from one plan period to another.

16 296 Economic Liberalisation: A Challenge For employment Opportunities New economic policy measures do not contain any specific reform proposals to integrate labour in the overall framework of policy changes. The wave of liberalisation is left free to create its impact on employment and earnings of the work- force, whatever is its direction. Most studies on the effects of economic reforms on employment situation are pessimistic about the prospects of employment during post reform period. There is much to worry about the slow-down in real wageearnings, and deceleration in the quality of employment. Growth rate of real wages manifests a trend of slow-down. Quality of employment has definitely deteriorated. As a matter of fact, the casualisation phenomenon got accentuated with economic liberalisation. Employment Generation Progammes during Pre-Liberalisation Period Though the removal of unemployment has ever been a proclaimed objectives of India's economic planning, yet until the sixth five year plan, one does not find any reference to long-term employment policy with a bold approach to tackle the unemployment problem. For a long time, it was assumed that employment situation would automatically improve as a result of economic growth.

17 297 During the period of sixth five year plan, major employment programmes undertaken were: Integrated Rural Development Programme (IRDP), National Rural Employment Programme (NREP), National Scheme of Training Rural Youth for Self- Employment (TRYSEM), Operation Flood II Dairy Project. The Seventh Plan assigned a key role to the agricultural sector for employment generation. However, the agricultural sector cannot eliminate the entire unemployment backlog and absorb additions to the labour force. Therefore, programmes of rural development, particularly, those of rural capital formation in the form of construction were undertaken. Employment Generation during Post-Liberalisation Period Under the Eighth plan, the special employment programmes were regarded only an interim measure to provide supplementary employment. The growth of labour force accelerated in the Ninth Plan period in comparison to the preceding decade required a commensurate increase in the pace of creating additional work opportunities in this period. Since, labour force growth is expected to be at its peak in the Ninth Plan period, attainment of near full employment by the year 2007 may not be an unreasonable target. The Tenth Plan aimed at providing gainful employment opportunities to the entire additions to labour force during the plan period and beyond. In the rural sectors, Pradhan Mantri Gram Sarak Yojana (PMGSY), Sampoorna Gramin Rozgar Yojana (SGRY) and Swarnajayanti Gram Swarozgar Yojana (SGSY) are expected to create incremental employment opportunities to the

18 298 extent of 2.86 million. The rural employment generation programme of KVIC, PMRY and new initiatives of development small and medium enterprises are expected to create additional 4.2 million employment opportunities during the Tenth Plan. The Eleventh Five Year Plan states that India is currently at the stage of 'Demographic Transition' where population growth is slowing down but the population of young people entering the labour force continues to expand. Therefore, it becomes essential to produce a growth process in which employment would be available not only for the new entrants but also to the workers leaving agriculture. With this view, it has been decided to focus on labour intensive industries and small and middle enterprises. Specific programmes for the development of skills at all levels will be an essential part of the Eleventh Plan. Major Employment Generation Programmes National Rural Employment Programme (NREP) The National Rural Employment Programme is conceived, to take care of the rural poor. Under this programme, development projects and target group oriented employment generation projects will be closely intertwined. NREP will be implemented, as a centrally sponsored scheme on 50:50 sharing basis between the Centre and the States. The Centre will provide its share in the form of food grains to the extent surplus food grains are available, and the rest in cash. Inter-State allocation of food grains will be made on rational criteria related to the population size of the target group. The States will be encouraged to produce sorghum, millets and other locally grown food grains and utilise them under the scheme. The wage paid under the programme should be at par with the

19 299 minimum agricultural wage prescribed for the area. The quantum of food grains as part of the wage should be adequate for the family's need. Food for Work Programme (FWP) The food for work programme was started in January, as a part of the Employment Assurance Scheme (EAS) in eight drought affected States. Now the programme is in operation in the States of Andhra Pradesh, Bihar, Chattisgarh, Gujarat, Himachal Pradesh, Kerala, Karnataka, Madhya Pradesh, Maharashtra, Orrisa and Rajasthan. The food for work programme is a general scheme, which can form a part of any wage employment scheme of the Central or State Government. Government of India makes available appropriate quantity of food grains to each of the affected States. Supply of food grains is made to the workmen preferably at the work site. Preference shall to be given to labour-intensive works, particularly those which would help in drought-proofing such as moisture conservation works, waterwashed development works, water harvesting, digging up of village ponds/ tanks and water courses and construction of rural links roads (Kutcha Road) etc. As far as possible, the works to be taken up should result into durable assets. Rural Employment Generation Programme (REGP) On the basis of recommendation of the High Power Committee report, submitted in May 1994, headed by the then prime minister of India, the KVIC launched Rural Employment Generation Programme (REGP) with effect from 1 st April, 1995 for the generation of two million jobs under the KVI sector in the rural areas of the country. The scheme is applicable to all village industries or projects set up in rural areas.

20 300 Under the scheme, the borrower is required to invest his own contribution of 10% of the project cost. In case of SC/ST and other weaker section borrowers, the beneficiary's contribution will be only 5% of the project cost. Banks will sanction 90% of the project cost in case of general category borrowers and 95% of the project cost to weaker section beneficiaries/ institutions. During the year , a total of 23,453 projects have been financed under the scheme generating 5,30,025 number of employments. Jawahar Rozgar Yojana (JRY) By merging the two erstwhile wage employment programme- National Rural Employment Programme (NREP) and Rural Landless Employment Guarantee Programme (RLEGP), the Jawahar Rozgar Yojana (JRY) was started with effect from April 1, 1989 on 80:20 cost sharing basis between the Centre and States. The main object of this programme was to create additional gainful employment for the unemployed and under-employed persons in rural areas. Though the people below poverty line were the target group for employment, preference was to be given to scheduled castes, scheduled tribes and freed bonded labourers. Thirty per cent of the employment opportunities were to be reserved for women in rural areas. Gram Panchayats were to be involved in the planning and implementation of the programme. This Yojana has been restructured as Jawahar Gram Samridhi Yojana (JGSY) w.e.f Jawahar Gram Samridhi Yojana (JGSY) Jawahar Gram Samridhi Yojana (JGSY) has been launched w.e.f to ensure the development of rural infrastructure at the village level by restructuring the erstwhile Jawahar Rozgar Yojana (JRY). The primary object of JGSY is to create the demand driven community village

21 301 infrastructure including durable assets at the village level and to increase the opportunities for sustained employment. Village Panchayats is the sole authority for its implementation with the approval of Gram Sabha. Village Panchayats can execute works/ schemes up to Rs. 50,000/- without technical/ administrative approval. However, Gram Sabha's approval is must % of JGSY funds have been earmarked for individual beneficiary schemes for SCs/STs. Wages under JGSY will either be the minimum wages notified by the States or higher wages fixed by the States through prescribed procedure. All works that result in the creation of durable productive community assets can be taken up by the village panchayats under the programme. Integrated Rural Development Programme (IRDP) This programme was launched in and extended all over the country in The Integrated Rural Development Programme (IRDP) aims at providing self-employment to the rural poor through the acquisition of productive assets or appropriate skills that would generate additional income on a sustained basis to enable them to cross the poverty line. Assistance is provided in the form of subsidy and bank credit. The target group consists largely of small and marginal farmers, agricultural labourers and rural artisans living below the poverty line. The pattern of subsidy is 25 per cent for small farmers, 33-1/3 per cent for marginal farmers, agricultural labourers and rural artisans and 50 per cent for Scheduled Castes/ Scheduled Tribes families and physically handicapped persons. Within the target group, there is an assured coverage of 50 per cent for Scheduled Castes/ Scheduled Tribes, 40 per cent for women and 3 per cent for the physically handicapped. Under this scheme central funds are allocated to States on the basis of proportion of rural poor in a State to the total rural poor in the country.

22 302 The IRDP has been successful in providing incremental income to the poor families, but in most cases the incremental income has not been adequate to enable the beneficiaries to cross the poverty line on a sustained basis. There has been considerable diversification of IRDP activities. Proportion of beneficiaries under the programme engaged in primary sector has come down to around 55 per cent, while the shares of the secondary and tertiary sectors have increased to 15 per cent and 30 per cent respectively. Swarna Jayanti Shahari Rozgar Yojana (SJSRY) Government of India launched a rationalized poverty alleviation scheme Swarna Jayanti Shahari Rozgar Yojana replacing three existing schemes, viz. (i) Nehru Rozgar Yojana (NRY), (ii) Urban Basic Services for the Poor (UBSP), and (iii) Prime Minister's Integrated Urban Poverty Eradication Programme (PMIUPEP.) The scheme contains all essential features of the three schemes and is operative since 1 st December 1997 in all urban towns in India. SJSRY seeks to provide gainful employment to the urban poor (living below the urban poverty line) or under-employed, through setting of self-employment ventures or the provision of wage employment. The scheme is to be funded on a 75:25 basis between the Centre and the States. Swarna Jayanti Shahari Rozgar Yojana consists of two special schemes, namely- (a) Urban Self-Employment Programme (USEP) Assistance to individual urban poor beneficiaries for setting up gainful selfemployment ventures. (b) Development of Women and Children in Urban Areas (DWCUA) - Special incentives to urban poor women who decide to set up self-

23 303 employment ventures in a group. Such groups may take up any economic activity suited to their skill, training, aptitude and local conditions. The percentage of women beneficiaries under the SJSRY Scheme shall not be less than 30 per cent. SCs/STs must be benefited to the extent of the proportion of their strength in the local population. A special provision of 3 per cent shall be made for the disabled under the scheme. The scheme will be monitored by District Level Consultative committee and the State Level Banker's committee at their periodical meetings. Sampoorna Grameen Rozgar Yojana (SGRY) The Sampoorna Grameen Rozgar Yojana (SGRY) was announced by the Hon'ble Prime Minister on 15 th August, The new programme was launched on 25 th September, The objective of this Yojana is to ensure that security and gainful employment and also to strengthen rural infrastructure. It is a Centrally sponsored scheme and being implemented with the total outlay of Rs. 10,000 crores. About 100 crore mandays of employment are envisaged to be generated every year in the rural areas through the SGRY. The fund allocation for the scheme was Rs. 515 crore during and Rs core has been releasecd up to March 31, With regards to the number of beneficiaries during , 9,47,390 urban poor were assisted to set up individual/ group micro enterprises and 14,84,209 urban poor were imparted skill training under SJSRY as per the progress reports received upto the end of March 31, 2009.

24 304 Swarn Jayanti Gram Swarozgar Yojana (SGSY) The Swarn Jayanti Gram Swarozgar Yojana (SGSY) was started on 1 st April, 1999 for the self-employment of rural poor. Basic object of SGSY is to bring the assisted poor families (Swarozgaris) above the poverty line by providing them income-generating assets through a mix of bank credit and governmental subsidy. It covers all the aspects of selfemployment of rural-poor financial assistance, training, selection of key activities, infrastructure build up, technology and marketing support. The SGSY emphasizes upon the assistance to Swarozgaris for those activities which have been identified and selected as the key activities in terms of their economic viability in the area. Families below the poverty line (BPL) in rural areas constitute the target groups of the SGSY. The SGSY is being implemented by the 'District Rural Development Agencies' (DRDAs) with the active involvement of Panchayat Raj Institutions (PRIs), Banks, Line Departments and Non- Government organization (NGOs). The Swarnjayanti Gram Swarozgar Yojana (SGSY) is financed on 75:25 cost sharing basis between the centre and states. Upto March 2009, 34 lakh self-help groups (SHGs) had been formed and lakh Swarozgaris have been assisted with a total outlay of Rs. 27, crore. Employment Assistance to Special Categories As on 30 th June 2006, number of women on the live register of employment exchanges was 11,305.5 thousand (27.8% of total number on live registers). In the year 2005, these exchanges provided employment to 32.4 thousand women. Number of candidates belonging to scheduled castes, scheduled tribes, Other backward classes on the live registers of

25 305 employment exchanges was 64,70,22.18 and lakh respectively on 31 st Dec,2004. In respect of disabled Job-seekers, the number of candidates on the live registers of employment exchanges was thousand as on and the number of placements provided during the year 2004 was 3.4 thousand. Government is provided a number of specific services for providing employment to special categories also such as: coaching-cum-guidance Centres for SCs/STs, special coaching scheme for SCs/STs, introduction of new courses in existing coaching coaching-cum-guidance centres for SCs/STs special employment exchange for physically handicapped, vocational rehabilitation, centres for handicapped, assistance to disabled ex-servicemen and dependents etc. Prime Minister s Rozgar Yojana (PMRY) Prime Minister s Rozgar Yojana (PMRY) for providing selfemployment to the educated unemployed youth of economically weaker sections has been in operation since October 2, 1993.The scheme aims at assisting the eligible youth in setting up self-employment ventures in industry, services and business sectors. The scheme intends to cover both the urban and rural areas. Under this scheme, financial assistance is provided for all economically viable activities. Self-Help groups (SHGs) can also be considered for assistance. Loan may be provided as per individual eligibility. Preference would be given to weaker sections including women. Till the year , total applications received under the scheme were 21,612 out of which 5,016 applications were accepted, a sum of Rs.3, crores was sanctioned and 5,526 beneficiaries were trained.

26 306 National Rural Employment Guarantee Act (NREGA). National Rural Employment Guarantee Act (NREGA) was notified on September 7, 2005 and launched on February 2, 2006 in 200 most backward districts in the first phase. It was expanded to 330 districts in the second phase during The remaining 266 districts were notified on September 28, 2008 and the scheme has now been extended to all the districts of the country.four years after it was introduced, the Government decided to rename it as Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) on 2 nd October The main object of this act is to enhance livelihood security in rural areas by providing at least 100 days of guarantee wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work. Main Features of the Act Adult members of a rural household, willing to do unskilled manual work, may apply for registration in writing or orally to the local Gram Panchayat. The Gram Panchayat, after due verification, will issue a job card. The Job card should be issued within 15 days of application. A job card holder may submit a written application for employment to Gram Panchayat, stating the time and duration for which the work is sought. The minimum days of employment have to be at least fourteen. The Gram Panchayat will issue a dated receipt of the written application for employment.

27 307 Employment will be given within 15 days of application otherwise daily unemployment allowance for per the act, has to be paid. Liability of payment of unemployment allowance is of the States. Work should ordinarily be provided within 5 Km radius of the village. Wages are to be paid according to the Minimum Wages Act, 1948 for agricultural labourers in the States. Equal wages will be provided to both men and women. At least one third beneficiaries shall be women who have requested work under the scheme. Work site facilities such as creche, drinking water, shade have to be provided. A 60:40 wage and material ratio has to be maintained. Social audit has to be done by the Gram Sabha. Grievance redressal mechanisms have to be put in place for ensuring a responsive implementation process. All accounts and records relating to the scheme should be available for public scrutiny. The National Rural employment Guarantee Scheme will be open to all rural households in the areas notified. This entitlement of 100 days per year can be shared within the household i,e., more than one person in a household can be employed (simultaneously or at different times). More than 4.47 crore households were provided employment in This is a significant jump over the 3.39 crore households covered under the scheme during Out of the crore

28 308 person days created under the scheme during this period, 29 per cent and 25 per cent were in favour SC and ST population respectively and 48 per cent of the total person days created went in favour of women. An allocation of Rs.30,100 crore has been made in the interim budget for as against Rs. 16,000 crore in for NREGS or convenience. Key stakeholders have been divided at Village level, District level, State level and Central level. Awareness generation through Information, Education and Communication (IEC) for people to know their rights under the Act, effective communication of information about the Act and scheme is essential. Section 16(3)(4) of the Act states that every Gram Panchayat shall prepare a development plan and forward it to the Programme Officer for security and preliminary approval prior to the commencement of the year in which it is proposed. As per schedule 1 of the Act, focus of the National Rural Employment Guarantee Scheme(NREGS) shall be on the following works: 1)Water conservation and water harvesting; 2)Drought proofing, including afforestation and tree plantation; 3)Irrigation canals, including micro and minor irrigation works; 4)Provision of irrigation facility, plantation, Horticulture and land development on the land owned by households belonging to the SCs/STs, or the beneficiaries under Indira Awas Yojana/BPL families; 5)Renovation of traditional water bodies; 6)Flood-control and protection works, including drainage in water

29 309 logged areas; 7)Rural connectivity to provide all-weather access; Imapact of Economic Liberalisation on Employment Generation of viable employment in an economy is a necessary condition for its growth and development.for this purpose, Indian government introduced many economic reform measures in the form of globalisation, liberalisation and privatisation in July As a result of these measures, subsidies to agriculture were reduced, fiscal deficit was controlled, economy was open up for global market, restrictions and controls were removed, public sector has to shrink and private had to grow. Efficiency and competition are the key words in economic reform measures. Highlights of the report on the 62 nd round survey on employment and unemployment (conducted between July, 2005 to June, 2006). The survey was spread over 4,798 villages and 5,125 urban blocks covering 78,879 households(37,975 in rural areas and 40,904 in urban areas) and enumerating 37,7377 persons(18,6571 in rural areas and in urban areas). Employment and unemployment rates were measured with three different approaches that is usual status with a reference period of one year, current weekly status with a one week reference period and current daily status based on the daily activity pursued during each day of reference week. Labour Force and Work Force According to the usual status (PS+SS), about 56 percent of rural males and 31 percent of rural females belonged to labour force. The corresponding proportions in the urban areas were 57 percent and 15 percent, respectively.

30 310 About 41 percent of the population in the country was employed under usual status (PS+SS). The workers participation ratio (WPR) was 43 percent in the rural areas and 35 percent in the urban areas. In rural India, more than half of the usually employed (all workers) were self employed-57 percent among males and nearly 62 percent among females. The corresponding figures in urban India were 42 percent for males and 44 percent for females. In rural India, among all usually employed, about 65 percent of the males and 81 percent of the females were engaged in the primary sector (excluding mining and quarrying). Corresponding figure in 1983 were 78 and 88 percent, respectively. In rural India, there has been a gradual increase in the proportion of males engaged in secondary sector (including mining and quarrying) - from 10 percent in 1983 to 17 percent in for males and 7 percent to 12 percent for females. The proportion has also increased in the territory sector- from 12 percent to 18 percent among males and from 5 percent to 7 percent among females. Unemployment and Underemployment Rates The unemployment rate was not high for rural areas if the usual status approach is followed it was around 2 percent (for males nearly 3 percent and for females nearly 2 percent). In urban areas the unemployment were higher than those in the rural rates, except

31 311 for the current daily status approach in which the unemployment rates for rural and urban areas were almost equal (nearly 8 percent). Among educated persons, (with education level of secondary and above), in the age group years, the unemployment rate in rural and urban areas was 12 percent and 16 percent respectively, the rate was much higher than that for those with educational level middle or below. Underemployment rate was 5 percent in the rural and 2 percent in urban areas. Compared to males, the problem of underemployment was more serious among the usually employed females, particularly in the rural areas. Among them, the underemployment rate was as high as 18 percent in the rural and 8 percent in the urban areas. Employment in Organised and Unorganised Sectors Employment in Organised Sector Since the inception of liberalisation policy, the rate of employment generation per annum in the organised sector which includes both the private as well as public sectors has gown down. This has primarily happened due to the decline of employment in organised public sector. Employment in the establishments covered by Employment Market Information System of the Ministry of Labour grew at 1.20 per cent per annum during but decelerated to 0.12 per cent per annum during However, the latter decline was mainly due to a decrease in employment in public sectors establishments, whereas the private sector had shown acceleration in the pace of growth in employment from 0.44 per cent to 0.92 per cent per annum. With the exception of manufacturing sector, employment growth rate in almost all the sectors

32 312 has dropped. All this proves that the post reform period has, so far, not succeeded in pushing up the employment opportunities in the organised sector. Employment in Unorganised Sector As per the National Commission for Enterprises in the Unorganised Sector (NCEUS), based on the data from NSS 55 th round survey on the employment and unemployment, the estimated total employment in the country during was million and among them the estimated informal sector workers were million. The estimates as per 61 st round survey during were million and million respectively. As per both the surveys, more than 86 per cent of total employment was in the informal sector. Thus, unorganised sector has grown not only in volume, its per annum growth rate has also gone up. Employment in Public Sector Liberalisation and Globalisation process have affected negatively the employment generation in India. The Public sector provided employment to million people in March 1971 which increased to million March 1991, showing an increase of 71.7 percent during 20 years before the process of economic reforms was started. This rate of increase in employment generation turned to be negative during next 15 years(the era of economic reforms).total employment provided by public sector came down to million persons in March 2005,implying a fall of 5.5 percent. Employment in Private Sector Private sector shows a little positive picture about the impact of economic liberalisation on employment. This sector was providing

33 313 employment to 6.73 million persons in March 1971 which increased to 7.68 million in March 1991, showing an increase of 14.1 percent during the period of 20 years before the start of process of economic reforms. Total number of persons employed in private sectors increased to 8.45 million in March 2005, implying an increase of 10 percent during the period of 15 years after the start of process of economic reforms. The performance of private sector in generating employment opportunities has been little better than that of Public sector after the start of the process of economic reforms. However, this performance of Private sector from the point of view of employment generation has no reason to be happy because private sector comprises only about 1/3 part of total organised sector. Morever, this has also been acquired at the cost of Public sector s disinvestment programme and privatisation and not due to only globalisation. Employment in Service Sector Process of economic development involved a safety of employment to primary and tertiary sectors.it holds true in Indian economy also. In 1951, tertiary (services) sector contributed only 29.0 percent of GDP. In , this contribution rose to 39.6 percent and further in , it rose to 49.2 percent. This process is still continuing and in , this contribution was 55.7 percent. In 1951, the ratio of contribution these three sectors to GDP were 56:15:29 which changed to 20:24:56. The service sector is rising more rapidly than industries, whereas the share of agriculture has declined. So far as the number of employed persons in service sectors is concerned, we find that in public sector, the number of employed persons in service sector has been continuously declining, particularly since the year 2000 whereas in private sector, this number has been continuously

34 314 increasing. In total, taking both the sectors together, the position is almost stagnant. It has increased from lakh in 1991 to lakh in 2007, that too in a volatile manner. Overall it may be concluded that liberalisation has not helped much in increasing employment opportunities in service sector also Impact of Disinvestment of Public Sector Units on Employment Disinvestment is a process of transferring public ownership to private, either partially or fully, through the sale of equities. It aims at reducing the financial burden of the state, to fill the fiscal deficit and to restructure the public enterprises. In India, disinvestment phase started only in the early 90s. On 30 th November, 1999 government set up a Department of Disinvestment (DOD). In , disinvestment receipts amounted to Rs.3,038 crores. In the first decade of to , total receipts of government on this head amounted to Rs.20,508 crores against the target of Rs.54,300 crores. During the remaining nine years from to , total receipts of government on this head amounted to Rs.89, 947 crores. In the year , the government receipts were highest in a single year since the start of the process of liberalisation, Rs.45, 750 crores. The proceeds of disinvestment are put in the Consolidated Fund of India from which the budget deficits are met. This strategy of Government is being bitterly criticized and the country is paying enormous cost to meet the budget deficits by fleecing the healthy PSUs, even the Navaratnas.