ECONOMIC HIGHLIGHTS
New Delhi, 11 May 2006
A Challenging Task
Creating
Even Job Opportunities
By Dr. Vinod Mehta
The UPA Government at the Centre had promised to
create more jobs under its Common Minimum Programme (CMP). It is a formidable
task and the Government seems to be quite serious about the whole thing.
However, till date no serious effort has been made to do it except that the Bharat
Nirman Programme has become operational.
Generally speaking, increase in the level of
investment generates more jobs in the country. But it does not guarantee
generation of more jobs on its own.
Moreover, in a vast country like India
job opportunities need to be created evenly all over India, especially in the rural
areas with a view to checking undesirable migration to cities.
It is common knowledge that 74% of the population
lives in rural areas. In urban areas the problem of unemployment is not acute;
it is serious mainly in rural areas. The
sheer size of the urban population in metropolitan cities like Delhi, Mumbai, Kolkata and Chennai provides many job opportunities, more so in
the unorganized sector. There is so much demand for various kinds of labour and
services that anyone looking for a job can find some work even if it may not be
to one’s liking. The labour that migrates to these areas is bound to find some
work. It is a different matter that unregulated migrations lead to many
problems in urban areas like emergence of slums, increase in crime rate and so
on.
Therefore, the real challenge of generating
employment is in smaller towns and villages where the size of the population is
so small that there are hardly any opportunities for generating remunerative
employment. Setting up of factories or small businesses
does not make any economic sense. Since there are no factories or workshops in
these areas, the demand for labour is almost nil. Again the total population of
the area is so small that it does also not make any economic sense to provide
services or generate some kind of a work in these areas.
According to the Census figures, out of a total of
5,88,781 villages, 2,90,093 i.e. about 50% have population less than 1,000. The number of villages having
population between 1,000-2,000 is 1,14,395; the number of villages with
population between 2,000-5,000 is 62,915; for villages with population between
5,000-10,000, it is 10,597 and the number with over 10,000 population is 2,779.
It means that for 70% of the villages the size of the population is less than 2,000.
What impact can it have on employment generation? For one you cannot make massive investments as it would not be able to reap
any economies of scale. It will not be able to supply the required skilled or
semi-skilled labour. The demand for services from the villagers will not be
enough to provide job opportunities. This means that the demand factor will
also not work. Thus there will be almost nil opportunities for young people of
these villages to find jobs even in the unorganized sector. This problem is
acute in the North-East.
In other countries, the rural population is small,
while it is very large in urban areas; less
than 25% of the population is in rural areas. A large number of jobs are being
created in the service sector, followed by the manufacturing sector. (Even
though some of the services are being outsourced by these countries, it has
also been noticed that some of the affected employees are also migrating to the
developing countries.) Thus, the employment opportunities are relatively more
in these countries than in a country like India where the population is
overwhelmingly rural. It is a sheer challenge how to generate employment in
areas where the population is less
than 2000.
Therefore, the Government will have to have some kind
of a strategy to generate employment in these villages in the coming years. One
way to overcome this situation would be to club these villages into viable
economic zones on the basis of some economic criteria before making investment
in these areas. Most of the activities may be centred around food processing of various agricultural products including
milk and milk products and smaller workshops, production units etc. For
instance, the Government can help these villages to start food processing and marketing cooperatives, start small repair
and maintenance workshops to attend to repair of mechanical equipments, to set
up cold storages etc., which in turn will raise employment opportunities for
the local people both in the organized as well as the unorganized sector.
The second equally important point is to link all
these villages with towns and metropolitan cities with all-weather good quality
roads. This will help the rural people from these villages to take their
products to nearby towns and metropolitan cities where there is a market for
their products. Good roads can
facilitate the to and fro movement of
labour on daily basis to nearby towns where they are bound to find some
work. Once these villages are linked by
good roads many of the companies in the private sector may find it economical
to procure their raw materials or outsource their work from these places. They
may even come forward to set up small units.
Large-scale investment does not mean that one puts
big money and sets up bigger projects. It also means that one spreads out
investment all over and help people to engage in meaningful economic activity.
Food for work programme is not just enough. What is needed is gainful
employment on a sustained basis. This requires the Government to ensure easy
movement of agricultural and other products from one place to another and easy
to and fro movement of labour from village to nearby towns.
In the long run, however, the emphasis will have to
shift from creation of jobs in the agricultural sector to creation of jobs in
manufacturing and service sector. The experience of developed countries shows
that more jobs are created in the non-agricultural sector. It has been noticed by economists that the
Indian service sector is expanding very fast which defies the experience of
other developed countries. But that is
the truth. Any way, the creation of jobs
in the rural sector can at best be a medium term solution to unemployment
problem; the emphasis will have to be creation of jobs in the manufacturing
sector in the long run.---INFA
(Copyright,
India News and Feature Alliance)
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