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Strategies for Full Employment in India. Uncommon Opportunities: Roadmap for Employment, Food & Global Security November 21, 2004 International Center for Peace & Development, USA The Mother’s Service Society, Pondicherry. Unemployment. 1993-94 20M 1999-00 27M

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strategies for full employment in india

Strategies for Full Employment in India

Uncommon Opportunities: Roadmap for Employment, Food & Global Security

November 21, 2004

International Center for Peace & Development, USA

The Mother’s Service Society, Pondicherry

unemployment
Unemployment
  • 1993-94 20M
  • 1999-00 27M
  • Twice as high for lower consumption classes
  • On daily basis 35M
  • Youth Unemployment 13%
    • Kerala 35%
natural employment generation
Natural Employment Generation
  • New entrants to labour force ` 7-8M/yr
  • Urban migration 1M/yr
  • Agriculture employment is flat
  • Less growth in unemployment -1M/yr
  • Natural job generation 7-8M/yr
  • The absence of social unrest and the fact that urban migration continues and urban unemployment does not rise enormously indicate the surpluses are being absorbed.
  • This is unorganized, unconscious process akin to education without schools

Make the unconscious process CONSCIOUS

how society stimulates employment
How society stimulates employment
  • New products
  • New services
  • Growth in demand
  • Technological innovation
  • Higher quality &/or productivity
  • Organizational innovation
  • Higher skills
  • Better access to information
  • Increased speed
  • Legislation & law enforcement
  • Administrative responsiveness
  • Environment/health consciousness
  • Change of attitudes
three approaches to employment generation
Three Approaches to Employment Generation
  • Expand existing activities
    • Nursery schools, tutorial institutes, English teaching
  • Borrow from other countries
    • Credit rating & collection agencies
    • Trade shows & network marketing
    • Health clinics
  • Promote culturally compatible activities
    • STD & chit funds
    • Marriage halls
    • Mini-power plants
    • Rural information centres
    • Contract farming agencies
available modes of action
Available Modes of Action
  • Increase access to credit
  • Provide incentives for new initiatives
  • Strengthen or enforce legislation
  • Impart training
  • Use insurance as a stimulus
  • Publicize opportunities in the media
where are the untapped potentials
Where are the untapped potentials
  • Raise farm productivity
  • Renewable energy
  • Agro-industrial linkages
  • Service sector
  • Employable skills
  • Application of IT
prosperity 2000 strategy
Prosperity 2000 Strategy
  • Agriculture as engine for industrialization & employment growth
  • Shift focus from meeting minimum production needs to maximumizing profit per unit land & water
  • Projecting market growth based on nutritional requirements
  • Raise productivity of soil & water
  • Shift to commercial crops which absorb more labour
  • Develop industry linkages with industries
  • Create 4.5 million direct & 5.5 million indirect employment opportunities per annum
low farm productivity results in
Low farm productivity results in
  • High unit cost of production
  • High priced food
  • Low farm incomes & purchasing power
  • Low labour absorption
  • High water consumption/unit of produce
  • Limited export potential & threat from imports (e.g. cotton)
technology strategies
Technology Strategies
  • Raise crop yields
  • Raise water productivity
  • Improve post-harvest storage & transport
  • Expand & upgrade processing industries

Raising productivity can create millions of on-farm and off-farm employment opportunities.

horticulture
Horticulture
  • Labour content 6 times cereals
  • Generates 10-30 times earning / unit area
  • Filling India’s nutritional gap requires 40% growth
  • Add 4M ha horticulture to raise production 40%
  • Generate 8 million jobs
food processing
Food Processing
  • Improve storage & processing to reduce Rs 70,000 crores in crop losses
  • Global share of processed food exports is rising
  • India processes only 2% fruits & vegetables vs. Thailand 30%, Brazil 70%, Philippines & Malaysia 78-80%)
  • India projected to process 10% fruit & veg by 2010
  • Industry directly employs 1.6M
cotton textile industry
Cotton & Textile Industry
  • India is 3rd largest producer of cotton
  • Domestic demand projected to grow 70% by 2010
  • Export demand projected to triple by 2010
  • Double productivity of cotton
  • Double area under irrigated cotton
  • 12 million additional jobs in textile industry
forestry herbs medicinal plants
Forestry, Herbs, Medicinal Plants
  • 100 M rely on forests for main source of livelihood, including half of India’s 70M tribals
  • Objective to raise forest cover 50% in 10 ys
  • Introduce corporate contract farming with bonded performance guarantees & assured employment for local population
fisheries
Fisheries
  • World seafood market doubled in the 1990s
  • India’s marine & inland fisheries employ 6M
  • 1/3rd of India’s marine fishery potential untapped
  • China full-time employment in rural aquaculture
    • 1989 – 1.5M
    • 1997 – 3.3M
  • Shrimp farming -- 4 direct & 4 indirect jobs per ha
    • 1999 – 161,000 ha generates employment for 1.3M
    • Additional 120,000 ha would create 1M jobs
dairy
Dairy
  • Rs 100,000 crores by 2005
  • India is largest and lowest cost producer
  • 70M dairy farmers
  • Cooperatives provide employment for 11M families
  • Potential for 42M jobs
organization for rural prosperity
Organization for Rural Prosperity
  • Self Help Groups
  • Contract Farming
  • Rural Information Centers
  • Farm Schools
self help groups
Self Help Groups
  • 1 million created in 3 years
  • 15 million members benefit
  • 90%+ repayment of loans
  • Mostly for non-farm activities
  • Commodity-wise SHGs for agriculture
  • Appachi Foundation & ICICI – 60 SHGs for cotton growers in Tamil Nadu
contract farming
Contract Farming
  • Successful Indian model -- sugar mills
  • Organize SHGs of farmers
  • Role of the Contractor
    • Provide quality inputs
    • Arrange credit with banks
    • Arrange crop insurance
    • Deliver extension services
    • Tie-up market with industry
    • Operate farm schools
farm schools cum extension
Farm Schools cum Extension

Objective: double farm yields in 3 years

  • Lead farmers act as paid field training & extension staff for the contractor
  • Lead farmers run Farm Schools on village lands
  • Demonstrate methods on farmers’ lands
  • Train farmers & disseminates information
  • Operate or link to Village Information Centre
  • Link to soil test labs
  • Link to agro-service centres
rural it knowledge centres
Rural IT Knowledge Centres
  • Mission 2007 – 500,000 village centres
    • Can create 5 jobs per centre
    • Can charge for services
  • Soil analysis -- expert system for advice
  • Multi-media farm training
  • Input supply information
  • Market information
  • Educational information
  • Health information
  • E-government services
  • Other vocational training
ag enterprises policy issues
Ag Enterprises -- Policy Issues
  • On-farm training system
  • Enforce sanctity of contracts
  • Expand access to credit through SHGs with group guarantees & post-dated checks, including present defaulters.
  • Extend powers of Revenue Recovery Act to ensure repayment by SHGs.
  • Tax credits for contractors who raise farm productivity
  • Strengthen crop insurance program
  • Penalties for false documentation by officials
  • Penalties for adulteration of ag inputs
  • Railways to provide refrigerated storage & transport
service sector
Service Sector
  • USA: provides 80% of jobs
  • India:
    • Grew by 60M jobs in 18 yrs
    • Rose from 25% to 32% of total employment
  • High potential fields
    • Tourism
    • Transport, storage, communication
    • Education
    • Health care
    • Financial services
    • Internet-based activities
internet based self employment
Internet-based Self-Employment
  • Desktop publishing
  • Web design
  • Web research
  • E-books
  • Translation
  • Technical writing
  • Engineering & technical services

Opportunities from Rs 5000 to 1 lakh per month

vocational skills
Vocational Skills
  • 50% of firms in developing and industrialized countries report severe shortage of skilled workers.
  • India’s problem is not lack of employment opportunities but lack of employable skills.
  • Skills create employment and self-employment opportunities.
vocational skills gap
Vocational Skills Gap
  • Only 5% of India’s workforce (20-24 years) have vocational training compared with 28% in Mexico and 96% in Korea.
  • By 2010 major labour shortages will emerge in the industrialized nations forcing movement of both manufacturing & service jobs to wherever the skills are best.
  • Upgrading skills essential to tap global markets
vocational training in india
Vocational Training in India
  • 4200 ITIs
    • 1,654 government run
    • 2,620 private
  • Courses offered
    • 43 engineering & 24 non-engineering trades
  • Capacity – 6.3 lakhs
  • State enterprise programmes – 1.7 lakh
  • Including agriculture & other – 20 lakh
three models
Three Models
  • Farm Schools in every revenue village
  • Vocational Schools
  • Computerized & Televised Vocational Training
vocational schools
Vocational Schools
  • Promote vocational institutes at block and district level
    • 5000 govt
    • 50,000 private
  • Conduct exams for every skill as for drivers licenses
  • Certify approved training centres, e.g. BPO
  • Provide scholarships & incentives for trainees
computer based learning is twice as fast @ half the cost
Computer-based learning is twice as fast @ half the cost
  • Multimedia
  • Interactive
  • Immediate Feedback
  • Self-paced learning
  • Eliminates need for trained teachers
  • Responds rapidly to changing skill needs
  • Uniform testing
computerized vocational training
Computerized Vocational Training
  • Establish 1 lakh CVT Institutes like internet cafes
    • 50,000 in private sector
    • 50,000 training centres at engineering and arts colleges, ITIs, polytechs, high schools, NGOs, etc.
  • Partnership with industry to develop multimedia training software
  • Provide training to a minumum of 4 million students per annum
  • Government certification of courses
  • Generate self-employment opportunities for 50,000 entrepreneurs
cvt job shops
CVT Job Shops
  • Privately owned, self-employment
  • Each centre with 1 to 10 computers
  • Stocked with a library of training software
  • Training material on CD-Rom format
  • Fees based on an hourly rate
cvt job shop assumptions
CVT Job Shop: Assumptions
  • Three computers per Job Shop
  • 20 training programmes per Job Shop
  • Each computer utilized 300 hours per mo
  • Operating expenses for rent, two paid employees, phone, electricity may range from Rs 15,000 to 20,000 per month
cvt job shop economics
CVT Job Shop: Economics
  • Capital investment Rs 1.5 lakh.
  • Cost of operations per computer hour = Rs 20 / hour.
  • Cost of amortising of computers and software over two years = Rs 14 per hour
  • Average cost of training = Rs 35 per hour
  • Average retail price of training = Rs 50 per hour
  • Net profit = Rs 15 per hour or Rs 1.5 lakhs / yr
  • 50 hours of computerized vocational training, equivalent to about 250 hours of classroom training, would cost the student only Rs 2500.
training software economics
Training Software: Economics
  • Cost Rs 50 lakhs per course
  • Retail price Rs 1000 per set
  • Sale of 10,000 sets generates Rs 50 lakhs profit
  • Offer 50% government subsidy for development of approved courses
cvt action plan
CVT Action Plan
  • Delivery CVT through all state-owned engineering colleges, ITIs, Polytechnics, liberal arts colleges, high schools, other institutions.
  • Provide financial assistance/ incentives under Central Government self-employment schemes to promote private training institutes.
  • Encourage financial institutions to provide loans to entrepreneurs.
  • Negotiate with computer software companies to develop a wide range of vocational training courses.
  • Recognized institutional authorities to certify course contents.
  • Finance bulk purchase of approved training software with 50% subsidy to minimize the cost of training.
  • Train entrepreneurs to set up/manage private institutes.
  • Provide scholarships to low income youth to cover training fees.
it incubator business parks
IT Incubator Business Parks
  • Computerised vocation training
  • Computerised tuitions institutes
  • Computerised language training
  • Software training
  • Video-conferencing services
  • High speed data transfer services
  • Web, graphic and animation design services
  • Computer repair and maintenance services
  • International Internet telephony
  • Computer hardware parts manufacturing and assembly
  • Customer and technical support call centres
  • Back office processing
  • Medical transcription
  • Digital photography, scanning and image processing
  • Internet research services
  • Accounting services
  • Computerized testing laboratories
who creates enterprises
Who creates enterprises?
  • Skilled experienced workers leaving existing jobs create enterprises
    • Machinists
    • taxi drivers
    • hotel servers
    • bus cleaners
    • Printers
    • tailors
  • Do entrepreneurial training programmes work?
promoting entrepreneurship
Promoting Entrepreneurship
  • Extend bank credit & seed capital to employees with 5 years experience
  • Require training & certification for new enterprises to reduce failure rate
  • Existing entrepreneur to sign as guarantor
  • Insurance companies can ensure loans based on qualifications
issues for study
Issues for Study
  • Natural job creation
    • How many jobs are being created?
    • In which sectors & fields?
    • By what process?
    • How can the natural process be magnified and accelerated?
    • How are rural migrants absorbed in the cities?
  • Occupational demand
    • Identify high growth occupational categories at all levels
    • Measure growth in pay/income levels by category
  • Emerging Activities
    • Identify emerging occupations in all sectors,
      • Farm managers & Soil technicians
      • Servicing for cell phones, ACs, computers, VCDs, etc.
      • Home delivery, floor cleaner, masseuse
  • Skills for national development
    • Compile a complete list of skills needed for India’s development to next higher level
  • Job creation in other countries
    • Study which job categories grew rapidly in US during a comparable period?
  • Efficacy of Entrepreneurial Development Programmes