Note on Employment trends after liberalization

Indian constitution under Article 43 of chapter on directive principle of state policy directs the state to ensure living wage for workers. The constitution through Art 43A also wants state to ensure participation of workers in management of industries. Despite more than 60years of Indian independence both the directives have largely been ignored by successive governments in India. This has resulted in living wage still being distant dreams for tens of crores of workers in the country. Policies of Liberalization, Globalization and Privatization under diktat of International finance capital was justified by the ruling classes in India on the contention that it will lead to economic growth and will thus assist in job creation in the country. These neo liberal policies have largely succeeded only in generating jobless growth in the country. During the first decade of liberalization the unemployment rate in India has increased significantly since 1993-94 and was above 7.3 per cent in 1999-2000 compared to 6.0 per cent in 1993-94 on Current Daily Status basis. (Source: http://planningcommission.nic.in/aboutus/committee/tsk_sg10m.pdf).

 It is apprehended that now these rates have increased further. The total volume in terms of person unemployed has touched about 27 million in 1999-2000. Nearly 74 per cent of them are in the rural sector and 60 per cent among them educated. In some States and in certain sections of labour force, the unemployment rate has increased to more than 25 per cent. The rising unemployment is primarily an outcome of a declining job creating capacity of growth, observed since 1993-94. The employment growth fell to 1.07 per cent per annum (between 1993-94 and 1999-2000) from 2.7 per cent per annum in the past (between 1983 and 1993-94) in spite of acceleration in GDP growth from 5.2 per cent between 1983 and 1993-94 to 6.7 per cent between 1993-94 and 1999-2000. It means that the capacity of job creation per unit of output went down about three times compared to that in the 80s and early 90s. This is primarily because of-

(i) The policy of shedding excess labour that this sector is carrying in order to meet the growing market competition, often known as rightsizing;

(ii) The trend towards increasing capital intensity per unit of output; and

(iii) The pattern of growth moving in favour of capital intensive sectors.

The pattern has largely continued in second decade of liberalization. Since then, India seems to have managed to achieve and sustain high growth, except for the brief downturn during the global crisis. Yet the recently released results from the 2009-10 (66th Round) NSSO survey are disconcerting. Over the five-year period 2004-05 to 2009-10 employment declined at an annual rate of -0.34 per cent in rural areas, and rose at the rate of just 1.36 per cent in urban area. The agrarian distress resulting in suicides by lakhs of farmers in last two decades seems to be prima facie the primary reason for fall in employment in rural areas.  In the aggregate, the volume of principal and subsidiary status employment rose by a negligible 0.1 per cent. (Source http://www.thehindu.com/opinion/columns/Chandrasekhar/article2153082.ece?css=print).

According to NSSO data, there are nearly 30 million more young people putting themselves through more education in the hope of being able to access better jobs. The total numbers of such youth in secondary and tertiary education is at least 55 million. Soon, perhaps even within the next five years, these young people will enter the job market and expect to access employment that is at least minimally commensurate with the efforts they have put in to receive more education. But in the previous five-year period, all forms of employment (regular and casual, paid work as well as self-employment) only increased by around 28 million. If this sluggish pace of job creation continues, there will be even larger gaps between aspiration and reality in India's labour markets. That such a combination is a recipe for enhanced social tensions and political unrest is well known and has been reinforced by recent experience across the world. If only for that reason, surely the government should sit up to take notice of its own data? The dangerous trend on employment front is also collaborated by data on employment exchanges which are given as follows-

The salient features of the trends of data on employment exchanges are given as under:

 As on 31st December 2009, 381.52 lakh persons were registered with employment

 exchanges as compared to 391.15 lakh as on 31st December 2008.

 On an average, around 57 lakh job seekers get registered with the Employment

exchanges per year during the last ten years.

 The total number of vacancies notified during each of the years between 2000 and

2009 varied between 2.2 and 5.7 lakh. The highest (5.7 lakh) was in 2008 and

lowest (i.e. 2.2 lakh) was in 2002.

 Number of vacancies notified to the Employment Exchanges has come down to 4.2 lakh in 2009 from 5.7 lakh in 2008.

 The placement, which was of the higher order of 3.05 lakh in the year 2008, has

dipped to 2.62 lakh in the year 2009.

 Out of the total number of vacancies (4.2 lakh) notified during 2009, around 63%

(2.62 lakh) were filled through the Employment Exchanges.

 Placement to submission ratio was only around 10.1% at the all- India level during 2009.

The profile of job seekers in terms of age group and education is given below-

Age-wise distribution of the job seekers on the Live Register (L.R.) for the years

2004-2008 the following: -

 Approximately 69 % of the jobseekers were up to the age of 29 years.

  The absolute number of job seekers in the age group of 20 to 39 years, which

was approximately 72.6 % of total number of job seekers in the year 2004, has

only marginally gone down to 72.2% in 2008.

 The number of job seekers in the age group of 30 years & above has

marginally increased during the period 2008 as compared to 2007. The

percentage of job-seekers in the age group of 30 and above to the total

number of job-seekers which was of the order of 30.1% in 2007 has also gone

up to 31.1% in 2008.

The major share of job-seekers awaiting jobs in the Employment Exchanges was

that of educated persons. Year-wise details of the educated job-seekers are given in

Table-5.

 Around 43 lakh educated jobseekers got registered themselves with the

employment exchanges during the year 2008.

 The percentage of educated job-seekers to the total job-seekers has increased

from 71.0 % at the end of 1999 to 74.8% at the end of 2008. This is an indicative

of the fact that over the years educational profile of jobseekers is continuously

improving.

 While educated Live Register is around 74.8 % of the total live register, educated

placement is around only 68.3 % of total placements.

 The maximum number of job-seekers (131.6 lakh i.e. 45 %) was educated up to

Xth.

 Higher Secondary and Under Graduate or XIIth pass accounted for 83.04 lakh

(28.4.%) and Graduate and above were 77.9 lakh (26.6 %).

 Among the Graduates and above educated, maximum number of jobseekers

(31.6 lakh, 40.5% of total Graduates) was from Arts discipline. Science and

science related subjects’ job-seekers number was comparatively less.

(Source: http://dget.gov.in/publications/ees/ees2010/Chapter-2.pdf)

The observation of Lourdes Beneria in 2001 paper which states that the processes of informalization of jobs observed during the past decades have affected both high and low-income countries. Starting at the micro level of the firm, it analyzes the factors in economic restructuring and globalization that tend to generate the growth of informal activities - resulting in a vicious circle of poverty and economic insecurity for an important proportion of the population (source http://www.ilo.int/public/english/protection/ses/download/docs/gender.pdf) has largely come true in Indian scenario. Globalization of economies promoted through American model of neo-liberal economic policies has largely resulted in casualization of jobs at worldwide level as brought out in following table-

			Trends	in
	Regions		informal sector in percentage in non-agriculture segment)
		1980-89		1990-99
	North	Africa	38.8	43.4
	Sub-Saharan	Africa	68.1	74.8
	Latin	America	52.3	56.9
	Asia		53	63
	Source:	Charmes,	2000	(estimates	based on national sources)

This trend has also been witnessed in India during the last two decades as organized sector continues to generate less than 10 percent of employment in the country. Due to roll back of government from providing social services like education, health, housing under diktat of neoliberal policies number of government jobs are regularly shrinking. Private sector despite all the incentives has not been able to generate commensurate jobs to compensate for loss of jobs in public sector. Due to this the share of labour in the gross value added has been declining consistently from 20.5 per cent in 1991-92 to 9 per cent in 2007-08. However, it is important to note, he said, that during the same time the profit rate of the manufacturing companies has increased from 14.6 per cent in 1991 to 53.8 per cent in 2007-08. This shows that that there has been reckless violation of labour laws for maximizing profit. Indian Labour Conference regularly emphasis on strengthening the enforcement of labour laws especially related to contract labour has largely fallen in deaf years as government allowed violation of labour laws across the country due to pressure from private sector for ex the recommendation of second National Labour Conference that contract worker who have complemented two years should be deemed permanent need to be implemented forthwith by the government.  Recommendation of Conference Committee on “Global Financial Downturn – Its Impact – Job Losses – Comprehensive Package for Protection of Labour Force etc” like strict implementation of labour laws on lay-offs, retrenchment, job losses, closures, the broad based social security including unemployment insurance should be devised, the scope of Public Distribution System be extended to all unorganized workers in terms of commodities and coverage etc (source : http://labour.nic.in/lc/43ilc/RecordNoteofDiscussionAmendedbyMOLE.pdf) need to be raised by working class movement to ensure some relief to toiling masses.

The above note stressed that unemployment situation has reached an alarming height affecting the social fabric in a big way making a fertile ground for all kinds of extremism, fundamentalism and divisive forces to make their way. In such a situation, ignoring the task of fighting against unemployment generating policy regime will be perilous for the democratic system as a whole. The working class movement has to take on the responsibility to mobilize all concerned to carry forward the struggle for 'Right to Work' for all through phased programme of countrywide action towards reversal of the employment regressive policy regime.