Rural employment strategies for India


The unprecedented commitment of the present Government of India to seriously address the need for employment generation is a propitious opportunity to implement strategies for generating full employment in the country. This report, which builds upon work done by the International Commission on Peace & Food in the early 1990s, confirms the potential to generate sufficient employment opportunities for all new entrants to the workforce as well as to absorb the current numbers of unemployed and underemployed. It includes strategies and policy recommendations designed to maximize the effectiveness of the Government's recently proposed initiatives for employment generation and rural prosperity. Implementation of these recommendations will be sufficient to generate 100 million additional employment and self-employment opportunities.

While many formal studies have been prepared to assess the growth and employment potential in India' formal private sector, less attention has been given to the conditions and strategies to promote rapid expansion and job creation in the rural and informal sectors. This report focuses on strategies to increase employment opportunities in India's informal sector, with emphasis on agriculture, agro-industry, rural services and related vocations. The report consists of three parts: an overview of employment in India, a business plan containing specific recommendations for implement┬Čation, and a detailed discussion of employment opportunities and strategies in agriculture.

The major findings and recommendations can be summarized as follows:

1. The Indian economy is already generating approximately seven million employment and self-employment opportunities per annum, almost all of them in the informal sector, but in there is a serious lack of accurate information on the types and numbers of these jobs. The most effective strategy for employment generation will be to provide the missing links and policy measures needed to accelerate this natural process of employment generation.

2. There is enormous scope for raising the productivity of Indian agriculture, doubling crop yields and farm incomes, and generating significant growth in demand for farm labour. The report present evidence to demonstrate that improving plant nutrition through micronutrient analysis and improving irrigation through deep chiselling of soil can result in a tripling of crop yields.

3. Rising rural incomes consequent to higher productivity will unleash a multiplier effect, increasing demand for farm and non-farm products and services, thereby stimulating rapid growth of employment opportunities in other sectors.

4. Indian agriculture is constrained by weak linkages between agricultural training and extension, crop production, credit, processing, marketing, and insurance. The report presents an integrated strategy for bringing together all these elements in a synergistic manner by

  • Establishment of village-based Farm Schools to demonstrate and impart advanced technology to farmers on their own lands.
  • Establishment of a network of sophisticated soil test laboratories capable of high volume precision analysis of 13 essential plant nutrients coupled with development of expert computer systems to interpret soil test results and recommend individualized packages of cultivation practices for each crop, location and soil profile.
  • Establishment of Rural Information Centres to act as a medium for transmission of soil test data and recommended practices, access to current input and market prices, and other essential information for upgrading agriculture.
  • Policy and legal measures to encourage contract farming arrangements between agri-business firms and self-help groups in order to increase small farmers' access to advanced technology, quality inputs, bank credit, processing, marketing and crop insurance.
  • Measures to strengthen farm credit and insurance programmes, including creation of linkages between crop insurance, crop loans, and farm school training to encourage farmers who seek credit and crop insurance to adopt improved cultivation practices.

5. In order to ensure ready markets for the crops that are produced, the report focuses on the potential for linking crop production with huge untapped markets and specific agro-industries, including energy plantations to fuel biomass power plants, bio-diesel from jathropa, ethanol from sugarcane and sugar-beet, edible oil from Paradise Tree, horticulture crops and cotton.

6. The report argues that the India labour force suffers from a severe shortage of employable skills at all levels and that intensive development of vocational skills will act as a powerful stimulus for employment and self-employment generation. In addition to Farm Schools to impart advanced skills in production agriculture, the report recommends establishing a network of government-certified, rural vocational institutes providing training and certification in hundreds of vocational skills not covered by the ITIs. In order to offset the shortage of qualified trainers and the costs of replicating institutions throughout the country, the report advocates creation of a national network of 'Job Shops' linked to the Rural Information Centres and offering televised multimedia training programmes and computerized vocational training programmes.

7. The report recommends that the National Commission on Farmers arrange for employment surveys to provide accurate information on the growing demand for different occupational categories, the natural rate of employment generation by category and skill level, and other issues required to promote full employment in the country.

PART I - OVERVIEW OF EMPLOYMENT IN INDIA

Profile of the Indian Workforce

  • Workforce: Although accurate measures of employment and unemployment are difficult in India's largely informal economy, the current labour force consists of approximately 400 million men and women.
  • Growth in Labour Force: It is estimated that the work force is currently growing by 7 million persons per year.
  • Sector-wise: Of these, about 56% are engaged in agriculture as their primary occupation which is down from 65% in the early 1990s. Another 13% are engaged in manufacturing and the balance are employed in the service sector, which has grown from 25% to 32% of total employment over the past two decades.
  • Organized vs. Unorganized: The organized sector provides less than 8% of the total jobs, about 3% in private firms and 5% in the public sector. The informal/unorganized sector is provides the other 92%.
  • Skills: Only 6-8% of India's workforce has received formal training in vocational skills, compared with 60% or more in developed and most rapidly developing countries.
  • Unemployment: Depending on the survey measure applied, unemployment is estimated to range between 25 and 35 million. Youth unemployment is 13%, but reaches a high of 35% in Kerala. Unemployment as a percentage of the workforce fell in the 1980s and rose slightly in the 1990s. Authoritative published data was not available to indicate trends after 2001-2.
  • Migration: According to sample survey estimates, approximately 27% of India's population are migrants, including those who move from one rural or urban area to another or between rural and urban areas. Approximately 57% of urban male migration is for seeking better employment opportunities. The net migration from rural to urban areas is approximately 2 million per annum, of which about 1 million may be job seekers.

Observations about Employment in India

Several significant conclusions can be drawn from this summary data:

1. High rate of 'natural' employment generation: In spite of a large influx of youth into the workforce, unemployment is not rising dramatically. This indicates that the Indian economy is generating a very large number of additional employment opportunities by natural processes that are not well documented or understood. An understanding of these processes is will assist the formulation of effective strategies to accelerate employment generation and eliminate the remainder of unemployment and underemployment in the economy. If the unconscious process of employment generation can achieve this much, surely a conscious understanding and application can accomplish far higher rates of job growth.

2. Urban employment: Since high rates of urban unemployment would almost invariably lead to rising discontent and violence, the relative stability of India's urban environment suggests that the urban economy is generating sufficient employment opportunities to absorb most new entrants and migrants from rural areas.

3. Mismatch between Education & Employment: While the number of employment opportunities is rising more or less as required to keep pace with the growth of the workforce, the type and quality of these opportunities does not match the expectations of many educated job seekers, which reflects inadequacies both in the type of employment generated and type of education being imparted to youth. Ironically, despite the surging number of graduates, many firms report difficulty in recruiting educated persons with the required work capabilities to meet the growth in demand for business process outsourcing, automotive component production and many other fields.

4. Gap in Occupational Skills: At the other end of the labour spectrum, it is increasingly difficult to obtain workers with basic skills in carpentry, masonry, electricals, mechanics, and many other trades. Although India operates a large vocational training system, it provides training to less than 2 million persons annually, which is grossly insuffici