For a smile on each face

With agriculture shrinking and its share in nation’s economy declining to 16 per cent, there’s need to wean away 100 million people out of agriculture, the biggest problem before the Government is the need to create alternative employment. Thankfully, part of the problem is being solved by the ambitious National Rural Employment Guarantee Scheme of the Government, as per which each person without a job is entitled to 100 days of employment at the rate of Rs 100 per day. That amounts to Rs 10,000 per year, which, according to rural experts, is a good sum in the context of Indian villages. The popularity of the programme can be gauged from the fact that farmers are complaining there is not enough labour left on the farm as a lot of them prefer to work under NREGS. 

Despite reports of corruption and siphoning off of funds appearing in media, the polity and the development sector is gung ho about the scheme. Aided with the Right to Information Movement, it’s proving a powerful tool in changing the lives of people. As activist Aruna Roy told a mediaperson, 30 Bhil families which used to migrate each year stayed back in Rajasthan because they had found employment under NREGS.

The Government too is in self-congratulatory mode over the scheme. Pranab Mukherjee highlighted the success of the programme in his Budget this year. We bring here his announcements with regard to NREGS:

“It is widely acknowledged that the National Rural Employment Guarantee Act, (NREGA) first implemented in February 2006, has been a magnificent success. During 2008-09, NREGA provided employment opportunities for more than 4.47 crore households as against 3.39 crore households covered in 2007-08. We are committed to providing a real wage of Rs100 a day as an entitlement under the NREGA. To increase the productivity of assets and resources under NREGA, convergence with other schemes relating to agriculture, forests, water resources, land resources and rural roads is being initiated. In the first stage, a total of 115 pilot districts have been selected for such convergence… I propose an allocation of Rs.39,100 crore for the year 2009-10 for NREGA which marks an increase of 144 per cent over 2008-09 Budget Estimates. 

The question here is, will the work under NREGS be confined largely to road construction and digging work for ponds, or can there be a shift to skilled occupations too? Pradeep Kashyap, Managing Director, Mart, feels that the hope for rural India lies in manual, unskilled jobs. He says construction sector, particularly the Indira Awas Yojana, will be a big employment generator. Given the shortage of 40 million homes, this could spur a major construction boom in villages and provide employment to villagers. Similarly, he says, the plan to connect every village with more than 500 people with all-weather roads will also convert into jobs for rural India.

On the question of skill-based jobs being generated, he says that besides the 100 million people who are already in need of being pulled out of agriculture, another 100 million people, who are at the moment 12-13 years old, will be added to the workforce in 5 years. “Skilling of 200 million people has never been done before. Job generation will happen in areas which require minimal skills.”

The moot question then is, will the new initiatives in education, healthcare, food processing and even microfinance, which has the capability of creating entrepreneurs, remain peripheral forces in job creation? As Kashyap says, jobs will be created in these sectors in unskilled roles, like guards, gardeners, caretakers etc.

Labour security
The other issue that the government has tried to address is the security cover for the unorganised sector. Ninety-three per cent of employment is in the unorganised sector. The social security net benefits only the seven per cent people in the organised sector, in the form of provident fund, pension etc.

Yet there’s no room for doubt now that the India Shining campaign of the former NDA regime, and the inclusive growth dram of the present-day UPA regime, will happen only when we have India smiling, that is when we bring comfort to the millions who are destitutes and who do not have the wherewithal to withstand the emergencies of life. There’s another reason for the urgency behind an all-encompassing social security net – when the informal sector employs the bulk of Indian population and contributes substantially (more than 60 per cent) to the GDP, it deserves its due in terms of benefits too. It is also crucial that if the country wants a shift in the mindset from government jobs to self-employment, security net will be an important factor in bringing about this shift.

In its 2006 report on Social Security for Unorganised Workers, the National Commission for Enterprises in the Unorganised Sector (NCEUS) brought home the following point: “The absence of a meaningful social security arrangement does not merely pose problems for individual workers and their families. It also has wider ramifications for the economy and society. From an economic point of view, it debilitates the worker’s efficiency… Low earning power, coupled with vulnerabilities leads to poverty, which reduces the aggregate demand in the economy. Socially, it leads to dissatisfaction and disaffection, especially when a small segment of the society is well-endowed and seen to be prospering.” The Commission pointed at the indirect costs of the absence of social security in the form of increased cost of policing and crime control.

The Commission was formed in September 2004 to implement the commitment of the UPA Government in its first term (2004-2009), during which one of the elements of its Common Minimum Programme was “enhancing the welfare and wellbeing of farmers, farm labour and workers, particularly those in the unorganised sector and assure a secure future for their families in every respect.” 

A beginning
A long-overdue milestone was achieved when the Government set the ball rolling on legislative provision for social security for economically deprived sections. After much painstaking deliberations by the NCEUS, including talks with all stakeholders in labour welfare, the Commission submitted a draft ‘Unorganised Workers Social Security Bill, 2005’, to the Prime Minister. After modifications, the draft bill was submitted again as Unorganised Workers Social Security Bill, 2006. The bill, tabled in the Parliament in 2007, saw further modifications due to protests from several quarters, before being passed in 2008.

The new Act would cover 34 crore workers, including agricultural workers and migrant labourers in a timeframe of five years. These workers would get the benefit of health, life and disability insurance, old age pension and group accident scheme.
The key features of the Act are as follows:

• The Act aims “to provide for social security and welfare of the unorganised workers and for other matters connected therewith or incidental thereto.”
• Here, “unorganised worker” means a home-based worker, self-employed worker or a wage worker in the unorganised sector and includes a worker in the organised sector who is not covered by any of the Acts mentioned in Schedule II of this Act”.
• The Central Government shall formulate and notify, from time to time, suitable welfare schemes for unorganised workers on matters relating to (a) life and disability cover; (b) health and maternity benefits; (c) old age protection; and (d) any other benefit as may be determined by the Central Government.
• The State Government may formulate and notify, from time to time, suitable welfare schemes for unorganised workers, including schemes relating to provident fund; employment injury benefit and housing.
• Any scheme notified by the Central Government may be (i) wholly funded by the Central Government; or (ii) partly funded by the Central Government and partly funded by the State Government; or (iii) partly funded by the Central Government, partly funded by the State Government and partly funded through contributions collected from the beneficiaries of the scheme or the employers as may be prescribed in the scheme by the Central Government.
• The Central Government shall, by notification, constitute a National Board, to be known as the National Social Security Board, to exercise the powers conferred on, and to perform the functions assigned to, it under this Act. The National Board will consist of among others, Union Minister for Labour and Employment.  Among other tasks, it will recommend to the Central Government suitable schemes for different sections of unorganised workers; monitor such social welfare schemes for unorganised workers as are administered by the Central Government; review the progress of registration and issue of identity cards to the unorganised workers; and review the expenditure from the funds under various schemes.
• Every State Government shall, by notification, constitute a State Board to be known as State Social Security Board to exercise the powers conferred on, and to perform the functions assigned to it, under this Act.
• Every unorganised worker shall be registered and issued an identity card by the District Administration, which shall be a smart card carrying a unique identification number and shall be portable.
• If a scheme requires an unorganised worker to make a contribution, he shall be eligible for social security benefits under the scheme only upon payment of such contribution.
• Where a scheme requires the Central or State Government to make a contribution, the Central or State Government, as the case may be, shall make the contribution regularly in terms of the scheme.

While the bill was passed in December 2008, that is in the previous tenure of the UPA Government, hopes had been raised just before the Budget session in July this year. While Pranab Mukherjee did mention the Social Security Act, saying, “The unorganised or informal sector of our economy accounts for 92 per cent of the employment and absorbs bulk of the annual increase in our labour force. The Unorganised Workers Social Security Bill, 2007, has now been passed by both Houses of Parliament. I have already initiated action to ensure that social security schemes for occupations like weavers, fishermen and women, toddy tappers, leather and handicraft workers, plantation labour, construction labour, mine workers, bidi  workers, and rickshaw pullers are implemented at the earliest,” he fell short of specifying the finances, just alluding, “Necessary financial allocations will be made for these schemes.”

The Government can delay disbursement of funds and an effective implementation of the Act in letter and spirit, only at a huge social cost to the country.  
      
A change in exchanges
The Government has also initiated steps towards modernisation of job exchanges, which had more or less become defunct. Forward-looking states like Karnataka are already modernising these, linking these to industry and training, and enabling online registration of jobseekers and employers.

Finance Minister Pranab Mukherjee, in his Budget speech, said, “I propose to launch a new project for modernisation of the Employment Exchanges in public private partnership so that a job seeker can register on-line from anywhere and approach any employment exchange. Under the project, a national web portal with common software will be developed.  This will contain all the data regarding availability of skilled persons on the one hand and requirements of skilled persons by the industry on the other.  It will help youth get placed and enable industry to procure required skills on real time basis.”

Mukherjee also talked of handloom clusters for job generation: “In the last Budget two mega handloom clusters at Varanasi and Sibsagar and two mega powerloom clusters at Erode and Bhiwandi were approved.  They are under successful implementation.  I propose to add one handloom mega cluster each in West Bengal and Tamil Nadu and one powerloom mega cluster in Rajasthan.  These will help preserve the magnificent textile traditions in West Bengal and Tamil Nadu and generate thousands of jobs in Rajasthan.  In addition, I propose to add new mega clusters for Carpets in Srinagar ] (J&K) and Mirzapur (UP).”

Sunrise sectors
Meanwhile, a new study by ICRA Management Consulting Services Limited, which has been largely quoted by industry bodies, has done a mapping of manpower needs in 21 sectors, and has come up with
• Forecasting of human resource requirement in key sectors
• Demand supply gap of human resources in key sectors, and
• Demand for skills in key sectors till 2022

According to the study, the key growth engines, which will also be job generators, will be the following sectors:

1. Automobile / autocomponents
2. Electronics hardware
3. Textiles and garments
4. Leather and leather goods
5. Chemicals and pharmaceuticals
6. Gems and jewellery
7. Building and construction
8. Food processing
9. Handlooms and handicrafts
10. Building hardware and home furnishings
11. IT or software
12. ITES-BPO
13. Tourism, hospitality and travel
14. Transportation/ logistics/ warehousing and packaging
15. Organised retail
16. Real estate
17. Media, entertainment, broadcasting, content creation, animation
18. Healthcare
19. Banking/ insurance and finance
20. Education/ skill development
21. Unorganised sector

The opportunities will arise. What will be required will be a right matchmaking between demand and supply of the manpower.