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Strategies for Full Employment in India

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... threat from imports (e.g. cotton) 11. Technology Strategies ... Appachi Foundation & ICICI 60 SHGs for cotton growers in Tamil Nadu. 29. Contract Farming ... – PowerPoint PPT presentation

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Title: Strategies for Full Employment in India


1
Strategies for Full Employment in India
  • Uncommon Opportunities Roadmap for Employment,
    Food Global Security
  • November 21, 2004
  • International Center for Peace Development, USA
  • The Mothers Service Society, Pondicherry

2
Unemployment
  • 1993-94 20M
  • 1999-00 27M
  • Twice as high for lower consumption classes
  • On daily basis 35M
  • Youth Unemployment 13
  • Kerala 35

3
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

4
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

5
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

6
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

7
Where are the untapped potentials
  • Raise farm productivity
  • Renewable energy
  • Agro-industrial linkages
  • Service sector
  • Employable skills
  • Application of IT

8
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

9
Indias Crop Productivity Gap (kg/ha)

10
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)

11
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.

12
Horticulture
  • Labour content 6 times cereals
  • Generates 10-30 times earning / unit area
  • Filling Indias nutritional gap requires 40
    growth
  • Add 4M ha horticulture to raise production 40
  • Generate 8 million jobs

13
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

14
Power Demand to Triple by 2020
15
Biomass Power Generation
  • Cultivate energy plantations -- casuarina,
    bamboo, prosopis on rain-fed irrigated lands
  • Power plants 6-25 MW cost Rs 3 cr per MW
  • Cost/unit Rs 2.50 on biomass at Rs 800 per ton
  • Develop 10 million ha of energy plantation
  • Establish 4000 units, 40,000 MW
  • Reduce transmission losses
  • Create 5 million jobs

16
Oil Demand to Triple by 2020
17
Biomass Power Bio-Fuels
  • Biomass power
  • Biofuels
  • Ethanol
  • Biodiesel

18
Bio-diesel from Jatropa
  • Develop 5 million ha
  • Earn Rs 20,000 per acre (irrigated) from 3rd yr
  • Establish 2500 oil expeller units
  • Produce 10 MT biodiesel valued at Rs 20,000 cr
  • Create 5 million jobs

19
Ethanol from Sugarbeet Sweet Sorghum
  • Sugarbeet produces twice the sugar in 5½ mon
  • Only 40 water consumption
  • Add or shift 3 M ha for sugarbeet
  • Additional 15 MT sugar for export or ethanol
  • Raise sweet sorghum for ethanol rest of year
  • Produce 10 MT tons ethanol for domestic export
  • Generate 8 million jobs

20
Edible Oil from Paradise Tree
  • India imports Rs 6,000 cr of edible oil / year
  • Paradise tree is rainfed, oil-seed crop from
    Brazil containing 50 edible oil
  • Cultivate 5 M ha Paradise Tree on degraded forest
    lands
  • Establish 2500 oil expeller units
  • Produce 7. 5 MT of edible oil worth Rs 22,000
    crores
  • Create 2.5 million year-round jobs

21
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

22
Forestry, Herbs, Medicinal Plants
  • 100 M rely on forests for main source of
    livelihood, including half of Indias 70M tribals
  • Objective to raise forest cover 50 in 10 ys
  • Introduce corporate contract farming with bonded
    performance guarantees assured employment for
    local population

23
Fisheries
  • World seafood market doubled in the 1990s
  • Indias marine inland fisheries employ 6M
  • 1/3rd of Indias 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

24
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

25
Employment Potential -- summary
26
Employment Potential -- details
27
Organization for Rural Prosperity
  • Self Help Groups
  • Contract Farming
  • Rural Information Centers
  • Farm Schools

28
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

29
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

30
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

31
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

32
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

33
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

34
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

35
Vocational Skills
  • 50 of firms in developing and industrialized
    countries report severe shortage of skilled
    workers.
  • Indias problem is not lack of employment
    opportunities but lack of employable skills.
  • Skills create employment and self-employment
    opportunities.

36
Vocational Skills Gap
  • Only 5 of Indias 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

37
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

38
Vocational Training Deficit
39
Three Models
  • Farm Schools in every revenue village
  • Vocational Schools
  • Computerized Televised Vocational Training

40
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

41
Computer-based learning is twice as fast _at_ half
the cost
  • Multimedia
  • Interactive
  • Immediate Feedback
  • Self-paced learning
  • Eliminates need for trained teachers
  • Responds rapidly to changing skill needs
  • Uniform testing

42
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

43
Multimedia vocational courses
44
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

45
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

46
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.

47
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

48
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.

49
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

50
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?

51
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

52
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
    Indias 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
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