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Doctor, why have you not lived up to your word on jobs? DECEMBER 27, 2013 (Published by taxindiaonline.com)   WITH the UPA trapped in the sunset mode, the Prime Minister Dr. Manmohan Singh has the last opportunity to reflect on reasons for his Government's growing unpopularity among the masses. A sincere analysis might perhaps motivate him to make a brave attempt to regain the trust that public reposed him in 2004 and 2009 polls. A major factor for UPA's downslide that PM must dissect is its lip-service to the need for creating jobs in manufacturing and service sectors and preventing lay-offs. The failure on this count is primarily due to Government's obsession with dole-outs or welfare approach as reflected in the food security bill and Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGS). The debacle of the Congress, UPA's core, in the recent State Assembly polls has confirmed that votes cannot be won with charity.

MGNREGS does not provide work with dignity. It merely provides partial or namesake employment to rural people to earn barely two square meals for a part of the year. To be precise, it ensures employment in rural areas for at least one hundred days of in every financial year to every household whose adult members volunteer to do unskilled manual work. At best, it slows down migration from rural areas to urban areas. UPA has never realized that an average person yearns to earn his bread with dignity. The urge to work is universal. Did this truth not ring in PM's ears when Pope Francis recently invoked the secular principle of work is worship? Addressing a public rally in Italy in September 2013, Pope said: "Excuse me if I use strong words, but where there is no work there is no dignity." As put by a news report, the crowd of thousands of people chanted "work, work, work" at the gathering, which took on the feel of a union rally. PM should also mull over the Dutch's latest experiments with work. In Amsterdam, a Government-funded programme to lure alcoholics off the streets by paying them in beer to pick up trash has grabbed headlines across the globe. Why has the UPA not conceived such innovative schemes for beggars? Why has the Government not constituted an innovation council for employment generation on the pattern of numerous sectoral innovation councils? If innovation in employment generation is too much to expect from UPA, what has Dr. Singh to say about inordinate delay in finalizing and releasing the National Employment Policy (NEP), which has been on the anvil for almost seven years? The NGOs-influenced UPA, on the other hand, has stalled, delayed and aborted projects thereby killing million of job opportunities. It has ensured flight of Indian capital abroad, resulting in creation of millions of jobs for aliens. It has even compromised national security by aborting or delaying certain projects at the behest of wild life fanatics. It is no wonder then to see stupendous growth in army of beggars, homeless street children, urchins and petty criminals in urban areas over the years. And this trend shows no sign of weakening under the impact of MNEGRA, Right to Education, free school meals, etc. Dr Singh, leave aside this bitter truth for a while. Recall your notable interview that you gave in 2005 to McKinsey Quarterly. Captioned 'India's economic agenda: PM's McKinsey Quarterly interview', it focused on creating jobs. The PM had stated: "Jobs have to be created in all sectors of our economy. Agriculture still accounts for 60 percent of our labor force, and I believe that we will need a second green revolution to increase production and productivity, and in the process, I hope, we will create more jobs. But essentially over a period of time, our salvation lies in getting people to move out of agriculture. Services today account for 50 percent of our GDP. There are lots of people who tell me that services cannot move far ahead of what's happening in manufacturing, and that worries me-this imbalance. I feel we have to do a lot more on manufacturing because, ultimately, services respond to what's happening in the production sector." He added: "We have to walk on two legs. We have to create conditions in which manufacturing and services-the economy outside agriculture-move and move fast enough. And at the same time the working force that is available must have skills which will fit the kind of jobs which will be in demand." Dwelling more on the same issue, Dr. Singh said: "All demographers tell me that if we can find productive jobs for this young labor force, that itself should bring about a significant increase in India's savings rate in the next five to ten years. If our savings rate goes up, let us say, in the next ten years, by 5 percent of GDP, we would have generated the resources for investment in the management of this new urban infrastructure that we need in order to make a success of our attempt at modernization and growth." Has this vision been translated into realty? Forget creating jobs, UPA has failed to protect job losses in the manufacturing and services sector. As put by Parliamentary Standing Committee on Industry in its report in May 2013 "Manufacturing sector is the key to job creation but contrary to this the country has lost 5 million jobs in the manufacturing sector during the period 2004-05 and 2009-10. The alarming level of current account deficit and corresponding adverse balance of payments position demands that the manufacturing sector receives an immediate boost." If this does not let PM breaks his mon-varat over employment (he has already spoken about creating jobs since the McKinsey interview), he should read the Report on Youth Employment-Unemployment Scenario 2012-13 released recently by Labour Bureau, Ministry of Labour & Employment. It says: "Every 1 person out of 3 persons who is holding a degree in graduation and above is found to be unemployed based on the survey results under the usual principal status approach for the age group 15-29 years." It notes that with increase in education level, the unemployment rate is also increasing for all age groups viz. 15-24 years, 18-29 years and 15-29 years. In rural areas the unemployment rate among graduates and above for the age group 15-29 years is estimated to be 36.6 per cent whereas in urban areas the same is 26.5 per cent. As put by the report, "Over-education and over-skilling coexist with under-education and under-skilling and increasingly with skills brought about by long term unemployment. Young people in employment are actually overqualified for the job they are doing and therefore society is losing their valuable skills and forfeiting stronger productivity growth that would have been achieved, had these Young people been employed at their appropriate level of qualification." The report says: "In the absence of proportionate growth in job opportunities in manufacturing and services sector and availability of insufficient number of jobs coupled with prevailing mismatch between education and job opportunities, self-employment is the only option for youth and the current survey confirms this assertion. Based on the survey results, majority of the persons are either self employed or casual labour." Even International Labour Organization (ILO) has recorded its unease over Indian labour market. In its report ‘World of Work Report 2013', ILO says: "In a number of emerging and developing economies, such as India, Mexico and the Bolivarian Republic of Venezuela, the labour market situation did not improve and job quality worsened between 2007 and 2011." Concern over unemployment has also been voiced by the Labour & Employment Ministry's 'Annual Report to the People on Employment 2012. Released in May 2013, the Report notes that youth unemployment rates are generally higher than the adult rates. They thus "pose a serious challenge to effective policy intervention. As put by the report, "the possibility of social exclusion as a consequence of youth unemployment is a grave problem for the society as whole." It advocates priority to generating increased employment as growth strategy in itself. The multi-pronged strategy suggested in the report, among other things, calls for at least 8 % growth in gross domestic product to "achieve reasonable employment growth." The existing labour statistics do not capture fully all dimensions of unemployment crisis. The first step that PM must take is to order complete overhaul of process of collection of statistics on employment and unemployment. The data on unemployment rate and trends should be generated every month.The data should be collected in keeping with definition of unemployment in Europe, OECD or the one recommended by International Labour Organization. In European Union, for instance, an unemployed person is someone aged 15 to 74 without work during the reference week and who is available to start work within the next two weeks (or has already found a job to start within the next three months) and who has actively having sought employment at some time during the last four weeks. The second initiative that PM should take is to approve and implement with full vigour the pending national employment policy. He should also usher in labour reforms to encourage companies to hire more people with flexible options and to retrench them when the companies fail and face imminent closure. The third and foremost initiative should be to make jobs creation the foremost agenda for sustainable development of the country. All concerns, hyped and real, about environment should be secondary. All incentives relating to investment should be calibrated to employment generation. Put simply, the Government should transform demographic dividend from esoteric concept to realty. It is here pertinent to quote again the Government's Report on Youth Employment-Unemployment Scenario 2012-13. It says:"By 2020, India is set to become the world's youngest country with 64 per cent of its population in the working age group. With the West, Japan and even China aging, this demographic potential offers India and its growing economy an unprecedented edge that economists believe could add a significant 2 per cent to the GDP growth rate." Dr. Singh now has compelling reason to make employment generation the first plank of new wave of economic reforms. (weblink: http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=19383 (Published by taxindiaonline.com) UPA in the Sunset mode with millions unemployed

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