Employment by sofiaie

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									Strategies for Full Employment
             in India
              Uncommon Opportunities:
    Roadmap for Employment, Food & Global Security

                      November 21, 2004


       International Center for Peace & Development, USA
            The Mother’s Service Society, Pondicherry


                                                           1
Unemployment
 1993-94                    20M
 1999-00                    27M
 Twice as high for lower consumption classes
 On daily basis             35M
 Youth Unemployment         13%
     Kerala               35%




                                                2
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


                                                                                 3
     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     4

   Change of attitudes
  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
                                                              5
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




                                           6
Where are the untapped potentials
 Raise farm productivity
 Renewable energy
 Agro-industrial linkages
 Service sector
 Employable skills
 Application of IT




                                    7
     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
                                                                               8
        India’s Crop Productivity Gap
                                  (kg/ha)

    Crop        USA       China        India

Maize           8900      4900         2100

Paddy           7500      6000         3000

Soy beans       2250      1740         1050

Seed Cotton     2060      3500         750

Tomato          6250      2400         1430

                                               9
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)

                                                   10
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.



                                                      11
   Horticulture

 Labour content 6 times cereals

 Generates 10-30 times earning / unit area

 Filling India’s nutritional gap requires 40% growth

 Add 4M ha horticulture to raise production 40%
 Generate 8 million jobs



                                                        12
 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



                                                            13
       Power Demand to Triple by 2020
                   1997          BAU 2020                  BCS 2020
1400


1200


1000


 800


 600


 400


 200

                                                                             14
   0
        Industry    Transport   Agriculture   Commercial    Residential   Total
  Oil Demand to Triple by 2020
                               1997      BAU 2020   BCS 2020


      Total


  Domestic


Commercial


 Agriculture


  Transport


   Industry


     Power


               0   50              100              150              200        250
                                                                           16
                        Projected demand for oil in million tonnes
  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


                                                   21
Forestry, Herbs, Medicinal Plants

 100 M rely on forests for main source of

  livelihood, including half of India’s 70M tribals

 Objective to raise forest cover 50% in 10 ys

 Introduce corporate contract farming with bonded

  performance guarantees & assured employment
  for local population
                                                      22
Fisheries
 World seafood market doubled in the 1990s

 India’s marine & inland fisheries employ 6M

 1/3rd of India’s 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        23
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


                                              24
Employment Potential -- summary
Crop productivity growth              5,000,000
Horticulure                           8,000,000
Biomass power & bio-fuels            21,000,000
Agro-forestry                         6,000,000
Cotton & Textiles                    12,000,000
Dairy, animal husbandry, fisheries    8,000,000
Total                                60,000,000


                                            25
Organization for Rural Prosperity
 Self Help Groups

 Contract Farming
 Rural Information Centers

 Farm Schools




                                    27
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

                                                28
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
                                           29
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

                                                   30
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
                                              31
    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
                                                                         32
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                  33
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

                                                 34
Vocational Skills
 50% of firms in developing and industrialized
  countries report severe shortage of skilled workers.
 India’s problem is not lack of employment
  opportunities but lack of employable skills.
 Skills create employment and self-employment
  opportunities.



                                                    35
   Vocational Skills Gap
 Only 5% of India’s 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
                                                        36
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


                                                 37
Vocational Training Deficit
Students completing 8th-9th standard                300 lakhs

Students entering 10th-11th                         150 lakhs

New entrants to workforce (per year)                 70 lakhs

Vocational training in engineering, agriculture &    20 lakhs
other fields

New entrants to workforce w/o training               50 lakhs

Existing unemployed youth (15-29) of which 80%      150 lakhs
are educated up to 10th

Existing workers to be trained to raise non-ag      350 lakhs
skilled portion to 25%                                      38
Three Models

 Farm Schools in every revenue village

 Vocational Schools

 Computerized & Televised Vocational Training




                                                 39
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




                                                                40
Computer-based learning is
twice as fast @ half the cost
 Multimedia
 Interactive
 Immediate Feedback
 Self-paced learning
 Eliminates need for trained teachers
 Responds rapidly to changing skill needs
 Uniform testing


                                             41
 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                                           42
Multimedia vocational courses
RWH              Child care          Nutritionist
Selling skills   Real estate         Law clerk

Telemarketing    Insurance agent     Quality manager

Catering         Video editing       Furniture design

Farm mgmt        Pharma rep          Textile design

Reporter         Dry cleaning        Electrical repair

Travel agent     Internet research   Graphic design

Bookkeeper       Organic farming     Interior design     43
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



                                                44
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




                                                   45
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.                                     46
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



                                                     47
     CVT Action Plan
1. Delivery CVT through all state-owned engineering colleges, ITIs,
     Polytechnics, liberal arts colleges, high schools, other institutions.
2.   Provide financial assistance/ incentives under Central Government self-
     employment schemes to promote private training institutes.
3.   Encourage financial institutions to provide loans to entrepreneurs.
4.   Negotiate with computer software companies to develop a wide range
     of vocational training courses.
5.   Recognized institutional authorities to certify course contents.
6.   Finance bulk purchase of approved training software with 50% subsidy
     to minimize the cost of training.
7.   Train entrepreneurs to set up/manage private institutes.
8.   Provide scholarships to low income youth to cover training fees.
                                                                      48
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                                  49

   Computerized testing laboratories
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?
                                                      50
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

                                                     51
 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 India’s development to next higher level
 Job creation in other countries
       Study which job categories grew rapidly in US during a comparable period?
                                                                                                52
 Efficacy of Entrepreneurial Development Programmes

								
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