S Ray and Rattan Chand point out, the proportion of those
employed in the population has been higher (380-390 per
thousand) in rural India in the period 1988-2000 than in
urban India (315 - 324 per thousand). Correspondingly, the
number of unemployed persons per thousand population has
been higher in urban India (18-22) than in rural India (7-12)
during same period. In general, all over India, unemployment
fell during 1988-94 (from 22 to 18 per thousand in urban
areas, and from 12 to 7 in rural areas), and remained unchanged
higher growth has not made a significant dent in unemployment.
Also a higher proportion of population is employed in villages
than in towns, though rural employment is at the low end
of the value chain and yields subsistence income mostly.
Urban unemployment seems higher largely because the unemployed
rural youth are migrating to towns and cities in search
of livelihoods. The Southern and Western states are close
to population stabilization levels, and villages are getting
depopulated on account of migration.
is highest among the 20-24 years age group, just as youngsters
enter the job market. Over 85% of all the unemployed are
between 15 and 29 years of age. This shows that in most
cases unemployment is not on account of lay offs or job
hopping. Clearly, young people are considered unfit for
employment as they lack skills, and in time they acquire
some skills and get employment.
most advanced societies, unemployment declines with education.
As young people acquire new skills through education, they
become more productive wealth creators, and are in demand
in the job market. The striking feature in India is that
in each social group, unemployment rises with higher level
is a clear and unambiguous link between unemployment and
poverty. The percentages of unemployed below poverty line
among ST, SC, OBC and others in the country stood at 37.6,
29, 27 and 16.9 respectively. At least 37% of the ST unemployed
were living below poverty line, while only 17% of the unemployed
belonging to the social groups "Others' were below
this analysis, three broad conclusions can be drawn. First,
migration to urban areas is accelerating among young people
of employable age. Villages are getting depopulated on account
of lack of job opportunities, and cities are getting congested
and the urban poor live in appalling conditions. Second,
education is often of indifferent quality, and there is
an increasing disjunction between education and skills.
It is not uncommon to find even engineering graduates unemployed,
or working for paltry wages of Rs 3,000 per month. Third,
even when employment of some form is available, the wages
are low on account of low productivity and little value
addition. Jobless growth, or subsistence employment with
low wages will neither reduce poverty nor stimulate demand
for good and services. Eventually, unemployment will retard
both growth and social cohesion. The state must play a proactive
role in employment generation in five areas.
a massive programme of skilling of our youth should be launched
with participation of public sector, private businesses
and financial institutions. Micro efforts of this kind have
been very successful, but the challenge lies in their replication
on a mass scale. Second, our education needs to be substantially
improved, with meaningful skills imparted at high school
and college. Apprenticeships and technology workshop instruction
in Germany, vocational technical schools in France, community
colleges in the US, and vocational training institutes with
internship in Latin America - all have useful lessons to
offer. Our own polytechnics and ITIs have largely been ineffective,
as the skills imparted are inadequate, the institutions
did not respond to changes in the labour market, and there
is no interaction with industry.
we need to create economic activity in rural areas by creating
urban infrastructure and amenities, and promoting manufacturing
and service sectors based on local resources and needs.
Fourth, a significant boost to rural economy is needed by
incentivizing value addition to agriculture through post-harvest
technologies and agro-processing. Finally, the state must
improve delivery of education and healthcare so that the
people at the low end of economic pile can get basic services
free of cost, and their productivity is improved.
is much that needs to be done to eliminate poverty, enhance
skills and productivity, and promote employment and incomes.
From whatever starting point we examine these questions,
the answers are always linked to the nature of our politics
and governance. It is time we cleaned up our politics and
created a first rate governance mechanism we sorely need,
and richly deserve as a people.