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The issue of jobless growth. How to tackle?

The government must give top priority to the agriculture and manufacturing sector in order to keep a check on the rising unemployment in India.

By Anubhav Srivastava
November 18, 2008

Thought India has maintained a GDP growth of more than 7 per cent for past several years, a vast section of its populace, particularly in the rural areas, still remain jobless.  There is thus an urgent need to evolve a model of development that ensures employment growth along with GDP growth. If we look at the Indian scenario, we find that nearly 60 per cent of the workforce is engaged in agriculture and about 12 per cent in manufacturing. Hence government must find ways and means to stimulate growth in these two sectors in order to meet the growing demand of jobs.

To promote agriculture, the government should put irrigation and watershed development high in the list of priorities. Irrigation is vital to the growth of agriculture. It has a cascading effect on all the other activities related to agriculture. Developed irrigation facilities makes farmers less dependent on monsoon and at the same time helps them in increasing the per hectare agricultural production. Efficient irrigation facilities encourage the farmers to opt for high yielding varieties (HVY) and also increases fertilizer consumption. Dams built on rivers help in bringing more and more wasteland under agriculture. This increase in agricultural land, apart from increasing production of food crops, simultaneously increases the production of fodder. This in turn encourages people in the villages to purchase more livestock. Similarly government must encourage setting up of secondary and tertiary sector industries related to agriculture in the rural areas itself so that migration of people to bigger cities in search of jobs can be checked.

On the manufacturing front, the government must promote small-scale industries (SSI). This can be done by imparting vocational training to the people in the rural Areas and providing them micro-credits. To make these small industries competitive vis-à-vis the bigger companies, people in the villages should be promoted to form cooperative bodies. Previously, the government had dereserved some of the small scale sector products and the small industries manufacturing those products failed to compete with the bigger, highly mechanised industries. Many of the people, who had been involved in manufacturing those products and hence had skill-set pertaining to only that particular economic activity, for example cloth weaving, were forced to work as manual labourers. The skills they had acquired were hence rendered useless. Government can even think of once again reserving the manufacturing of certain products to the small scale sector in order to boost employment.

Apart from the above two measures, expansion of social service network can also be taken up by the government in its efforts to boost job creation. There are several areas where there is tremendous scope for expansion and improvement like education and public sector. There is an ever increasing need of primary and secondary schools and also hospitals and dispensaries. Besides a boost to the rural sector infrastructure too helps in generating more jobs. For example, if roads are constructed in any area, it not only increases the value of the nearby land but also promotes economic activities like Dhabas (eating joints) and vehicle repair shops along it.

The author is Editor, Policy Proposals For India.