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 Mother’s Service Society, Pondicherry

2. Unemployment M M
Twice as high for lower consumption classes
On daily basis 35M
Youth Unemployment 13%
Kerala %

3. Natural Employment Generation
New entrants to labour force ` 7-8M/yr
Urban migration M/yr
Agriculture employment is flat
Less growth in unemployment M/yr
Natural job generation M/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
200 M * .07/20 =

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. India’s Crop Productivity Gap (kg/ha)
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

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 times earning / unit area
Filling India’s nutritional gap requires 40% growth
Add 4M ha horticulture to raise production 40%
Generate 8 million jobs
P Raising horticulture production by 14MT fruit and 49MT veg requires 2M ha
Actually India raised fruit by 17MT (total 46MT) and veg 32 MT (total 82MT) by adding 3M ha (total 10M ha)
Market potential NABARD is for 100 MT fruit (=+55MT) and 220 MT veg (+138MT) by 2020
Raising production to meet min nutritional requirement, i.e. 40% would require 4M ha

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. Oil Demand to Triple by 2020

16. 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

17. 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

18. 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

19. 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

20. 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
Total
60,000,000

21. Organization for Rural Prosperity
Self Help Groups
Contract Farming
Rural Information Centers
Farm Schools

22. 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

23. 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

24. 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

25. 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

26. 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

27. Service Sector USA: provides 80% of jobs India: High potential fields
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

28. 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

29. 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.

30. 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

31. 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

32. 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 & other fields
20 lakhs
New entrants to workforce w/o training
50 lakhs
Existing unemployed youth (15-29) of which 80% are educated up to 10th
Existing workers to be trained to raise non-ag skilled portion to 25%
350 lakhs

33. Three Models Farm Schools in every revenue village Vocational Schools
Computerized & Televised Vocational Training

34. 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

35. 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

36. 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

37. 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

38. 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

39. 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

40. 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.

41. 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

42. 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.

43. 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

44. 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?

45. 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

46. Issues for Study Natural job creation Occupational demand
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?
Efficacy of Entrepreneurial Development Programmes