Saturday, May 23, 2015

Livelihoods Promotion a Challenge in India

Livelihoods Promotion a Challenge in India 

India is eying to bring down unemployment (2-3%) and poverty (<10%) to single digit. 

It is 3rd largest economy of the world in PPP term. But it contribute in large share of poors in world population. 90% of world poor (<$25/day) live in China, India and Sub Sahara Africa. India has 40M unemployed and 100 M underemployed.

India though implemented livelihoods promotions programme but baring success stories of kudumbshri, etc, mostly the SHGs or Sakhi Mandals become 'bachat mandals'. The micro finance of their members eased little bit but poor financing from banks and absence of economic activities made them ineffective. Other linked programmes on health, education, drinking water, roads, sanitation, etc, are mainly investments on infrastructure. 

With a population of 1.25B, it has 520M workforce, that is growing @2.4%/annum, adding 12M every year. During reform period of 1992-2012, India grew by 2.2%, lower than the growth in workforce. However last 5 years it grew by 3.4% generated 90 lakh livelihood/annum.

If youth study for longer than earlier, the gap between new workforce and livelihoods can be further minimised. With rise in income, women are withdrawing from workforce but still to bridge gap of 50 lakh/annum.
The village settlement model is in a change mode of urbanisation. 80% of the youth migrate or work in cities. Many villages are turning old age home. "Young India", with median age 26Y, 28% of its population falls in 15-29 age group. Unemployment of youth is a family problem now may become social problem if median age of unemployed reach to 31Y.

Unemployment percentage in India is 9% but over 40% are BPL (43% in rural and 23% in urban); 4 cr unemployed and 10 cr underemployed, working poor, earning less.

On one side unemployment percentage are high and other side agriculture and SME sectors complaint about shortage of workforce. Industries are not thrilled with new workforce. India's "Demographic Dividend" youth are unemployable after skill up gradation training. Younger generation is not keen to go to farms, eying mostly comfortable jobs.

How to promote livelihoods and increase income of underemployed?

The answer is "enhance marginal productivity by skill up gradation and additional capital to buy equipments. An investment of Rs. 50,000/head required from State budget for skilling up and equipment support to make each youth employable.

Whatever people doing at present, do it better. Skilling 60% people for 7% jobs will not work. The way RTO book entry protected finance of Banks and boomed automobile industry, the bank finance to youth linked with recovery from wages through legislation. No one should be hired without certification. Buildings workers and other workforce need skill enhancement. "Neno Training" model of giving training 1 hr in morning and 1 hr in evening with wage protection can be thought of. MMS and SMS applications can guide them at work. They learn and work. On job training through mobile will be revolutionary.

Labour Policy to address modifications in Labour Laws to make easy exit of inefficient labourers to make the production unit viable. So that investments in manufacturing and other sectors go up.

Though India created irrigation capacity of 60M hec, post independence, the highest in human history, but most of the irrigation projects are running far  below the capacity. With incremental improvement, India can increase agriculture production by 30MT/year. 5 year sensible work under Watershed development programme has potential to rejuvenate water resources.

Farmers now seen on bikes and live more time away from farms, if given water for irrigation and modern equipments for farming, there won't be a need to support them with subsidies and MSP. (MSP made many farmers care free, not changing crop, not improving productivity, govt as buyer making them inefficient, not ready to face market challenges).

13/11/14, Mussoorie

NB: Employment doesn't mean only jobs; jobs plus self employment; a ventilation for politicians to defend in elections !!! 

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