Labouring On Employment Creation In India

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: A collective groan will greet the formation of yet another National Committee on Employment by the UPA government. The first 100 days of the Manmohan Singh-led government has only seen a committee raj of sorts thriving, so one more addition is par for the course. A colleague remarked that this latest committee is only to provide gainful employment for individuals who are seeking and willing to work with the UPA government!

Seriously speaking, for the bulk of other job seekers from the countryside who stream into the towns and cities of urban India, there is little that the government can do on the employment front. The area that it perhaps has some control over is the public sector component of the organised sector which works out to only 6% of the total workforce of 337 million. Even here, the latest numbers only indicate a decline rather than a rise over time.

Declining public sector employment is a conscious policy decision in an era of reform. If PSUs are to become leaner and meaner to survive competition, there is only limited slack to absorb additional numbers of job seekers. The organised sector thus is unlikely to bear the brunt of excess labour in the system. The bulk of job seekers will perforce have to take up casual wage opportunities or self employment in the informal sector.

The point to note is that the government has little or no control over labour absorption in the informal sector. By definition, such a sector is outside the pale of institutional protection in the form of wage legislation and trade unionism. So, besides fretting over the deteriorating quality of employment in this sector, there is nothing that the government can do to impact the fortunes of over 90% of job seekers in urban India.