Net nitpicks

Updated: Jan 27 2005, 05:30am hrs
A scheme to provide a safety net for workers rendered jobless, with the financing so arranged as to obviate any money coming from the governments coffers, is a good thing. However, details and enforcement of these are important. The reported plan to have the Employees State Insurance Corporation implement, with government approval, such a scheme for its 70 lakh-odd member-contributors needs to be checked in this regard. The principle of such a scheme is that everyone regularly makes a small contribution. This corpus, augmented with investment of the surplus, will then be used to provide a living wage, temporarily, for those whove lost their jobs. Effective schemes abroad also have an integral provision for both, threshold testing and re-training: the latter assumes a strong liaison with industry/employers.

Officials say the ESIC will fund this entirely on its own, having a Rs 40 crore surplus of revenue over spending (from members contribution and its own investments) in the year before. And this allows a dole equal to half the last wage drawn by the laid-off worker for around five months. The highest ESIC contributor earns no more than Rs 7,500 a month, which makes all 70 lakh of them largely unskilled and easily replaceable labour. And so, the least likely to be able to know, or to access, the sort of re-training to make them more employable when the dole runs out.

The idea of a net is to cushion the shock of a fall and then get people back on their feet. This is essential if we are to push ahead with any kind of restructuring involving retrenchment of labour, as is most likely. But this cant happen without close links with industry, flexible hiring and training rules and making dole eligibility conditional, beyond a point, on a willingness to undergo re-training, or to accept a job placement. These are all areas where the government hardly has much of ideas or a system in place. If this is not rectified on a priority, the proposed national dole will be no more than that, not an aid to a more dynamic labour force.