THEME : SOCIAL AND HUMAN DEVELOMENT Generating Employment Opportunities in Karnataka

1. THEME : SOCIAL AND HUMAN DEVELOMENT Generating Employment Opportunities in Karnataka A Way Forward Paper Presented at the 2 Days Seminar on “11th Five Year Plan of Karnataka Perspectives” Jointly organized by State Planning Board, Karnataka and Institute For Social and Economic Change Bangalore On 5th May 2007 Conference Hall (Room No.318, 319) 3rd Floor, Vikas Soudha By Mr. Sanjiv Kumar, IAS, National Project Coordinator, International Programme For the Elimination of Child Labour International Labour Organization, 5A, Block-5, MCHS, HSR Layout, Sector-VI, Bangalore – 560 034.

2. Employment and Unemployment in Karnataka • Organized sector Employment remained limited (20.36 lakh) Although it showed uptrend in 2005-06 (decline in 2002-05). • ‘EE’ live registers figures showed decline (across all categories) 11.77 lakhs (Sept 2006) remained registered : inspite of knowing futility of registering. • Macro-indicators of Growth were positive SDP (9.5% 1990-91 to 2001-02) structural changes positive shifting towards services sector. • Poverty incidence – declined more sharply in Rural area. • Work participation rate for male and female increased.

3. Disturbing Trends • Incidence of poverty remained much higher than the estimated incidence of Unemployment. - Indicating indecent work situation. - Which could not lift workers above poverty line. • Proportion of marginal workers increased. • Proportion of main workers in rural areas showed perceptible decline.

4. Disturbing Trends (Contd. ..) • 50.1% Women in rural areas worked in Agriculture, 29.3% were associated with cultivation. • Agricultural wage (Rs.38 – Dec 2004) for women remained much below. Minimum wages or male (Rs.58 – Dec 2004) counter part. • Unemployment rate (as per usual status, current weekly and current daily basis steadily increased). • Seasonal migration in certain parts remained endemic.

5. Disturbing Trends (Contd. …) • Although school enrolment and retention improved but children crossing 10th (40 – 50%) and 12th (20 – 22%) remained low. • Formal Vocational Training seats stagnated (catering to 4% need) • Types of Vocational courses offered remained limited (70 – 80 type) • Physical and Financial Targets of Targeted Wage Employment Self Employment Skill Development Programmes Target exceeded but quality remained questionable.

6. Disturbing Trends • Elaborate Policy Statement on Employment Generation in 10th Plan supported by - Task Force on Employment opportunity (Dr Montek S. Ahluwalia) July 2001. - Special Group on Targeting Ten Million Employment opportunity (Dr SP Gupta) May 2002. For annual incremental addition to labour force independent of growth found a disconnect at the field level.

7. Disturbing Trends • There is no plan statement, report, strategy paper to connect the 10th Plan strategies to the field. • So Employment Generation is largely understood as - Indirect due to growth and development. - Growth driven structural changes in the economy. - Poverty eradication programmes of the Government Wage Employment Self Employment Skill Upgradation

8. Preceding discussion Throws Following Issues • What should be the ambit and range of Decent Employment Agenda in Karnataka? • What are the possible sectors, policies and programmes essential for decent employment for all in Karnataka? • How to go about mainstreaming Decent Employment concerns in the identified sectoral economic and social planning in the State? • How to ensure the plan prescriptions are effectively taken to the field from the drawing board?

9. ‘Tenth Five Year Plan a Watershed From EG Perspective’ • Plan paper had elaborate strategies and policies for EG. • Ambition : Gainful employment to entire additions to labour force. • Growth (giving 30 million employment) supplemented by increasing the employment content of growth (giving 20 million employment) • Sectoral policy initiatives for opening up new Employment opportunities. Agriculture Food processing Rural non-farm initiative /industries, KVI. Small and medium Enterprises. Service Sectors. Better implementation of Area Development Programmes and Special Economic Programmes.

10. Tenth Five Year Plan (Contd. …) • Supported by 2 High Power Committee Report : No one can do a more exhaustive listing of such policies. • Dr Montek Singh Ahluwalia Report interalia dealt with Role of Growth in Employment Generation. Higher rates of investment. Improvement in Efficiency of resource use. Improvement in Infrastructure. Financial System – Credit for informal sector. Agriculture and allied activities. Food Processing. Small Scale Industry. Services Role of Special Employment Programmes. Labour Skills and Training Reforms in Labour Laws.

11. Tenth Five Year Plan (Contd. …) Dr SP Gupta committee (May 2002) : Much more Exhaustive Identified sectorwise 20 million additional jobs possible. Negated some of the propositions of Dr. Ahluwalia committee. Now the plan period coming to an end. Can we say how far these could be incorporated in practice and implemented? Midterm review 10th Plan : Candidly accepts some initiatives could not be taken beyond drawing board. Approach paper to the 11th Plan colder on Employment front. Have we forgotten the unfinished Agenda?

12. Tenth Five Year Plan (Contd. …) Aspiration of 10th Plan vis-à-vis Additional Employment Generation could not take shape due to - There was no process identified, put in place, with supportive resources to translate thought into action. - No means of measurement, reporting, monitoring to follow-up intentions. - Employment being cross cutting theme : Policy prescription may interfere with other sectoral priorities, or add to work load, so sectoral ownership will come only by consultative harmonization. - Such exercise will need additional financial support for planning, motivation, training, reporting, monitoring and consultation.

13. Tenth Five Year Plan (Contd. …) Let us see one sectoral prescription in detail. How it could be implemented? 1. Agriculture : Diversification of agriculture and removal of control on storage, movement and marketing of agri-products. * Agriculture production and linked processing, distribution, trade, financial and commercial activities still have a very large potential for sustaining the demand for labour and improving the quality of employment. * Step up public investment in agriculture (irrigation power, road) reduce subsidy, bring additional acreage under cultivation of oil seed and pulses. Horticulture, farm management programmes, agri-clinics and seed production are other potential areas.

14. Tenth Five Year Plan (Contd. …) * Regeneration of degraded forests, dry land development and highly labour intensive activities. * Watershed development. * Development of Medicinal Plants and Energy Plantation which have high growth and employment potential. * Minor irrigation. * Cultivation of Bamboo and manufacturing of Bamboo based products. * Milk products control order, canalized export needs review. * Private and cooperatives participation in marketing increased and forward trading in agricultural commodities should be promoted. * Minimum support price should encourage diversification.

15. Tenth Five Year Plan (Contd. …) * Agriculture land use and liberalization of land laws - Policies for better utilization of land and water. - Policy on hither to unutilized land (cultivable and afforestable land owned by Government) - Back-ended beneficiary-oriented subsidy scheme for reclamation of degraded lands like ravines, un- leveled lands, saline, sodic, alkaline and waterlogged lands. - Computerization of land records, lower stamp duty, reduce illegal conveyance and litigation.

16. Tenth Five Year Plan (Contd. …) - Legalizing land leasing in and leasing out. - Promotion of contract farming (standardized contract format enforceable on both parties will help optimize size of holding and viability of agri-units. - Minor irrigation and watershed development. - Semi-arid and rainfed areas in focus. - Agro forestry, on marginal lands, tree plantation on wasteland (Task Force on greening India).

17. Tenth Five Year Plan (Contd. …) - Research and extension – focus on diversification to oil seed, pulses, animal husbandry, dairying, poultry, rain water harvesting technology, fisheries, floriculture. - Women in agriculture : Women’s access to productive land by regularizing leasing and share cropping efforts to bring wasteland under cultivation, incentive to women in low input subsistence agriculture. - Increased agricultural exports.

18. Skill development, Vocational Training and Entrepreneurship as a closely linked theme : A limiting factor Skill essential for : • Absorbing new technology. • Increase productivity. • Ensure decent income for living. Liberalization/Globalization – Structural change displacement require rapid skill building. - To tap opportunities. - To minimize social costs.

19. Skills (Contd. …) • 95% of the world youth (15-35 years) learn skill with 4000 choices. • In India 2% youth receive 70-80 choices. • India has 11,000 VET : China has 5,00,000. • We have good Engineers/Doctors but no good technicians. • Some long term VET have skill mismatch. • In India more than a crore children will require VET every year (In Karnataka 8 -9 lakh)

20. Skills (Contd. …) • Lack of monitoring and free ship obfuscates accountability. • Physical financial Target monitored. • Follow up and support services lacking. • Adolescents below 18 years can not participate in most such training. • Skill absorption capacity of older beneficiaries (average age 24 years) is limited.

21. Skills (Contd. …) • Private Public Partnership : Supported by Apprenticeship has limited reach (2,53,541 seats low) lesser number is availed. • Travesty of labour market that higher the skill  more employability  wage employment. Lower the skill  less employability  forced to be a piece rate free lancer (an entrepreneurs) • Self Employed.

22. Skills (Contd. …) - 2 clear segment – luckier get into Formal VET others – Half literate left to fend for themselves. - For 11th Plan a working group was constituted. - Report focuses on the first segment. - More emphasis on Labour Ministry’s Institutions.

23. Critical issues in ‘Skill’ Upgradation • Very large number (> One crore in India) of Adolescent need employable skill for decent employment – Coming out of poverty. • Age at which training is delivered in critical. • Funding of such programme needs innovative designing to avoid lack of accountability. • All public/private institutions can be roped in. • Scope and intensity of Apprentice Act need improvement.

24. Critical issues in ‘Skills’ • Multi skilling with a basket of Generic skills essential. • Resource mapping across institutions, pooling. • Proper labour market information system for skill forecasting. • Institutional capacity to design training, curriculum, instructional material, teachers training, certification essential. • Effective MIS. • Participation of all possible, including International Experiences. • Widespread Entrepreneurship learning – may be in the school curriculum. • In a mission mode with adequate resource support.

25. What can be Done? A possible road map for Generating Decent Employment opportunities in Karnataka. Recognizing the importance of Decent Employment Opportunity for all as a basic human need and a right preparing a policy statement to mainstream the Decent Employment Agenda in all the economic and social planning in Karnataka. Formation of a small core group to oversee the strategizing and implementation, identification of consulting partners and evolving modes of consultation.

26. What can be Done?(Contd. …) Resource allocation for engaging in a policy dialogue with the selected sectoral stakeholders to jointly formulate a policy with following cross cutting themes and coming out with an implementable time bound action plan : (i) Skill upgradation and productivity improvement, Entrepreneurship. (ii) Gender, Caste and Regional balance. (iii) Indicators and means of verification.

27. What can be Done?(Contd. …) (iv) Resource allocation and supplementary resource need and their possible sources. (v) Target, Timeframe, major objectives, outputs, activities, responsibility matrix, monitoring and evaluation mechanism, constraints etc. * Brainstorming with the sectoral stakeholders. * Capacity building and sensitization of stakeholders for ownership and smooth implementation of plan.

28. What can be Done?(Contd. …) Sectors with labour intensity and elasticity may be considered (i) Macro level policies on investment, efficiency of resource use, infrastructure, financial and credit system (ii) Sectoral policies for Agriculture and allied activities land use, watershed, horticulture, animal husbandry, dairying, poultry, sericulture, floriculture, bamboo, medicinal plant, energy plantation, minor irrigation, marketing, diversification, infrastructure, fisheries, research and extension, women in agriculture.

29. What can be Done?(Contd. …) (iii) Food processing. (iv) Rural Non-Farm Activities/Industries; including Khadi and Village Industries. (v) Small and Medium Enterprise and all agencies promoting such enterprise. (vi) Service sector : Health, Nutrition, Education, Vocational Training services, IT and communication, Tourism, Housing, Real Estate and Construction, Road Transport, retailing.

30. What can be Done?(Contd. …) (vii) Special Economic Programme/Area Development Programmes (Wage Employment, Skill Upgradation, Self employment). (viii) Labour skill, training and productivity. (ix) Reforms in labour law. (x) Labour law implementation. (xi) Social security, health and productivity.

31. What can be Done?(Contd. …) Extending the dialogue with other departments and agencies of the Government to mainstream decent employment concerns in their social and economic planning. Conduct of certain crucial research on certain areas identified as bottlenecks and blind alley like. • Quality skill development and vocational training for informal sector. • Training module, trainers training, certification and bench marking mechanism.

32. What can be Done?(Contd. …) • Women’s employability and productivity. • Migration. • Excluded categories’ employability and productivity. • Tracer studies to assess quality of employment and productivity. Collaboration with International Agencies, academic and research institutions, Employers and Workers Organizations and professional bodies. Learning from the Best Practices world wide. Fine tune the process and make it an integral part of the annual social and economic planning and plan implementation.

33. Dividends from such measures will far exceed such investment. It will be a truly ‘Swarna Karnataka’. Thank You