It is unfortunate that the people of India do not talk much of the Prime Minister of India during the period June 1991- May 1996, Mr.P.V.Narasimha Rao, who was responsible for bringing in economic reforms. Implementation of these economic reforms lead India to be the 3rd largest economy in the world after USA and China. To attain this position, India has overtaken Japan, Germany,France, UK, Italy, Russia and Brazil.In 1991, when Mr.Rao became Prime Minister the foreign exchange reserves were only about US$ 1/-billion and now it is around US$ 300 billion. When Mr. Rao assumed Office, the gold reserves of the country had been pledged to raise loan. Now the country is importing hundreds of tonnes of gold for its reserve. India has also emerged as an investor in foreign countries.Even developed countries are inviting Indian industrialists to invest in their countries. In 1991 Foreign authorities were tightening their visa restrictions for Indian nationals but now they are liberalizing their visa regulations for Indians to attract Indian tourists. In 1991 there was huge unemployment but now there is acute shortage of labour in every sector of the economy.
(Of course there is a long way to go to reach the per capita income level of developed countries. Agricultural production is still very low.Infrastructure is grossly inadequate in spite of the initiatives taken by Mr.Rao.)
Considering the impact of his policies and initiatives on Indian economy,India should honour Mr.Narasimha Rao in an appropriate manner- naming his birthday as national economic liberalization day, issuing commemorative stamps etc.
According to provisional 2011 census data, the population of Tamilnadu state, India increased during 2001-2011 by 97 lakh(9.7million) from 6.24 crores(62.4 million) to 7.21 crores. The birth rate was 15.3 per 1000, death rate was 7.6/1000 and the natural increase was 8.6/1000. The natural increase works out to 53 lakhs, the balance of 44 lakhs being net immigaration(incoming migration-outgoing migration) from neighbouring states and mostely from high population growth states like Bihar, Jharkhand etc. But for the immigrants, the economy of Tamilnadu would have been in very bad shape. There would have been no growth at all. Does this mean that there is shortage of labour?
Actually, the economy has not expanded so much as to lead to labour shortage.(In fact even with immigrants,the economy has not grown as much as it could have been) What has happened is that a large number of people of Tamilnadu have been taken away from the labour force because of the so called welfare measure of the government of Tamilnadu, like free food items, free clothig, free shelter, free schooling etc(Free medical treatment however is necessary). Because of the freebies, a person needs to work only fo 4-5days in a month to earn for his requirements For the rest of the days, people are made to lie idle. Hence, there has been need for people from other states to migrate to Tamilnadu.
The migrants who drive the growth engine of the state need to be looked after better. They have to be provided with all the welfare measures as are the local people. The goverment should allot house sites to them on a priority basis. In other words, government should encourage these migrants to settle in Tamilnadu permanently so that the farmers will intensify agriculture, industriliast will think of expanding their busiesses,service providers will enlarge their activities. Simultaneously, the government should minimise the welfare measures, so that the local labour is also fully available for agricultural, industrial and other activities.
There is an acute shortage of labour in every sector in India. However, in the name of welfare measures, government of india and the state governments are taking away a lot of people from workforce, thereby enhancing shortage of labour and curtailing growth in GDP. It is time the governments consider seriously the following measure to augment the work force
a. increase the age limit for giving old age pension from 60 years to 65 years and above
b. reduce the agelimit of children for employment
c.some kind of discrimination against able bodied people who refuse to work-in the matter of grant of freebies,concessions,
d.increase the working hours to atleast 8 hours a day in sectors where it is lower than this like in agricultural sector
e.strict punishment for petty thefts, trespassing by people,cattle etc, so that unproductive labour by watching (watchmen’s work) could be moved to productive sectors
f.motivating people to be sincere in and committed to work, so that the supervision could be minimised and supervisors could be employed more productively
g. curtailing freebies so that people would be forced to put in more work to earn more to meet the anticipated special expenditures on occasions like festivals, marriages, pilgrimages etc
Both the rightist and leftist political parties blame the central government of India for the price rise. Almost all the political parties continuously demand increase in wages of all workers and employees-agricultural workers, textile workers, factory workers, bank employees, government employees, public sector industrial workers etc. and the wages and salaries keep increasing. Not only this, the political parties also demand more regulations on working hours-shorter work time. This means lower production. When production/productivity is low and wages keep increasing, it is natural for prices to keep going up. The prices would have gone up, whichever party had been in power.
20-30 years ago, one should have been seriously concerned about sufferings of unemployed and under employed people consequent on price rise. But now, the issue before the country is not unemployment or under employment but of shortage or acute shortage of labour on all fronts- agriculture, plantation, industry, construction, service sector, trade, petty business, domestic work etc. The labour shortage is felt both in urban and rural areas. If the employment exchanges show increasing number of registrations, it is only due to unwillingness of people to take up jobs which do not require their educational qualification. If prices increase, people can think of taking up available jobs, working over time, doing two jobs (one full time work for 6 hours and one part time work for 2-3 hours. Agricultural workers and others in rural areas work only for 5-6 hours). This will incidentally minimize the labour shortage.
Longevity has gone up. Pensioners are getting pension for longer period now than before. One way of curtailing price rise will be to increase the age of retirement by about 5 years thereby increasing the availability of workforce.
School education could be curtailed by 1-2 years and university education by six months-one year. This will make available more number of people for work which will increase production.
In this connection, it may be relevant to mention that the government while prescribing minimum wages for workers in particular sectors should fix wages per hour instead of per day.
In India, particularly in the southern states, there is an acute shortage of skilled and unskilled manpower in every sector of the economy.
To overcome the labour shortage in the agricultural and plantation sector, the following steps could be taken
- the private sector, for various reasons is not yet ready to buy all the available and required agricultural machinery and rent them to interested farmers. Hence, the Engineering division of the departments of agriculture and horticulture should acquire the machinery and rent them to farmers.
- The engineering division should demonstrate the use of machinery
- Initially, for a period of 2-3 years, the government should provide subsidy to the private individuals to buy agricultural machinery
To overcome labour shortage in the industrial sector
- the government should stop encouraging labour intensive handloom sector and start encouraging power loom and mill sector
- exemptions from/concessions in excise and other duties for cottage, labour intensive sectors should be discontinued and mechanization should be encouraged by extending assistance to these sectors to buy machineries
To provide manpower for the service sector
- The departments of labour and employment should organize short term 3-6 month duration courses in trades like electricians, plumbers, carpenters, mechanics for automobiles, pumpsets, household equipments like televisions, refrigerators, air-conditioners etc and the trainees should be assisted to set up their own services.
- Pre-fabricated houses may be encouraged.
- In the transport sector, public transport drivers may be given additional responsibility of issuing tickets, thereby dispensing with the services of conductor.
- Tea, coffee, fruit juices, snacks etc. vending machines may be popularized and business people may be assisted to acquire these.
Law and order may be enforced in such a way, that there would be less need for watchmen/security guards.
There is a lot of scope in developing countries for creation of employment avenues. In developed countries, the scope for laying new roads is limited as they already have sufficient roads. Similarly, there is very limited scope for laying railway lines, drawing electricity and telecommunication lines, in building houses, in building lakes and digging canals, laying sewerage, expanding supply of piped gas etc., as saturation point has already reached. But in developing countries, the scope is unlimited. In other words, while it is difficult to generate employment in advanced countries, it is very easy to do so in developing countries.
All the works mentioned above, will not only eliminate unemployment, but would lead to labour shortage. However, priority should be established for undertaking the different works. Irrigation and agriculture should get the top priority. After digging lakes and irrigation wells around the lakes, it takes only about 4-5 months to get additional production of food grains. The second priority should be to set up cotton ginning, spinning and weaving mills and ready made garment units.
Funds should not be a problem as currency notes can be printed. This will not lead to long term inflation as with the digging of lakes, wells and canals, the production of food grains and other agricultural produce will increase which will lead to decrease in prices. Inflation would be there only for a short time, between the start of the work for digging lakes etc and the harvesting of the agricultural produce.
It was and continues to be fashion with leftist intellectuals and political parties to speak of the rich becoming richer and the poor becoming poorer in India, thus widening the gap between the rich and the poor. They find fault with the present and past governments for this.
The rich are becoming richer because of the hard and long hours of work they put in. Similarly, the poor are becoming poorer because of their refusal to work hard and longer.
In the past, agricultural workers used to work for 8 hours a day but now they work only for 4-5 hours in most of the places. During this period, they take breaks for drinking water, smoking, tea and for lunch. The owner of a provision store who is rich, works from about 7 am to 9 pm i.e. for 14hours a day, taking break only for lunch and that too only for short time. The same is the case with other rich people.
To meet the increased cost of living, the workers in United States and other developed countries look for second and third jobs. In India they look to the governments and the governments readily come up with more grants and subsidies as well as free supplies, while there is acute labour shortage in every sector of the economy- agriculture, construction, small scale industry, plantation, transport, domestic etc. The people who work for 4-5 hours can easily find second and even third jobs in their localities themseves in agriculture, construction etc. which would enable them not only to meet both ends meet but also have savings for them and their children.
It is time the governments reduce the grants and subsidies and advise the people to look for second and third shift jobs. The governments may however, simultaneously assist the people to acquire new skills for working in construction, small scale, plantation, transport and other sectors
Some of the measures which can be taken with very little investment for faster economic development in India are:
- Increasing the working hours of all industrial, commercial, government and other employees from around 40 hours to 48 hours a week. This will result 20% increase in production in manufacturing sector, increase in value of services etc.
- Increasing the retirement age from around 58/60 years to 65 years. This will enable each person to increase his contribution to GDP by over 15%.
- Providing opportunities to those already retired to work either from home or from factories/offices
- Introduction of more machinery in agricultural and plantation sectors which, suffers acute labour shortage. Tractors were introduced a few decades ago. Large scale introduction of harvesters, planters, weeders etc should be undertaken.
- Encouragement for handloom sector should be given up. Power loom sector should be encouraged in view of labour shortage in spinning, weaving, knitting and ready made garments sectors.