Sitaram Yechury
WHEN the doles of crores of rupees were announced by the PM last week, many wondered at the source of these funds. It is now clear. The people are in for yet another dose of heavy administrative price hikes. The cruelty of the present dispensation defies description. Marie Anteinette may have sounded an alienated royal fool when she urged hungry people to eat cakes when they could not get bread! Mr. Rao’s eco¬nomic policies no longer border on the absurd, they represent the most naked assault on the people’s livelihood. This regime’s insensivity has crossed all limits, its alienation from working people near complete.
However, the PM and the Congress continue to hoodwink the people, attempting to mislead them. Before we return to the issue of the state abandoning its social responsibilities in the sectors of health and education, as promised last week, there is one such claim that needs to be demolished. The PM has claimed that during the last three years, on an average, six million new job opportunities were created! If this were so, a palpable relief should be visible. But the experience of the youth on the street suggests otherwise. What is the reality?
ABSURD LOGIC
Many of us wondered how the government and the Planning Commission had arrived at such a preposterous claim. To unearth this one has to look into the Planning Commission’s convoluted logic.
The Planning Commission has claimed a creation of 18.78 million job opportunities during the last three years includ¬ing 94-95. If true, this would indeed be a remarkable achievement of over 2 per cent annual growth rate of employ¬ment bettering the 1.78 per cent during the 1985-92 seven year period. Further, this would mean that employment has been growing at a rate almost equal to the population growth rate. Meaning all new additions to labour force are being employed and only the backlog, which no longer grows, will have to be tackled. But is this true?
The crucial point to examine is the Planning Commission’s claim of creating “opportunities”. The actual number of people employed and the actual opportunities created are always widely different. In fact both these are distinct economic categories whose definitions are very different. To understand consider that 1000 agricultural workers find 50 days of employment during the peak harvesting season. This can be interpreted either as 50,000 employment opportunities created over these 50 days or employment for 1000 people for 50 days. The Planning Commission deliberately maintains such ambiguity in order to mislead the people through its propa¬ganda. The number of opportunities never means that many people have really found employment.
Before we consider the actual unemployment statistics, con¬sider the other assumption of the Planning Commission. It arrives at this figure of 18.78 million opportunities through what it calls the, “employment elasticity of output”. That is, the percentage of employment that is presumed to grow at a particular growth rate of GDP. Since GDP growth rate is known, an arbitrary percentage is fixed – 2 per cent – and the present figures are arrived at. But has employment actually grown at 2 per cent? For the PM’s propaganda, however, examination of such facts are not necessary.
The untenability of the PM’s claims that as GDP grows, the employment rates grow accordingly can be exposed by the experience of the Indian economy during past decades.
Between 1977 and 1983, the employment rate was 2.7 per cent compound annually. Between 83-88 this fell to 1.3 per cent. But during the later period the GDP growth rates have been higher! Even the Planning Commission has access to the NSS data which shows that a 1 per cent increase in GDP resulted in 0.61 per cent growth of employment between 72-78, 0.5 per cent between 78-83 and 0.38 per cent between 83-88.
There is nothing surprising about such a trend of declining employment growth rates. In modern decades, GDP growth rate in all capitalist countries has been crucially dependent upon technological advances, which by definition are more capital intensive i.e., employing fewer labour than earlier. The recent international experience reconfirms this trend by the commonly used global term “jobless growth”.
And such is precisely the experience of the Indian working class since the new economic policies. Lakhs of workers had to undertake “voluntary retirement”. According to government figures, 1.4 lakh of public sector employees had to face the axe (Public Enterprises Survey, GOI). Over four lakh pri¬vate industrial establishments are either sick or closed down. Thus we have a situation when even those in employment earlier are now rendered jobless, leave alone generation of additional employment.
That this socalled growth of jobs may have been in the rural sector is again a preposterous proposition because if this were so, the rates of poverty and impoverishment seen earlier could not have taken place. The squeezing of the poor, decline in real wages, fall in purchasing power are all indicative of the declining employment opportunities.
Where, then, are these new jobs Mr. Rao? The people who need them cannot find them.
INCREASING UNEMPLOYMENT
Let us look at the actual employment situation. In January 1995, 36,737,000 people were registered at the employment exchanges. An increase of 4,44,000 from January 1994. It must be noted that employment exchanges are mainly in urban areas and almost totally excludes rural unemployment. Fur¬ther not all unemployed register themselves. The actual figures therefore would be much higher considering over 2/3 of our population is still dependent on agriculture.
According to an estimate in 1994, the total employed in the country was nearly 32 crores. Of this, 78 per cent was in the rural areas and only 22 per cent in the urban. Of the rural employment, only 10 per cent is regular, 31 per cent casual and 59 per cent self employed (Patriot, 17.6.94). All these are however categorised as employed in the official statis¬tics.
The major employer in the organised sector has been the public sector employing 190 lakh of the 220 urban employment. As we have seen the public sector employment is actually shrinking. And the private sector, however high its growth, cannot match this gap. According to one estimate, the 2.2 per cent growth annually between 1981-90 in the public sec¬tor, fell to 1.2 per cent in the post reform period (Economic Survey 95-96). With the new economic policy of privatisa¬tion, according to one study (Business Standard, 1993) some 6,46,000 jobs could be lost as a result. The private sector employment growth rates show that they cannot absorb this leave alone creating new jobs.
As for the rural areas, as noted earlier, if employment had been growing, the other critical indicators would not have been deteriorating. Further, let us examine the actual bene¬fits of the so-called rural employment schemes. Apart from the aspects discussed in the last issue, the TRYSEM, the specialised employment generation scheme has fallen far below the target as seen below. The shortfall has been as high as over 50%.
PERFORMANCE OF TRYSEM
No. of youth No. of youth Youth Youth Total
to be trained self employed benefittedtrained employed
91-92 425314 307044 119959 47459 167418
92-93 300000 275993 99334 42058 141392
93-94 350000 304000 107519 42711 150230
94 upto
November 322311 106000 31979 7635 39614
Source: Planning Commission (1994)