Employment for all by 2010?

The Prime Minister’s Economic Advisory Council has projected full employment for India by 2010. The council headed by Dr C Rangarajan claims that the economic growth rate of 9 per cent in 2007-08 will lead to creation of more jobs.

According to Rangarajan, since 2001-2005, for every 1 per cent growth in GDP, employment increase has been less than 0.5 per cent-0.48 per cent. A 9 per cent GDP growth in the current fiscal would lead to employment growth above 3.6 per cent.

However, the forecast comes with a disclaimer. Work for all would not necessarily imply quality employment. The Economic Outlook for 2007-2008 reports the bulk of increase in employment has happened in agriculture and in the informal sector where both wage rates and income growth are lower than most sectors of the economy.

The people in this case have opted for self-employment. The outlook report estimates the number of self-employed people at 260 million. Women entering the labour force largely drive self-employment, accounting for nearly two thirds of all jobs. Regular employment scarcity is now forcing people to take up low productive and uncertain self-employment options.

The Planning Commission’s observations based on the 61st round of the National Sample Survey data point at the increase in agricultural employment at less than 1 per cent per annum. This is clearly a distress-driven scenario.

At first glance, people moving towards independent jobs seems a welcome trend. But with large section of people being displaced from agriculture, claims of full employment by 2010 need to be looked at again.