2nd Five Year Plan
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Introduction
Chapter-
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Chapter 5:
EMPLOYMENT ASPECTS OF THE PLAN

A PLAN for economic development implies the utilisation of available resources in a manner which would maximise the rate of growth of output This is essentially a long-term task; so is any policy intended to ensure conditions of full employment Over a sufficiently long period a policy of full employment does not conflict with that of stepping up the rate of development. It is now widely recognised that the problem of unemployment, especially in an underdeveloped economy like ours, can only be solved after a period of intensive development. Over a short period of five years, however, there may be a degree of conflict as between competing claims of capital formation at a rapid rate and the provision of larger employment. In determining the programme for the next five years, the prime consideration is that at least the deterioration in the unemployment situation should be arrested.

Size And Nature of The Problem

2. The task to be faced in the coming years in the field of creation of employment opportunities is threefold. Firstly, there are the existing unemployed in the urban and rural areas to be provided for. Secondly, it is necessary to provide for the natural increase in the labour force, which is estimated at about 2 million persons a year over the next five years. Lastly, the under-employed in agricultural and household occupations in rural and urban areas should have increased work opportunities. Under the joint family system the lack of employment opportunities used to be reflected mainly in underemployment or disguised unemployment This system provided a measure of social security against unemployment, however inadequate it might have been. With the spread of education, land reform and the natural desire on the part of the youth for independent means of living, there is now a tendency towards seeking wage employment which brings unemployment more and more into the open.

3. Experience during the first plan has emphasised the need to view the employment situation not only in the aggregate but also in its distinct urban and rural components. In assessing the size of the problem, as it would develop during the next few years, it is necessary therefore to take into account its magnitude in the urban and rural sectors in different regions of the country. It is necessary further to distinguish the educated unemployed from other unemployed persons.

4. Among difficulties met with in devising appropriate remedies for unemployment are the lack of adequate data on the extent and nature of unemployment, and the manner in which employment responds to different kinds of investment stimuli. Periodic data on unemployment ranging over the economy as a whole are not available except for places served by employment exchanges, the coverage of which is mainly urban. It is, therefore, not possible to state precisely what the magnitude of the problem in different regions is. Data from the exchanges suffer from a number of known limitations. Even so, since the only information on unemployment published at regular intervals is that provided by employment exchanges, the change in the numbers on the live registers maybe said to indicate broadly the trends of urban unemployment in the economy. -A review of data relating to the first plan period shows that unemployment began to show a marked upward trend when the first plan was halfway through. During the first plan period the number on the live registers continued to increase from 3.37 lakhs in March, 1951 to 5.22 lakhs in December, 1953 and further to 7.05 lakhs in March, 1956. These statistics become more meaningful when interpreted in the light of the results of the preliminary survey of urban unemployment undertaken at the suggestion of the Planning Commission by the National Sample Survey. This survey has placed the magnitude of urban unemployment in 1954 at 2.24 millions. It has also sought to establish a rough relationship between the number unemployed and those who remain on the live registers of the exchanges. According to the survey it was estimated that about 25 per cent of the unemployed register themselves with the exchanges. On this basis the magnitude of urban unemployment at present might be of the order of 2.8 millions. This estimate appears to be broadly confirmed by the results of some other surveys recently carried out in urban areas in different parts of the country. Allowing for frictional unemployment, which is inevitable in a growing economy, it is possible to suggest that the backlog of urban unemployment may be of the order of 2.5 millions.

5. To this backlog is to be added the number of new entrants to the urban labour force. It is estimated that in the next five years, about 3.8 million persons would be added on this account. In arriving at this figure it has been assumed that in the decade 1951-61 urban population would increase by 33 per 'cent, a rate of urbanisation somewhat higher than for the decade 1931-41 (31 per cent), but lower than the rate for 1941-51 (40 per cent). The rate of urbanisation in 1941-51 was unusually high because of war and partition. It is therefore reasonable to assume that a smaller rate may prevail during 1951-61. Moreover, improvement in rural areas as a result of the operation of the plan and difficulties in securing urban employment experienced in recent years may to some extent check the efflux from rural areas.

6. It is difficult to distinguish unemployment from underemployment in rural areas. Employment opportunities to be provided in these areas have, however, not only to take into account the increased quantum of work and additions to income of a large number of the under-employed, but also the creation of a certain number of whole-time employment opportunities. In this context, a section of agricultural population, namely agricultural workers, especially those who are without land should be specially considered. Surveys of unemployment in rural areas have been recently undertaken in some States. These are yet of a preliminary character, and because of differences in the concepts used a comparative statement for different regions cannot be compiled and national estimates are somewhat hazardous. The only systematic enquiry undertaken recently was the Agricultural Labour Enquiry, according to which in 1950-51 the level of rural unemployment was of the order of 2.8 millions. Recently the National Sample Survey has begun to attempt periodic appraisals of unemployment in urban and rural areas. While its results for the urban population have become available, data in regard to rural areas are not yet available for study and interpretation. It is not possible at present to attempt a quantitative assessment of the change in the structure of employment in rural areas which might have taken place during the past five years. It could, however, be said that since the emphasis in the First plan was on schemes of rural development and since these schemes have on the whole been effectively implemented, rural unemployment is not likely to have increased. In the absence of marked trends in any direction, it might be safe to say that the volume of rural unemployment during the operation of the first plan has not materially changed.

7. As stated earlier, new entrants to the labour force during the next five years have been estimated at 10 millions. Deducting from this number the estimated 3.8 million entrants into the urban labour force, new entrants to the rural labour force in 1956-61 may be about 6.2 millions. The following table shows the number of job opportunities which may have to be created if unemployment is to be eradicated during the second plan period:

Table- I
(Figures in millions)

In urban areas In rural areas Total
For new entrants to labour force 3.8 63. 10.0
For backlog of unemployed 2.5 2.8 5.3
total 6.3 9.0 153

8. The creation of employment opportunities of this order, even if it were possible to bring this about, does not solve the equally pressing problem of -underemployment. Here again want of adequate data makes even the formulation of the problem difficult. To provide a suitable guide for the measurement of unemployment and under-employment to agencies which undertake unemployment surveys, a Manual has been recently drawn up by the Central Statistical Organisation. The suggestions made in the Manual have been used in the planning of surveys currently in progress. In regard to other data which are needed to judge the effects on employment of investments in different fields, studies in the Planning Commission are being supplemented by similar studies undertaken on behalf of State' Governments during the preparation of the second five year plan. When the results of these investigations become available, it will be possible to give fuller consideration to the regional aspects of the problem of unemployment.

Choice of Techniques

9. Considering the magnitude of existing unemployment and additions to labour force, as shown in Table I, it would be incorrect to hold out the hope that full employment could be secured by the end of the second plan. As has been pointed out earlier, the goal has to be achieved by a series of planned efforts lasting over a period beyond the second plan. To hasten the process, however, particular attention will have to be paid to maximising the employment potential of projects included in the plan consistent with our long term needs.

10. In the context of an economy with relative abundance of labour, a general bias in favour of comparatively labour intensive techniques is both natural and desirable. Nevertheless, specific investment decisions involving a choice between alternative techniques have to be made in the light of a number of consideration such as have been set out elsewhere. The area where a conflict in the use of different techniques arises is not as large as is. sometimes supposed. In many cases the choice appears to be obvious, dictated purely by technological facts of production. There is no choice, for instance, in the case of heavy industries, where no one would suggest that considerations of size and technology should be set aside to emphasise employment. Again, the need for the setting up of such industries cannot be questioned in view of their place in the larger interests of developing the employment potential of the economy in the long run. In agriculture, except under certain conditions, in the present stage of development the possible economic advantages of mechanisation may be more than offset by the social costs of unemployment that such mechanisation would involve.

11. Construction of roads, housing, railways and the like have an existing pattern of use of machinery which has been evolved over a period of years consistent with the elimination of arduous human labour, which current social values would refuse to accept. This pattern will have to continue during the next five years, although the need to increase the scope for the employment of labour in lieu of machinery is an aspect which should always be bome in mind. In the case of irrigation and power projects the choice is determined partly by technical considerations, and partly by conditions of labour supply in the area, but where such considerations do not prevail, the use of construction machinery has to be viewed against the background of the manpower available in the country and the need for saving the precious foreign exchange resources. The position with regard to the field of transport and communications, other than railways, is somewhat similar.

12. In the short run the stimulation of construction activity is considered to be a solution for unemployment in developed economies. But in India such investment cannot be encouraged beyond a point. Investment in construction tends to be 'lumpy' in character and large displacements of labour have to take place as work nears completion. There are, however, advantages accruing as a result of the facilities which construction would provide and these absorb to a large extent the labour employed temporarily in construction work. In regard to persons not so employed such investment involves problems of redeployment of personnel, training etc.

13. It is only when we-come to the production of consumer goods that the choice between techniques of production may raise difficult issues. The use of capital intensive techniques irrespective of other considerations involves a double loss in the form of (a) displacement of labour which has in any case to be maintained, and (b) a greater draft on the scarce resources for • investment, particularly foreign exchange resources. The issues involved in this Held go to the roots of the problem of economic and social development; some of them are touched upon in the appropriate chapters. The long-term objective of having a rising rate of investment, which cannot be sustained without an adequate level of savings out of current output, has to be accepted. It is particularly when the capacity of decentralised production to accumulate surpluses is challenged that the conflict among different desirable objectives becomes a matter of some concern. The surplus generated per person in a comparatively labour intensive technique may be less than in a more advanced technique but the total surplus available per unit of output for capital formation, taking into account the social and economic cost > of maintaining those who would otherwise remain unemployed, may perhaps be larger in the case of labour intensive methods. In an underdeveloped economy where the distribution of doles to the unemployed is not practicable, the balance of advantage from .the standpoint of equity lies decidedly in favour of labour intensive techniques. From the point of view of development, however, the difficulty in the adoption of such techniques lies in the mobilisation of the available surplus from a large number of smaller units; but this is an organisational problem and requires to be faced. At the same time continued efforts.to put traditional techniques on a more efficient basis are necessary. Indeed, though technical developments in such units cannot be spectacular, they can create a substantial demand for new types of tools and equipment and facilitate growth of other industries. Recent studies show that there is enough scope for increasing productivity in small industry without additional capital investment or even greater labour inputs. This requires to be fully exploited. It is only when larger employment opportunities . are generated at higher levels of income that the economy will receive a stimulus in the form of improvement in morale of the working population. This is the manner in which we envisage the economy to develop. It is after all the people that are the carriers of progress, even as they are beneficiaries to it.

14. These are some of the considerations which have guided us in the choise of schemes to be included in the plan. The possible effects on employment, direct and indirect, arising from these schemes now require to be set out.

15. Total outlay in the public sector is estimated to be of the order of Rs. 4,800 crores, of which Rs. 3,800 crores represent investment In addition, investment in the private sector is expected to be of the order-ofRs. 2,400 crores. It has been possible to work out the additional employment likely to be generated by the second five year plan, on the basis of employment data supplied by States and Central Ministries and on the basis of physical targets proposed for the private sector with certain assumptions regarding productivity increases. The results of the study are summarized in the statement below:

Table- II Estimated Additional Employment
(Figures in lakhs)

(i) Construction 21.00*
(ii) Irrigation and Power 0.51
(iii) Railways 2.53
(iv) 1 Other Transport and Communications 1.80
(v) 1 Industries and Minerals 7.50
(vi) 1 Cottage and Small-scale Industries 4.50
(vii) Forestry, Fisheries, N.E.S. and allied schemes 4.13
(viii) 1 Education 3.10
(ix) 1 Health 1.16
(x) Other Social Services 1.42
(xi) Government Services 4.34
total (i to xi) 51.99
1 Plus "others' including trade and commerce 52% of total 27.04
grand total 79.03 or say 80

16. A brief account of the methods used in arriving at these estimates is given in the paragraphs below.

(i) Construction.—As has been explained earlier, construction enters into all spheres of developmental effort. The estimate given in the table above under this head brings together the employment during construction phase of all projects such as irrigation and power, roads, railways, buildings, factory buildings, housing and the like. In assessing the employment from the construction component, the level of expenditure scheduled to be incurred in 1955-56 is compared with the expenditure in 1960-61 (the latter assumed at 20 per cent. of the construction expenditure

•The detailed break-up of construction employment under different developmental sectors is as follows:

Name of Sector Estimated additional employment in construction
1. Agriculture and Community Development 2.66
2. Irrigation and Power 3.72
3. Industries and Minerals (including cottage small-scale industries) 4.03
4. Transport and Communications (includinj Railways) . 21.27
5. Social Services 6.98
Miscellaneous (including Government service 2.34
total 21.00

of the second five year plan). For irrigation and power the labour component of the total expenditure-is estimated on the basis of studies undertaken by the River Valley Projects Technical Personnel Committee. In case of roads the labour component of the expenditure was available from the Roads Organisation of the Ministry of Transport. These estimates were accepted after discussion with the road engineers of different States. The Ministry of Railways supplied the number of persons required for construction of a given mileage of railway on the basis of their experience of work in different regions. In case of housing the employment norms for a crore of expenditure were provided by the Works, Housing and Supply Ministry and these were accepted with certain modifications after discussions with the State engineers. The same norms were used for housing in the private sector. The employment estimates for construction are likely to err on the high side.

(ii) Irrigation and Power.— Employment under this head is for the continuing activity in the field of irrigation and power. This includes maintenance staff on such projects and the personnel required for distributing the benefits accruing out of such projects. The norms for this purpose were worked out by the River Valley Projects Technical Personnel Committee on the basis of a study of the maintenance and operational personnel required on completed projects.

(iii) Railways.—The estimate of continuing employment in Railways for maintenance of new lines and for operating them was, again, provided by the Ministry of Railways.

(iv) Other Transport and Communications.—This is a composite group consisting of roads and road transport, communications, broadcasting, etc. Part of the new employment in this sector is on maintenance and the rest is on operation. Norms for maintenance employment on roads were settled in consultation with the Roads Organisation. So also were the personnel requirements for road transport worked out. The State Governments in their schemes had supplied data on continuing employment in this sphere. These were used to tally the estimates made available by the Central Ministries. Continuing employment likely to be generated under the schemes of the Communications Ministry was worked out on the basis of the expenditure on the continuing phase shown under the plans of that Ministry, j (v) Industries and Minerals.—'Employment estimates for the large-scale industries were based on the data supplied to the Licensing Committee. Where such data were not available and physical targets to be achieved under the second five year plan were set, employment estimates were worked out on the basis of latest data in the Census of Manufacturers. A 20 per cent allowance was made for increase in productivity. In the case of steel, fertilizers, synthetic petrol, heavy machinery for fabrication of steel plants, and heavy electrical equipment, the estimates furnished by the respective Ministries have been taken into account.

(v) As to mineral development, the present output per person was worked out and after making a 20 per cent allowance for productivity increase and taking into account the production targets to be achieved by 1961, a rough estimate of employment in 1961 was arrived at.

(vi) Cottage and Small-Scale Industries.—As for cottage and small-scale industries, the Karve Committee's estimates of about 4.5 lakh full-time jobs have been used. No credit has been taken for fuller jobs mentioned in that Report, since these will provide more work to the under-employed.

(vii) Forestry. Fisheries, etc.—With regard to forestry and fisheries, data supplied by the States have been relied upon. For the N.E.S., the employment estimates made by the Community Projects Administration have been used.

(viii to x) Social Services.—for Education, Health arid other Social Services, data supplied by the States were scrutinised in consultation with the respective Divisions in the Planning Commission, and were suitably adjusted.

(xi) Government Services.—As to employment in Government services, estimates of likely increase in non-developmental expenditure on the civil side by 1960-61 over the 1955-56 level were first worked out On the basis of the average yearly payment per person employed in the Government, a rough employment figure was computed.

(xii) Others.— Employment estimate for 'others including trade, commerce and other services' is much less firm. This has been based on the occupational pattern revealed in the 1951 Census. The group 'others' comprises commerce, transport (other than railways), storage, warehousing and miscellaneous services not elsewhere specified and general labourers*. According to the 1951 Census, these groups provide employment for 12.876 millions of the working force. The total of these groups, when compared to persons occupied in activities except cultivation consisting of primary occupations, mining and quarrying, industry, railway transport, construction and utilities, health, education, public administration and communications, which account for 22.447 millions, gives a ratio of 0.52. It is assumed that the same ratio would prevail in 1961. The omission of purely agricultural occupations in working out the employment ratio is justified on the assumption that in the second five year plan it is intended that additional employment should be largely in the non-agricultural sector. With increase in production in the agricultural sector, persons already in the category 'others including trade and commerce' will find fuller employment by handling greater volume of work from their existing clients. The rartio 0.52 is likely to be considered as conservative.

17. These estimates have to be judged in the context of the objective of the second five year plan of providing employment opportunities outside agriculture on an adequate scale. Even if existing unemployment. were to remain unchanged, 10 million jobs require to be created for this purpose. But, of the 10 million new entrants to the labour force a large number will be among families depending on land. In regard to such persons, as has been pointed out earlier, the quantum of additional work has to be measured not in terms of jobs, but in the form of additional income accruing to 'them. Further, on account of irrigation provided during the plan period, it is reasonable to assume that of the additional acreage irrigated, a part will provide opportunities of work on a full-time basis according to rural standards. There are also allied schemes of reclamation of land by manual labour, schemes of Central Tractor Organisation, etc., and expansion and development schemes of plantations, pepper and horticulture. These put together are estimated to provide employment to about 1.6 million new entrants to the labour force in rural areas. The balance of the irrigation facilities will account for relieving under-employment in agricultural pursuits. In addition, one lias to take into account the fuller employment opportunities provided by schemes under the village and small industries programme. Viewed in this light the results of the plan in terms of employment are likely to be significant, but the problem of unemployment will continue to require a great deal of attention during the operation of the second plan.

18. It will be useful at this stage to compare the overall employment content of the first and second five year plans. Studies made in the Commission show that direct employment generated during the first plan period in the public and private sectors was of the order of4.5 million. This estimate, however, excludes additional employment in fields such as trade, commerce, etc. With almost double the size of the development effort, the additional target of employment during the second plan is not likely to be much higher. This is because the step up in the developmental expenditure during the second plan period is not expected to be much larger than that achieved during the first plan period. The reason is that the plan sub-group general labourers of the 1951 Census Occupational classification has been left out because it is not possible 10 apnolion it properly between the two broad groups. expenditure in the public sector in 5 955-56 has been of the order of Rs. 600-620 crores as against the developmental outlay ofRs. 224 crores in 1950-51. In the last year. of the first plan, outlay in the public sector is expected to be higher than the corresponding amount in 1950-51, by about Rs. 400 crores. It is likely that as compared to the last year of the first plan, the increase in the developmental outlay in the last year of the second plan will be of the order of Rs. 600 crores. Besides, it is clear from the pattern of investment described in Chapter III that a much larger expenditure is contemplated on transport and heavy industries which have in the short term a relatively smaller employment content.

Programmes For Special Areas

19. It is not enough to assess the employment potential of the plan in overall terms. Regional distribution of employment opportunities will have to be attempted. The main difficulty in this assessment is that regional details regarding the central plans and those of industries in the private sector in terms of employment are not yet worked out. But some of the general considerations regarding the direction in which efforts at enlarging employment opportunites in special areas will have to be made, are discussed below.

20. An aspect of employment which deserves special mention is the problem of areas of acute unemployment and under-employment. In some areas chronic under-employment exists and earnings are too low even with reference to average standards for the country. Such situations are not unknown in some of the more developed countries. For instance, in the United States, there are pockets where unemployment is substantially higher as compared to the general level of unemployment in the economy as a whole. Special programmes were taken up in the United Kingdom for depressed areas. Experience of the measures taken in these countries indicates that one of the important pre-requisites for framing policies is a thorough study of such pockets. While the recent studies give some indication of the overall magnitude of the problem, fuller data are needed for different areas, regarding for instance the availability of local skills, the material resources, facilities available, urgent requirements of the community etc. Such surveys should be undertaken in different States and if some special schemes are drawn up for depressed areas by local communities, it may be possible to give them the necessary assistance. The important point is that the foundation of the programmes to increase opportunities available for employment is necessarily based on the interest and initiative of the local people and communities. Cooperative effort by local communities, private enteiprise and the State and Central Governments can make possible a rapid improvement in the levels of living in such areas. The role that local leadership can play in the formulation and implementaion of suitable programmes in such areas is obvious.

21. For reasons stated earlier, the directions in which public policy should proceed cannot be precisely envisaged, at this stage. Conditions of such areas, as are relatively poor in natural resources, may in some cases necessitate planned measures for transferring surplus labour to other parts. But generally it may be that when large numbers of workers move to areas other than their own complications are likely to arise. As such, bringing gainful work to the doors of people in distress may be a better way of dealing with their problems. Migration in suitable cases, however, should not be ruled out Government can increase employment opportunities in such areas by (i) giving priority to them in the matter of location of projects in the public sector unless other considerations justify the location of such projects elsewhere, (ii) providing loans to local businessmen and industrialists at relatively favourable terms, (iii) reserving a certain percentage of contracts in the public sector for persons belonging to these areas, and (iv) adoption of other fiscal measures to induce inflow of private capital. Concrete steps to be taken in problem areas of this kind will necessarily have to await fuller investigations.

Educated Unemployed

22. Unemployment among the educated has to be viewed as a part of general unemployment in the economy. The reason why a country like ours finds a sizeable number of unemployed, and among them the educated, is lack of sufficient development over a number of years to absorb entrants to the labour force. Educated unemployment, however, assumes a special significance mainly because of the following factors: (a) rightly or wrongly there is an impression among the public that investment in education by an individual should yield for him a return in terms of a remunerative job; (b) an educated person naturally looks for a job suited to the particular type of education he has received with the result that there has been an abundance of supply in regard to certain occupations and professions and shortage to others, depending on the development of education in the country. Then, again, there are regional preferences shown by the educated which complicate the problem; and (c) there is a general disinclination among the educated to look for employments other than office jobs.

23. To formulate programmes specially designed to alleviate unemployment among the educated, a Study Group was set up in September, 1955. The Group has recently submitted its report. It has estimated that in the next 5 years, 14.5 lakhs of educated persons will be added to the labour force. The Group has defined persons with and above matriculation and equivalent education standard as 'educated'. On the basis of the report.on a preliminary enquiry on urban unemployment undertaken by the Directorate of National Sample Survey, the Group has placed the number of educated unemployed at 5.5 lakhs. The estimates made by the Group are corroborated by certain other surveys independently undertaken in universities which have been published after the report of the Study Group. The problem to be tackled during the next five years, if educated unemployment is to be eradicated, is the creation of about 2 million jobs for this group. As against this task, the group has estimated that the Central and State Government projects included in the second five year plan are likely to yield about a million jobs. Another 2.4 lakhs of educated persons will secure employment by replacement of persons who would retire in the next 5 years. In addition, the private sector will absorb about 2 lakhs of persons, leaving the size of the problem substantially unchanged during the period of the plan. The Group has emphasized the .regional aspect of the problem and has suggested that in some States like Travancore-Cochin and West Bengal, the situation requires to be carefully watched.

24. According to the Group the question of the educated unemployed cannot be viewed in purely quantitative terms. It is perhaps enough to say that a certain number of jobs are required for unskilled or uneducated categories, but when it comes to making a similar statement with regard to the existing educated unemployed it is necessary to be more specific about the kind of education for which job opportunities are required to be created. The regional and occupational aspects associated with the problem have to be considered separately. Regional immobility among the educated, except at fairly high levels, comes in the way of the fuller utilisation of such personnel. Instances are not wanting where surpluses in certain categories of educated and trained personnel are reported at some employment exchanges, while these very categories are in short supply at others. In such cases adjustment of supply with demand becomes, to a considerable extent, a question of providing suitable incentives and opportunities. The other aspect, namely the occupational, requires considerable advance planning, both in assessing the demand for such personnel and in making arrangements for future supply.

25. Against this background of the magnitude and character of the problem, the Group has suggested certain fields as capable of providing employment opportunities for the educated. The main criterion laid down by the Group for selection of schemes is that these are urgently needed for the envisaged institutional reorientation of production relations and/or that they deserve higher priority in connection with economic development in general. In the former category of schemes the Group has included strengthening of co-operative organisations in the spheres of production and distribution. Their imppr-tance in the context of the social order visualised in the near future needs no emphasis. There seems to be ample scope for expanding organisational, administrative and supervisory training. Production and marketing of goods in small industries, it is suggested, should be taken up by the Cooperatives. The scope for absorption of the educated in actual production in village industries is restricted mainly because of unemployment and under-employment among artisans already engaged in production in this sector. Heavy industries on the other hand will demand technical personnel of a different kind. Between these two lies a large area of small industries which the Group considers appropriate for the purpose of providing employment opportunities for the educated. It has divided industries of this kind into three categories:

  1. manufacturing industries, namely, hand-tools and small tools, sports goods, furniture, etc.;
  2. feeder industries like foundries, forge shops, tool and gauge making shops, automobile shops, machinery parts, electroplating and galvanising shops and so on;
  3. servicing industries like repair shops for automobiles, bic. cles and other machinery.

26. Another group of schemes where it is possible to absorb the educated is Cooperative Goods Transport The programme suggested in this field is the setting up of 1200 intra-city operational units with 5 vehicles on an average, and another 240 inter-city operational cooperatives with an average fleet of 25 vehicles. The Group has also recommended the setting up of orientation camps which would help remove the disinclination on the part of the educated to undertake manual work and to create in them self-confidence and a healthy outlook. Such camps, according to the Group, will assist in discovering the vocational aptitude of the youth and if a liaison is established with prospective employers, it will be possible for the latter to pick up educated persons from the camp for suitable employment.

27. The schemes proposed by the Study Group involve a gross outlay ofRs. 130 crores and are expected to provide additional employment to the tune of 2.35 lakhs of persons. The break-up of the total outlay, recoveries and the employment potential are given in the following table:

Table- III
(Rs. crores)

Schemes Estimated gross outlay Recoveries Net Cost Employment potential (numbers)
Small Scale Industries 84.0 58.3 25.7 1,50,000
Cooperative Goods Transport 20.0 18.0 2.0 32,000
Schemes of State Govts. 19.0 9.5 9.5 53,000
Work and Orientatior Camps 7.1 Nil. 7.1 Nil.
total 130.1 85.8 44.3 2,35,000

Another set of recommendations which the Group has made for removing the hardship felt by the educated youth in having to wait indefinitely for securing jobs are: (i) improvement in the present system of recruitment to Government posts; (ii) provision of hostels;and (iii) establishment of university employment bureaux.

28. The recommendation's of the Study Group require to be implemented on a pilot basis in order to watch the reactions of the educated to such schemes. Suitable provision has been made for this purpose and the Group has been asked to work out the details of these pilot schemes. If the response is adequate, larger pro visions for more extensive experiment in this field could b'e made available.

29. Finally, it should be observed that the problem of educated unemployed calls for long-term measures. Ad-hoc measures designed to alleviate unemployment in the short run can hardly produce lasting results. Judged from past experience, the educated remained out of gainful occupations in part due to the fact that in its evolution the system of education has not been related sufficiently to our needs of economic development. This also explains to some extent why in the midst of unemployment among the educated shortages sometimes arise in the case of certain categories of educated personnel. The expansion of education and training facilities should, therefore, be closely linked to the future requirements of the economy, and the growth of educational facilities in directions, which may accentuate further the problem of educated unemployed should be avoided. There should be systematic examination of openings for educated and trained persons in different categories and the necessary information should be widely disseminated through programmes of educational and vocational counselling, university employment bureaux, etc. Development of the cooperative sector in the rural economy and of small-scale and medium industries will offer growing opportunities for absorbing educated persons in gainful and productive work. Changes in the system of education • should keep in view these and other lines of development envisaged in the second five year plan, so that progressively those elements in the system of education which facilitate absorption and stimulate the expansion of employment opportunities are strengthened.

30. The foregoing analysis shows that with the effort envisaged during the second five year plan, additional employment opportunities will be provided to fresh entrants to the labour force. There will be a small addition to the working force engaged in agriculture, but as a result of the large programmes of agriculture, irrigation and rural community development which are to be undertaken, under-employment will be reduced and, after allowing for additions to the working force in agriculture, income per occupied person is likely to increase by about 17 per cent. In the field of village and small-scale industries the estimates given in this chapter take account only of work opportunities which are in the nature of full-time jobs, so that there will in addition be some measure of relief for underemployed artisans. Educated unemployed persons will also benefit as a result of the implementation of schemes in the plan as well as from those which are specially undertaken with a view to their training and orientation in various occupations.

31. These conclusions suggest that in spite of concerted efforts for the mobilisation of available resources and their optimum utilisation as proposed in the second plan, the impact on the two-fold problem of unemployment and under-employment will not be as large as the situation demands. There is at the same time a limit to the amount of investment which can be put through over the period of the plan. In the light of the emphasis placed on heavy industries, the scope for varying the pattern of investment is only marginal in character and any further adjustment of priorities may not yield much larger results in terms of employment. At the same time it is not always possible, in the existing state of knowledge, to take into account all the ramifications on employment of investments in heavy industries of the type envisaged in the plan. In this connection, it is necessary to stress the importance of implementing the plan so as to maximise its production and employment potential by coordinating complementary investments, planning the use of resources such as water, electricity, etc. which are created by the operation of the plan ensuring that the services of newly created institutions and agencies are brought effectively within the reach of those whom they are intended to benefit. As the plan proceeds, there should be continuous assessment of the additional employment obtained through its operation, so that suitable steps can be taken to ensure that the targets of employment Efre realised.

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