REDUCING UNEMPLOYMENT

Rather than aiming at increasing the growth rate, the government must specifically aim at reducing the unemployment level in the country. Give arguments For and Against this view. Though unemployment has been one of the major socio-economic problems in the country since long, yet during the past about a decade unemployment has been increasing rather rapidly. It is ironical that while the average annual growth rate of the economy during the last one decade has been close to 7 per cent, there has not been any corresponding reduction in the unemployment rate and its incidence has in fact increased. Even in case of those who are employed in the rural and urban areas, there is a wide gap in the wages earned by them for the same job. In successive Budgets and Plans, the policy makers talk of high growth rate, but no specific and effective schemes have been unveiled for reducing the scourge of unemployment. Many feel that it is high time that the government comes out with a specific scheme for substantially reducing the incidence of unemployment in India. Arguments For the View (a) During the past about 15 years the average annual growth rate has been high at more than 6.5 per cent. But that notwithstanding, the incidence of poverty in the country has not reduced proportionately, and even today the percentage of people living below poverty line is about 25 per cent. It implies that while the income levels have gone up, only the well to do people have largely been benefited. This trend can only be reversed if more employment more opportunities are generated, particularly in the rural areas. (b) India is endowed with a large number of trained and skilled human resources and most of the developed countries are scarce in this regard. The country must take advantage of this situation by utilising its human resources to the optimum. This would not only provide opportunity to most of the labour force to contribute to the nation-building, but would also remove economic disparities and poverty. (c) The surge in IT and Telecom sector has resulted in a digital divide in India, between the urban and educated people, on the one hand, and the rural and the illiterates, on the other. The only way to bridge this gap is to generate more employment opportunities, particularly in the rural areas. (d) India cannot achieve hyper growth rate on sustainable basis without providing fruitful employment opportunities to its unemployed. Hence, rather than concentrating on high growth rate, more employment generation must be targeted. Arguments Against the View (a) It is well-known that as a result of trickle down effect, high growth rate automatically takes care of all the problems of the economy, including that of unemployment. (b) Labour intensive methods of production are generally less productive. That is why even more populous country like China has followed the capital intensive technologies for mass production. The resultant benefit of industrialisation is more employment opportunities in future.

(c) While following the policy of achieving high growth rate of the economy, the country is also taking care of the needs of those who desperately need employment to meet both ends. The recent Employment Guarantee Schemes are an example. (d) Employment opportunities can only be created by rapid growth of the industries and the services sectors. This is exactly what is being done, and the employment generation is going to follow soon.