Financial Daily from THE HINDU group of publications
Thursday, May 02, 2002
Industry & Economy
`TN needs to promote self-employment'
CHENNAI, May 1
A STUDY on employment perspectives in Tamil Nadu has found that there is a need to follow strategies that promote the growth of the informal sectors, particularly in the high-income areas.
The study, carried out by a State Government department, notes that institutional arrangements for financing self-employment ventures need to be promoted and the existing region-wise position of the non-performing assets of lending institutions studied carefully to diagnose the problem and to adopt appropriate measures such as imparting skills and training, especially in marketing.
In the rural areas, institutional arrangements that promote home-based work linked with marketing offer good scope.
As the study points out, the net addition to the fast growing labour force combined with the backlog of unemployed and under-employed persons, poses a challenge to development planning in general and manpower planning in particular.
With about 30,000 technically qualified persons coming out of polytechnics annually and another 22,000 graduates from engineering colleges each year, the availability of technical manpower is growing at a faster rate along with an annual addition of about four lakh persons with collegiate education.
This pool of educated manpower needs to be properly utilised by matching jobs with qualifications and expectations.
As is revealed in the census data of 1991 and 2001, which the study relies upon, Tamil Nadu's workforce has been increasing at a faster rate than the growth of population.
During the 1980s, the population grew at an annual rate of 1.44 per cent per annum, while the working population increased at an annual rate of 1.82 per cent.
As the study notes, while the growth rates for the total population as well as the working population have shown decelerating trends during the 1990s, the working population increased at a faster rate of 1.40 per cent per annum as against the population growth rate of 1.07 per cent per annum.
Over the years, the State's workforce has undergone some significant changes.
The proportion of workers in the self-employed category declined while that for casual employment increased steadily, particularly in the rural areas.
Between 1977-78 and 1999-2000, the rural casual employment as a proportion of total rural employment increased from 29.7 per cent to 37.3 per cent at the national level. For Tamil Nadu, it was 36.9 per cent and 51.5 per cent.
Even in the matter of the proportion of casual employment to total employment, Tamil Nadu's figure was higher than the national average. On an all-India basis, casual employment accounted for about a third of the total employment, while it was 42.2 per cent for Tamil Nadu.
The high percentage of casual employment means that there is lack of job security, frequent changes of work place, increasing exposure to exploitative informal contractual arrangements, intermittent nature of work and consequent high-level income instability and poor working conditions.
The study notes that the growth of aggregate income at both the State and the national levels does not guarantee increased income and consumption in favour of the poor due to distribution problems.
The Net State Domestic Product (NSDP) for Tamil Nadu was Rs 76,971 crore in 1999-2000. The share of the primary, secondary and tertiary sectors in the NSDP was 19 per cent, 31 per cent and 50 per cent.
The aggregate employment in the State for 1999-2000 was 289.69 lakhs. The share of the primary, secondary and tertiary sectors in the aggregate employment was 50 per cent, 24 per cent and 26 per cent. This means that the dissimilar distribution of income and employment had resulted in about half of the working population contributing less than one-fifth of the NSDP.
The average value added per worker in the State increased from Rs 18,083 in 1993-94 to Rs 26,570 in 1999-2000 at constant prices, an annual compound growth rate of 6.62 per cent. For the corresponding period, the average primary sector income per worker increased from Rs 8,763 to Rs 9,989, an annual growth of only 2.21 per cent.
Not only is the average value added per worker in the primary sector low, its rate of growth is also much slower compared to the secondary (4.61 per cent) and tertiary sectors (8.5 per cent).
The bulk of the tertiary sector income is concentrated in the urban areas. Also, while the increasing contribution of the tertiary sector in terms of income is expected to impart overall stability to the growth of the economy, the differential sub-sectoral growth pattern of the State income has wider implications for income distribution, including rural/urban imbalances.
There is, therefore, a need to create employment opportunities of the right quality that can match the rising expectations of the labour force, particularly new entrants with better education from rural areas, the study notes.
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