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Cabinet note in a week to appoint officers to monitor NREGA scheme: Planning Commission

By A Staff Reporter

The Planning Commission will move a Cabinet note in next six-seven days to obtain government permission for appointment of evaluation officers to ensure that the money spent on UPA government schemes such as NREGA is not misappropriated, says secretary, Planning Commission, Ms. Sudha Pillai.

Releasing the ASSOCHAM Study on Future Jobs: Employment Challenges in the Capital along with its President Dr. Swati Piramal and secretary general, Mr. D S Rawat,
Ms. Pillai said: “The Planning Commission has already received favourable comments in this regard from all concerned departments including the ministries of finance and Panchayati Raj.” The Cabinet note would be finalized within a week’s time and would subsequently be sent on to government for its approval, she said.

The evaluation officers would fall under the director general of evaluation directorate, which will be within the jurisdiction of the Planning Commission and would initially have nearly 25-30 such officers. Their mandate would be to ensure that money allocated for employment generation in schemes like NREGA is not at all misappropriated by middle men, said the secretary, Planning Commission.

On the issue of the new employment policy, Ms. Pillai said that the Planning Commission has already sent its comments on the new employment policy, which is expected to be announced shortly and will favour all stakeholders in an appropriate manner. The proposed policy will not be anti-industry and take care of all in an equitable manner, she added.

Mrs Sudha Pillai said that the Planning Commission is also in favour of labour reforms particularly the review of the Chapter V B of the Industrial Disputes Act, which stipulates prior government permission in case of enterprises employing 100 or more workers for dispensing with labour by lay-offs, retrenchment enclosure of enterprises.

The secretary elaborated that the new employment policy is being framed in a manner so that it influences future monetary, agriculture, trade, industrial, export and import policies so that these together create maximum employment and ensure inclusive growth.

Mrs. Pillai, however, pointed out that government is currently spending enormous money on child labour prevention to an extent of Rs.42,000 crore, and trying to ensure a minimum 100 days employment guarantee but once the National Employment Policy is announced, all such schemes will become a natural part of new National Employment Policy.

In her remarks, Dr. Piramal quoting findings of ASSOCHAM Study said that it has projected 87.37 million new jobs by 2015 with a very significant share of 32 per cent by the manufacturing sector followed by trade and construction. The next most important source of new employment is expected to be trade with 24.24 million new jobs followed by construction with a figure of 15.13 million.

The study further says that agriculture which accounts for a major share in total employment now is likely to be minor contributor to new employment. The financial services will almost double its employment size, though still has a small (3.4%) share in total employment.

Within the manufacturing sector, textile products, food products, beverages, transport equipment, metal products, leather products and machinery are expected to contribute the major part of increase in employment, points out the report.

Employment in IT and ITeS is expected to grow very fast to increase from 1.62 million in 2007 to 3.28 million by 2015. Employment on account of foreign tourism, i.e. generate and therefore accounted for in different sectors such as trade, transport, manufacturing and services is also expected to increase rapidly from about 8.88 million in 2007 to 18.11 million in 2015.

According to ASSOCHAM, manufacturing will be the highest employment potential sector because after agriculture, it accounts for the largest share of employment at 12.5% among different divisions of economic activity and a faster growth of employment in it, therefore would mean addition of a large number of jobs.

A one per cent growth in employment in manufacturing sector would mean over 6.25 lakh new jobs. Second, employment elasticity of this sector has not only been much higher than average (0.51 as against 0.32 in recent times.

The report suggests that if manufacturing GDP is made to grow at 10 per cent per annum, its employment will grow at over 5 per cent, which would mean an addition of over 30 lakh new jobs every year. The 11th Plan target of 4 per cent employment growth for manufacturing does not seem very high. It could be higher if this growth is based on faster growth of products groups like textile products, food products, beverages and leather products.

Projections about jobs are made on the basis of certain assumption, which include first due to the global slowdown and current GDP growth of the economy is not likely to reach the target of 9 per cent as set for the 11th Plan but as the economy had already grown at 9 per cent in the first year of the Plan (2007-08) and the emerging global and domestic trends suggests an early recovery to a high rate during the last two years of the Plan, it is assumed that the GDP growth for the 11th Plan would average to about 8 per cent per annum.

The growth rate during the subsequent three-year period (2012-2015) is projected to be 9.5 per cent. Second, employment elasticity of GDP growth is assumed to follow a declining trend in most sectors so that in aggregate, it is estimated to be 0.30 during the 11th Plan period and 0.27 during the subsequent three years period as against the elasticity of 0.32 observed during 1994-205 and 0.53 in the shorter period, 2000-2005.

This is due to increasing compulsion of efficiency and technological changes required to meet them. Third, secondary sector especially manufacturing sector followed by construction is expected to grow faster than in the past and faster than the services sector, the former growing at 10 per cent and latter at 9.5 per cent during 2007-12 and former at 11.5 and latter and 11 per cent during 2012-15. Fourth, agriculture is assumed to be growing at 2.5 per cent during 2007-12 and 3.5 per cent during 2012-15, but its employment elasticity is expected to be low and declining at 0.25 during 2007-12 and 0.10 during 2012-15, as against 0.33 observed during 1994-2005.