LABOUR AND EMPLOYMENT
I
LABOUR THE number of Industrial Training Institutes for training craftsmen increased from 163 at the end of March 1961 to 3 56 March 1969. The seating capacity increased from 43,000 at the end of 1960- 61 to 114,000 at the. end of 1965-66, thus exceeding the Third Plan target of 58,000 additional seats. It further increased to 147,000 at the end of March 1969. In order to supplement the institutional training provided through Industrial Training Institutes, the apprenticeship training programme was instituted. Under the Appren- ticeship Act, 1961, 195 industries and 50 designated trades where apprentices are to be engaged have been specified. Nearly 37,000 apprentices are at present undergoing training in more than 3000 establishments in the public and private sectors. A Central Institute for Research and Training in Employment Service was set up in 1964 for conducting research in the field of emplayment and imparting training to employment officers. During the same year, the Indian Institute of Labour Studies was established to train the industrial relations officers of Central and State Governments.
22.2. The Employees' State Insurance Scheme expanded steadily. It covered about 3.78 million insured persons and 3.76 million insured persons' families spread over 313 centres at the end of October 1969, as compared to 1.94 million insured persons and 0. 68 Million insured persons, families spread over 120 centres in March 1961. The medical, cash and other benefits extended to workers increased from about Rs. 6 crores in 1960-61 to Rs. 28 crores during 1968-69. The benefits received by workers during 1961-62 to 1968-69 amounted to Rs. 134 crores. Under the Coal Mines Labour Welfare Fund scheme, the expenditure on medical, educational, housing and other facilities increased from about Rs. 1.63 crores in 1960-61 to about Rs. 4.33 crores in 1968-69; the value of benefits under the scheme amounted to Rs. 28 crores. during 1961-69. The Employees' Provident Fund scheme was extended to about 5. 38 million workers in 123 industries and about 45,000 establishments by June 1969 as against 2.9 million workers in about 46 industries and 12,000 establishments in 1961. The total contributions under the scheme increased from Rs. 266 crores in 1961 to Rs. 1391 crores by June 1969. The rates of contribution were raised from 6-1/4 per cent to 8 per cent in 81 industries during the same period. The Coal Mines Provident Fund scheme covered 1327 coal mines and ancillary organisations benefiting nearly 349,000 workers by September 1969. The total contributions increased from about Rs.27 crores as at the end of 1960-61 to Rs. 91 crores by September 1969. The worker's education programme which was initiated towards the end of the Second Plan made rapid progress. Over 921,000 workers and 17,000 worker teachers had been trained up to July 1969. Measures were taken to provide workers with more facilities in the form of welfare and recreational centres and holiday homes. The number of consumer cooperative stores and fair price shops set up for workers was 2,760 towards the end of 1968-69 covering about 69 per cent of industrial establishments employing 300 or more workers. The coverage was about 95 per cent in the case of Central public sector undertakings.
22.3. Labour relations continued to be regulated by the protective legislative measures introduced in earlier Plan periods and the tripartite arrangements. A mention may be made of the enactment of the Payment of Bonus Act, 1965, Shops and Commercial Establishments Act and Labour Welfare Fund Acts in States. A National Safety Council was set up in 1966. Out of the 22 Wage Boards set up so far covering almost all the major industries nineteen have submitted their reports. Under the Minimum Wages Act, 1948, minimum wages 'were fixed and periodically revised by State Governments in respect of various agri- cultural and other trades.
22.4. In December 1966, the Government of India had set up a National Commission on Labour to study and make recommendations on various aspects of labour including wages, working conditions welfare, trade union development and labour-management relations. The Commission submitted its report in August 1969. The Report is under consideration of the Union Government in consultation with the State Governments and the employers' and workers' organisations.
22.5. The expenditure incurred during 1961-69 on labour welfare and craftsmen training programmes was :
TABLE 1 : Expenditure incurred during 1961-69 on Labour
Welfare and Craftsmen Training Programmes
(Rs. crores)
year centre union states total
territories
(1) (2) (3) (4) (5)
1961-66 32.7 2.2 20.9 55.8
1966-69 21.0 0.8 13.7 35.5
22.6. Training.-The Craftsmen Training and Employment Service programmes which were treated as Centrally sponsored schemes up to 1968-69 have been transferred to the States during the Fourth Plan. The Directorate General of Employment and Training will be responsible for the overall co-ordination of the programme in States and Union Territories by laying down standard for training and syllabus and for the
226 FOURTH FIVE YEAR PLAN
control of technical quality. The Directorate will also conduct the training of highly skilled craftsmen the apprenticeship programme in Central establishments and the training programme for instructors in the Central Training Institute.
22.7. Only a marginal expansion of the seating capacity of the industrial training institutes from 147,000 to 150,000 to cover new trades such as tool and die making, electronics and chemicals, is envisaged in the Fourth Plan as this is considered adequate to meet the likely requirements of craftsmen. In view of this, large addi- tional capital investment will not be required. It is proposed to diversify the existing seating capacity by reducing certain trades where there is inadequate demand, introducing more popular trades and consolidating the facilities in the existing institutes. Three institutes for training special categories of craftsmen for industry and supervisory staff are proposed to be established in the early years of the Fourth Plan. These are the Advanced Training Institute at Madras, the Central Staff Training and Research Institute at Cal- cutta and the Foreman Training Institute at Bangalore. Increasing emphasis will be placed on the apprenticeship programme including provision of basic training facilities. The number of apprentices is expected to increase from the present level of 37,000 to about 75,000 by the end of the Fourth Plan.
22.8. Employment Exchanges.-There was a steady increase in the number of employment exchanges including University Employment Information and Guidance Bureaux from 312 at the end of March 1961 to 458 at the end of October 1969. The employment service is proposed to be expanded by strengthening the employment exchange machinery, university, employment information and guidance bureaux, vocational guidance and counselling centres, and employment market information programme for collection of employment data.
22.9. The activities of the Employees' State Insurance Corporation are proposed to be expanded in order to provide hospitalisation to families of all insured workers, to cover shops and commercial establishments in selected centres as also non-power factories employing ten or more persons, running staff of Road Transport Undertakings, and to cover all centres having an industrial concentration of 500 or more insurable workers. Programmes for welfare centres, holiday homes and recreational centres have been included in State Plans. The workers education programme is proposed to be reorganised in the light of the experience gained so far.
22.10. The industrial Safety 'Health and Hygiene Divisions of the Central and Regional Labour Institutes are proposed to be strengthened. The activities of the National Safety Council will be intensified. The Directorate General of Mines Safety is expected to concentrate on more effective administration of mine safety legis- lation Greater emphasis will be placed on promoting safety practices and on the development of indigenous mine safety equipment.
22.11. Stress will be laid on strengthening labour administration for better enforcement of labour laws, research in labour relations and labour laws, expansion of training programmes for labour officers, introduction of training in industrial relations for management personnel and for university professors and lecturers associated with the labour subject, evaluation work study, inspection and improvement of labour statistics. The Labour Bureau proposes to conduct a comprehensive family living survey among industrial workers in 1970-71 in the field of industrial relations, priority will be accorded to the growth of a healthy trade union movement, the promotion of collective bargaining and the raising of productivity through labour-management cooperation
22.12. Outlay.-A provision of Rs. 39.90 crores has been made in the Fourth Plan for labour welfare and draftsmen training programmes. Of this Rs. 10.00 crores will be in the Central Plan, Rs. 27.02 crores in the State Plans and Rs. 2.88 crores in Union Territory Plans.
II
EMPLOYMENT 22.13. In the past, the Planning Commission used to present estimates of the backlog of unemployment at the beginning of the, Plan, of the estimated increase in the labour force during the plan period and of additional employment likely to be created through implementation of the Plan as forumulated. In view of the considerable divergence of opinion regarding the appropriate defini- tions of and suitable, yardsticks for measuring unemployment and under-employment in rural and urban areas and in view of the widely differing magnitudes of unemployment worked out on the basis of various sources such as the Census, the National Sample Survey and the Employment Exchange data, it was felt that the various aspects needed a closer scrutiny. Accordingly, the Planning Commission set up in August 1968 a Committee of Experts to enquire into the estimates of unemployment worked out for the previous Plans and the data and methodology used in arriving at them and to advise the Planning Commission on the various connected issues. The Committee has submitted its main conclusions and recommendations pending the finalisation of the report.
22.14. In the opinion of the Committee, the data available to the Planning Commission for estimating unemployment and under-employment in the past have not been adequate and that the conclusions based on them were, therefore, unavoidably subject to an unknown margin of error. Many of the limitations of the estimates of labour force, employment and unemployment are inherent in the socio-economic conditions of our country and cannot be wholly overcome by the conceptual refinements or improvements in the technique of estimation. While appreciating the desire on the part of general public for precise estimates on such vital problems as employment and unemployment, the Committee has observed that in the nature of our socioeconomic situation, such precision is not possible. The concept of labour force as adopted in developed economics is unsuitable for an economy like ours with its preponderance of self-employment and production within the house-hold enterprises. The main problem is that a sizeable proportion of labour input in household enterprises is provided by some members of the famliy
227 LABOUR AND EMPLOYMENT
who have only a partial attachment to the labour market. They work in the family enterprise, without receiving any wages. They work on family farms and similar enterprises as and when required, and when they do so, technically they become part of the `labour force', but when there is no such work, they generally revert to household work. In all probability, they would neither seek work nor be available for `outside work', This, while their inclusion in labour force-and in the calculation of unemployment-becomes misleading, their total exclusion would also fail to reflect the reality of the economic situation. In an economy like this, there is very little open or outright unemployment throughout the year, but there would be considerable seasonal unemployment or under-employment is important but its measurement solely in terms of man-years is inappropriate because the income levels of under-employed, the nature of the additional work desired by them and the terms on which their labour will, in fact, be available are all relevant aspects of the problem.
22.15. As regards estimation of employment potential generated during a Plan period, the Committee has observed that reliable data are necessary on additional employment per unit of investment and/or increase in output in different sectors for making such estimates. The relevant ratios not only differ from industry but are seldom the same at the margin as on the average for the same industry.Changes in technology and organisation also necessitate changes in the technology and organisation also necessitate changes in the co- efficients. While estimates of employment potential may be possible in limited sectors of the economy, it may not be feasible for large segments of the service sector and agriculture, in view of paucity of reliable data. It is also important to recognise that in a situation characterised by household and small-scale enterprises based largely on family labour and the prevalent differences both in the attachment of family labour to such enterprises and in the intensity of their employment, it is not possible to judge how a given increase in employment potential is likely to get distributed among the labour force, even if such an increase could be somehow estimated. This is so particularly in the construction sector, which accounts for sizeable investment activities in the Plan, as in reality, construction tends to be seasonal activity and a substantial proportion of the persons engaged in construction projects tends to be employed on daily or weekly wages. The construction employment generated is therefore, likely to be spread over a large number of persons than the estimates generally made in terms of full-time employment for 300 days. After examining various aspects, the Committee has suggested that the most that can be attempted by way of estimation is the likely growth of employment in a few segments of the economy and for the rest, reliance has to be placed primarily on recording at frequent intervals the changes taking place in the composition of the labour force, its industry-wise distribution, the wage rates for different types of labour, the intensity of employment and the numbers seeking employment. Such studies could perhaps be done through quinquennial sample surveys, which would help to throw light on the trends in labour market and make possible dependable projections of the trends in employment and unemployment in the future.
22.16. In the light of the above, the Committee has observed that the estimates of labour force, additional employment generated and unemployment at the beginning or end of a Plan period, presented in one-dimensional magnitude are neither meaningful nor useful as indicators of the economic situation and that the method adopted by the Planning Commission so far might be given up. The Committee has stressed that the character of our economy and consequently that of the labor force, employment and unemployment is too heterogeneous to justify aggregation into single dimensional magnitudes. It has, therefore, recommended that studies should be undertaken to get information on the different segments of labour force, taking into account such important characteristics as region, sex, age, rural- urban residence, status or class of worker and educational attainment and to identify the demand likely to be generated for particular categories of labour as a result of the developments envisaged under the Plan. It has further suggested that attempts should be made to obtain separate estimates of the level of unemployment during different seasons of a year among various homogeneous groups of the labour force. Various improvements have also been suggested in the collection and presentation of data collected through population Census, National Sample Survey, employment Market Information and Employment Exchanges. In view of the Committee's recommendations no attempt has been made in this document to present data on the lines followed in previous Plans.
22.17. The Committee is of the view that the problem of unemployment is most serious for workers who seek wage employment and in the course of development, both their proportion in the labour force and their characteristics are likely to change. Special care should, therefore, be taken to collect information regarding their position in greater depth and at short intervals.
22.18. Though of late attention has been focussed on unemployment among certain categories of highly educated or trained persons such as engineers, the problem is perhaps more acute, at any rate in terms of numbers, for those who are only nominally educated in the sense that they have not acquired adequate proficiency in any vocation. Many of these nominally educated are probably in the category of persons who leave schools before matriculation or obtain a bare pass class in higher examinations. The Committee has emphasised that the problems of this group need closer study.
22.19. Through its Employment Market Information programme the Directorate General of Employment and Training has been collecting information on employment regularly from all establishments in the public sector and non-agricultural establishments in the private sector employing 25 or more workers up to 1965-66 and 10 or workers thereafter. The programme does not cover employment in agriculture and household establishments, the self-employed and the defence forces. On the basis of information available from this source, employment increased from about 12.09 million at the end of 1960-61 to about 15.46 million at the end of 1965-66 or by about 28 per cent, the average annual growth rate being 5 per cent during the Third Plan Period. The growth of employment
228 FOURTH FIVE YEAR PLAN
in 1966-67 was considerably lower at about 0. 8 per cent and during 1967-68 it was almost negligible. In 1968-69, the employment, however, increased by about 2 per cent partly reflecting signs of economic recovery Industry-wise analysis of employment growth is given below :
1Covers all public sector establishments and non-agricultural establishments in the private sector employing 25 or more workers.
2Covers all public sector establishments and non-agricultural establishments in the private sector employing 10 or more workers.
3In complete coverage.
22.20. In a recent report on the World Employment Programme, the International Labour Organisation has forcefully argued for the integration of employment creation to economic development through the maximum possible productive use of available labour to accelerate economic growth and more particularly, to substitute labour for scarce capital where this is economically feasible. The International Labour Organisation has suggested that this could be attained through a strategy of development involving comprehensive programmes of rural development, labour intensive public works programmes and fuller utilisation of industrial capacity, promotion of labour intensive industrial products for domestic and foreign markets and application of economically sound labour intensive techniques in industrial production. The adoption of such a strategy will have far reaching implications for investment planning. There will be need for more investment (at least of certain kinds) in "human as compared with physical capital". A greater volume of investment will have to be directed to rural development rather than to urban development. Investment plan will have to give some preference to small scale over the large scale projects. A shift in investment towards economically sound labour intensive industries rather than capital intensive industries will have to be necessary. As a corollary it will also be necessary to adapt the choice of techniques and product mix to this approach. Investment in capital intensive industries would, as a corollary, have to be limited to those industries in which only intensive technology is available and necessary to exploit particular natural resources of the country. More industrial investment will have to be directed to the production of essential rather than non- essential consumer goods. This is a necessary counterpart to any policy for employement promotion.