Plan panel to set up task force on employment

NEW DELHI, FEB 12: The Planning Commission has decided to set up a special task force on employment, to be headed by Planning Commission ...

NEW DELHI, FEB 12: The Planning Commission has decided to set up a special task force on employment, to be headed by Planning Commission member Montek Singh Ahluwalia. The decision follows the directive from the Prime Minister to chalk out a strategy to bring down unemployment levels in accordance with the targets set in the National Agenda for Governance.

Other members of the task force will include P Visaria, director, Institute of Economic Growth; K Sundaram, Delhi School of Economics; N Banerjee, Centre for Studies in Social Sciences; S Gangapadhyay from Indian Statistical Institute. The advisor for labour, employment and manpower of the Planning Commission will function as the convenor of the task force.

During the Plan period, the domestic labour force is targeted to grow at the rate of 2.54 per cent per annum and achieve a projected employment level of about 53 million by the end of the Ninth Plan.

This growth is to primarily come about due to change in age structure and higher participation rateof the labour force.

According to the Planning Commission estimates, work opportunities will increase by another 59 million during 2002-07 and mildly reduce to 56 million in 2007-12.

quot;Unless public saving is enhanced, it would not be possible to attain the higher growth path as proposed by the Plan panel. However, an alternative to this path would be to increase the inflow of foreign savings through a wider current account deficit,quot; Plan panel sources said.

quot;Even if sectoral growth takes place at an average rate of seven per cent and sectoral growth elasticities are taken into account, the work opportunities are poised to lead to a decrease in the unemployment rate from 1.9 per cent in 1996-97 to 1.47 per cent in the terminal year of the Plan,quot; sources said. At this level, unemployment is estimated to come down to the level of as much as a million people in absolute terms by the end of the Plan period.

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Sources point out that the model incorporated in the Ninth Plan envisages a steady growth betweenthe terminal year of the perspective period and the base year in a manner which ensures both the inter-sectoral consistency as well as a consistency between the investment requirements and the availability of investible resources.

Contrary to this, as per the model adopted by the Planning Commission a steady growth path yields a 6.5 per cent average growth per annum over the perspective period of 15 years. Skeptics feel that this would raise the unemployment rate from the 2.06 per cent in the base year of the Ninth Plan to 2.5 per cent in the terminal year of the perspective period 2011-12.

An alternative growth strategy aims at an average annual growth rate of 7.5 per cent during the perspective period and reduces the unemployment rate to - 0.6 per cent in the terminal year.