Download Reaching Inclusive Growth Through Employment Guarantee

Reaching Inclusive Growth Through
Employment Guarantee Programme:
Outline of a Strategy
Indira Hirway
Centre for Development
Alternatives, Ahmedabad
JNU – IIAS Conference, 28-29 June
2007
This Presentation
• Argues that a well designed EGP can be viewed
as a an important component of a full
employment strategy in a developing country
like India
• Such a strategy can lead to economic growth
that is inclusive in terms of employment by
addressing
• Some of the major concerns that India is facing
with respect to its growth that has caused
multiple exclusion in the economy.
What is Inclusive Growth With Respect to
employment?
• Generation of productive employment (decent
work) for labour force in the economy, as
employment is a key to inclusive growth,
• Employment generation in all sectors, regions
and for all socioeconomic groups
• Particularly (1) for poorer sections of population,
(2) backward regions, (3) lagging sectors and (4)
ST / SC / OBC / women etc
• Inclusion of small enterprises / producers
preferably in a decentralized framework
• Controlling inequalities and disparities
ELR Strategy or Employment Guarantee for
Achieving Full Employment
• New Deal was the first major programme in
industrialized countries that showed how
employment generation by government can
promote full employment
• This approach is now developed in to a major
strategy under which government is seen as
Employer of Last Resort (ELR) to promote full
employment in industrialized countries (Minsky,
Abba Lerner, Philip Harvey)
• In the case of developing countries also state
sponsored EGP can lead to full employment
though the context will be different.
The Indian Scene of Employment
• The high growth rate has failed miserably to
generate adequate ‘decent’ employment for the
labour force
• In fact, there is deceleration in aggregate
employment generation in spite of high growth
• Neo liberal policies promote technical progress,
i.e. high growth in labour productivity leading to
high growth of GDP, but lack any built in
mechanism to ensure full employment
• Higher growth or labour flexibility though offered
as solutions are not real solutions
Manifestation of Exclusion / Hurdles to Full
Employment
• Low productivity leading to subsistence
status
• Low incomes and low levels of living
• Inadequate avenues for productive
employment
• Poor quality of employment in terms of
social protection
Contd..
• Supply side constraints: poor physical &
economic infrastructure
• Poor social infrastructure and low human
capabilities / skills
• Degradation & depletion of natural resources
which support livelihood of 60 % population
• Unstable and lagging agriculture
• Rising inequalities and disparities
• High incidence of poverty with poor at the
bottom frequently starving
• Demand side constraints
An Alternative Approach
• In stead of addressing these constraints directly,
the neo liberal policies advocate a development
path that focuses on economic growth through
privatization, liberalization and globalization
• And when this path poses problems, we think of
controlling technical progress or using surpluses
for social sectors
• Why can’t we start with what we have and what
we lack rather than what others have
EGP can construct
• Social infrastructure (for care, education, health, water &
sanitation) for improving human capabilities / skills, and
quality of life
• Economic infrastructure (for example, roads) to promote
economic growth,
• Infrastructure for agriculture (WSD, irrigation, etc)
• Natural capital building (related to land development,
water augmentation, forestry) for raising productivity of
workers in allied activities
• Assets (farm ponds and other asset building) for private
farms / enterprises particularly for small producers
EGP and Gender
• Women’s unpaid work consists of (1) drudgery like
collection of fuel, fodder, water etc, (2) child care and
other care, (3) other low productivity activities that
deprive them from accessing productive activities
• These can be seen as ‘hidden vacancies’, as many of
these activities can be shifted to the market through
public provisioning, infrastructure development and
public services, and this in turn can release women for
productive work
• EGP can substitute portions of this unpaid work by
creating suitable assets that can reduce burden of
unpaid work of women (and men) that is particularly
taxing for the poor.
• EGP has proved to be attractive to women, who can also
gain in terms of employment and wages
Unpaid work of Poor and EGP
• Non-market economic Activities: Acquiring / Collecting
basic necessities like water, fuel wood etc
• Non-market economic activities: collection of raw
material for income generating activities (fodder for
animal husbandry, bamboo for craft, raw materials for
manufacturing - NTFP)
• Non-market subsistence production at low productivity
(crop cultivation, subsistence fishery, forestry etc)
• Unpaid domestic work: care related activities
• Unpaid domestic work: household repair in non durable
shelter
• Unpaid work: Traveling
Role of EGP: Short Run
•
•
•
•
Reduce drudgery
Improve quality of life
Improve public provisioning / infrastructure
Improve productivity / technology in income
generating activities
• Release women and poor for productive
activities
• Promote capital formation
• Improve labour absorbing capacity of the main
stream economy
EGP in the Long Run
• Promote labour intensive development
• Encourage sustainable development
• Increase labour productivity / technology in
economic activities
• It engenders development
• Promote manufacturing and structural
transformation in the economy
• Integrate small producers / poor in to the growth
process
• Participate in the world trade based on
advantages
EGA A Full Employment Strategy
• Employment guarantee for the poorest to ensure
their full employment
• Insurance in terms of employment for the poor in
crisis
• Labour intensive growth for the economy in the
second round through assets that generate main
stream employment
• Rising aggregate demand that will push up
growth along with changing its composition, and
push up employment
EGP is only a component / Starting point
• EGP is not for creating a permanent army of unskilled
workers – it is successful when it is not needed
(Dantwala)
• It is a tool for transition of the economy from labour
surplus economy to labour using economy
• It requires productive use of the assets generated
including infrastructure
• It requires a set of supplementary policies in the areas of
skill formation, credit, marketing, institutions etc
• It needs a long term vision and suitable interventions
EGP based strategy is not a Low Income
Strategy
• This strategy involves up gradation of
technology and improved labour
productivity
• It incorporates globalization based on
comparative advantages
• It promotes economic growth that is broad
based and inclusive
• It answers some of the concerns that India
is facing today
Assessing NREGA
• NREGA lacks a long term perspective in
designing and in implementation
• Weak planning component: (1) lack of
perspective planning, (2) lack of convergence
and (3) lack of multi level planning
• Designing problems of NREGA: role of
institutions / social mobilization not recognized
• Lack of commitment, and poor supervision &
monitoring
• Lack of political strategy to address structural
issues
Concluding Observations
• This is an outline of a strategy, needs
further detailing
• We are not recommending some thing that
is not doable, not feasible.
• We have an EGP Act, an EGS and we
have to build on it