Prime Minister of India - Dr. Manmohan Singh

Government to emphasise on employment-led growth - Prime Minister's speech at the Shram Awards Function

"I am happy to be amongst you today for this year's Shram Awards function. Let me begin by felicitating all the distinguished award winners for the past two years - 2002 and 2003. Today, we have an opportunity to honour and recognize your commitment your dedication and your diligence in the service of the nation. Your efforts have been exceptional and outstanding, and in recognizing this, the nation is in fact acknowledging the contribution of our entire working class in the task of nation building. I congratulate you for your solid achievements, and I wish you many-many more years of productive service in the cause of nation building enterprise.

Mahatma Gandhi had once said, 'A nation may do without its millionaires and without its capitalists, but a nation can never do without its labour'. India's significant industrial achievements since independence have been realised through the hard work and dedication of our workers and our farmers. Indeed, it has been your efforts, coupled with new and better scientific and technological inputs, that has made it possible for us to achieve self-reliance in many areas. Both in organised industry and in the informal sector, your efforts have helped us produce import substitutes built up vital export capacities and have enhanced the spirit of innovation and excellence which is the solid basis for building a new India free from the fear of want and exploitation .

Despite these achievements, however, we cannot afford to be complacent. The task of modernising our economy, the task of nation building and of building a competitive economic environment in a just and inclusive society is a long and arduous one. In the globalised world of today, where economies of all countries, both developed and developing, are increasingly getting inter-linked and inter-dependent, we are faced with the twin challenges of competition and widening disparities. Disparities can be across countries and also within a country, across different sections of society. Our government recognises that the task of addressing these challenges necessarily involves all sections of society, in particular, India's working classes.

In this context, I wish to underline that our Government will emphasise employment-led growth, in particular, focusing on providing every citizen an opportunity to work. The last few years have seen the phenomenon of jobless growth and we need to reverse this trend so that more growth translates into meaningful results for the working classes. I, therefore, propose to you that the time has come for us to add to the call for 'Garibi Hatao' a new slogan for our times: 'Rozgar Badhao'.

To achieve this end, our Government has planned several strategies. These include the following:

Firstly: We propose to launch an extensive Food for Work programme in 150 backward districts of the country as a first step towards a national employment guarantee. The goal of this programme is to provide 100 days' employment to all able-bodied rural persons. The preparatory work for this programme has been completed and once the approval process is completed, which I expect within the few days, we intend to launch it within the next few weeks. In the next few years, this Food for Work programme is to be converted into a National Rural Employment Guarantee programme based on a National Employment Guarantee Act. A draft bill on this subject has already been prepared by the National Advisory Council and is currently under examination.

In order to achieve the objective of having job intensive growth, attention will have to be paid to agro-processing, rural industries and the informal sectors. Our government is committed to providing a favourable policy environment and direct support for the growth of these sectors through technological upgradation, skill enhancement, credit support and marketing assistance. We have already constituted a Commission to examine the problems of enterprises in the informal sector which will come up shortly with recommendations on the nature and scope of assistance that will be required by these enterprise from the government.

Employment can also be generated for unskilled and semi-skilled labour through massive investment in the infrastructure sector. As creation of modern infrastructure is a top priority for our government, we expect this to translate into substantial job opportunities. My esteemed friend and colleague, Shri Lalu Prasadji has assured me that the Railways will be the front runner in building of our national infrastructure.

The skill levels of our workforce is an area of concern. The quality of manufacturing output and the wages paid to labour are critically dependent on the quality of labour force. Investment, particularly of FDI, is based on availability of quality labour. For improving incomes and also productivity and quality, we will need to upgrade very substantially the skill levels of our workers across all sectors. This requires better training facilities. Of a labour force of 397 million, almost 67% is either illiterate or suffers from limited literacy levels. Significantly, only 5 percent of workers in the age group of 20-24 years have vocational skills. Even amongst the educated unemployed, few have vocational skills. A solution is self-evident: we will need substantial investment in skill upgradation and vocational training. This is required to enable us to create a large and expending pool of skilled workers. Eventually, any strategy to generate employment must ensure that all new entrants to the workforce are equipped with the requisite skills for high productivity and high quality work.

In order to achieve this, we need to think of innovative solutions. While strengthening and modernizing our Industrial Training Institutes (ITI) and the Apprenticeship Training Schemes, we need to realize that there must be active involvement of industry- both in the private sector and in the public sector in the task of curriculum design and management of these programmes. Here, we have much to learn from other countries, particularly Germany, where industry participates actively in apprentice training programmes and, SE Asia, where industry is actively involved in the operations of training institutes.

The determinants of national development have changed in recent times, and are certain to keep evolving in the foreseeable future. A rapid rise in levels of education, high rates of technical innovation and application, faster and cheaper communication - all of these are factors accelerating the speed of social change. We can predict that technology, organisation, access to information and education, and the development of productive skills will play a crucial role in deciding the future course of development. We already have an excellent manpower base of trained scientific personnel, which is one of the largest in the world. This is a tribute to India's first Prime Minister Jawahar Lal Nehru. Our challenge is to harmonise these scientific capabilities with our massive labour force, to create expanded opportunities to enrich knowledge and skills of our workers. Eventually, the effort to upgrade skills through training and the use of new technology will ensure that our workforce remains on the cutting edge of the technology revolution. And in this context, nothing is more important then universalising access to elementary education. When I look at countries in our neighbourhood, for example, in South Korea , every child of secondary school age is in fact in school. And we, unfortunately in this country have the spectacle that we are not able to universalise access to elementary education. We have to make good this gap if we have to realise our development aspiration.

However, apart from training, we also need to review the impact of our economic policies, including labour laws, on the growth of employment in the aggregate. We have to ensure that the incentive system built into our economic policies encourages and does not discourage the growth of employment to the maximum extent possible. Our fiscal and monetary policies should promote the growth of labour intensive industries and processes as opposed to capital intensive and labour saving ones. There must also be an honest debate about the functioning of labour markets and its impact on the growth of employment in the organised sector of the economy. I recognize that this is a much-discussed topic, and it also gives rise to a good deal of controversy.

While recognising the need for increased flexibility in labour markets, one cannot glibly talk of an uncritical endorsement of the hire and fire approach, more so, since the institutions of social security, particularly unemployment insurance, are not well developed in our country. Even then, living as we are in a world characterised by considerable uncertainty and fluctuations in demand as well as fast changing technological conditions, there must be an honest, objective assessment of the employment impact of our economic policies including labour laws. Structural reforms in a democracy, to be durable, must involve consultation with all stakeholders, particularly the workers and trade unions. Our government is committed to reforms with a human face. The working classes of our country have my assurance that we shall never pursue a path, which affects adversely the interests of the workers and the toiling masses of our country.

I hope some of these issues will be discussed in the National Manufacturing Competitiveness Council and the Commission o the Informal Sector that we have constituted. I urge business and labour organisations to engage in a productive dialogue with Government on these issues of vital national importance to our survival and our flourishing as a modern competitive nation.

With these words, I once again congratulate the winners of the Shram Awards, as well as the management of their organisations, who have extended the necessary support to create an environment for excellence to flourish. Our country needs the twin commitment both to the pursuit of excellence and the pursuit of social equity for the task of nation building. I have no doubt that the award winners will motivate all of us to aim higher, we can not be satisfied with the status quo. We have miles to go, as Punditji used to say, before we sleep. Therefore we have to aim higher. So that we can collectively realize our dream of building a new India which I said free from fear of want and exploitation. That is my prayer and I feel confident that the talent that I have seen today in this hall that is forerunner of what India is going to be a technologically advanced nation a sophisticated nation committed to the advancement of human welfare committed to the causes of social equity, committed to the task of removal of mass poverty, ignorance and disease which still afflict millions and millions people in our country. "