Ouckted by Sh. D. P. GOVERNMENT OF KERALA REPORT OF THE COMMITTEE ON UNEMPLOYMENT IN KERALA PART I STATE PLANNING BOARD KERALA TRIVANDRUM Government of Kerala 1971 PUXNTED BY THE S.G.P. AT THE GOVERNMENT PRESS, TRTV'ANDRUM, 1971 GOVERNMENT OF KERALA REPORT OF THE COMMITTEE ON UNEMPLOYMENT IN KERALA PART 1 SI’ATFJ PLANNING BOARD, KERALA TRIVANDRUM N IEPA D C n03834 Sulb. National Systems Unit, National Instirute of Educttion^ Pl^Df'!*^*? ;=»”cJ Aminisnation 1 7 -I ! Aui I Mar^N^wD«Ubi-1 1 0 (Mii DOC. N o.p.w r* CONTENTS Page Summary and Recommendations 1 - - 5 CHAPTER I Nature land Magnitude of Unemploy­ ment in Kerala 7 - -14 CIIAPTUIR 11 Broad Approach to the Problem 1 5 --IS CHAPTER III Employment in Agriculture 19 2G CHAPTER IV Employment in Fishing Industry 2 7 --32 I CHAPTER V Elmproyment in Industries 33--48 C H A in m VI Employment Opportuniti'es for Special Groups 49- 54 CHAPTER V ll Financing the Eniiiloyment Programme 5 5 - 5S APPENDIX 1 Ijist of Minor Irrigation works proposed 5 9 - -119 PREFACE The pressure of unemployment has been buildhig up over a long period; it has now reached explosive heights in Kerala. The problem needs to be tackled on a warfooting. A.s per G.O.(Rt) No. 255|70| Pig. dated 13-11-1970 a Committee consisting of Professors P. G. K. Panikar and T. N. Krishnan, University of Kerala, Prof. K. S . L. Panikkar, Chief Evaluation Officer, und Dr. P. K. Gopala- krirfhnan, Meniber-Secretary, State Planning Board was constituted »o undertake a study of the probh^m of unemiiloyment in all its aspects with a view to sugg'esting remedial measures capable of creating an immediate impact. After analysing the available data on unemployment, the Committee held discussions with officers of concerned Government Dei»ai tments such as Agricvdture, Irrigation and Industry ^and rejnesentatives of related promotional agencies. We take tiiis op[)ortunity to j)lace on record our deep sense of gratitude to all who gave us the benefit of their experience and expertise. An analysis of the miture and magnitude of unemployment in Kerala shows that the problem defies immediate solution and that it could be tackled only within the frame work of long term economic ilevelopment of the State. This calls for a more detailed study and thorough examination of policy prescriptions which will take consi- SerabLe time and effort. In view of the urgency of the pn»blem we l^resent in this Part of our Report proposals which can be imple- inented immediately; this will be followed by a final report in dae poui'se. 3JU0 SUMMARY AND RECOMMENDATIONS The problem of unemiiloyment in Kerala ia assuming serious proportions and it is receiving increasing attention from both the public and thie Government. On the basis of the findings of a sample survey,, open unemployment in 1905 was estimated at 5.47 lakhs, forming 9.1 per cent of tire labour force; in addition, 13.7*8 lakh persons were reported to be under employed. No comprehensive survey of has been eoMucted smce so lhat oa\y broad approximlations about the subsequent trends of unemployment could be derived. A rough estimate based on Employment Exchange data indicates that open unemployment has presumably risen to 9 lakhs by now, which would constitute 13 per cent of the labour rorce. Taking h\to account the projected laoour force and the likely increase in employment, the number of under-employed may. be estimated to have increased to 17.8 lakhs. Considering the sfeverity of unemployment and imder-employ- uient, the Committee has drawn up proposals for an Investment of Ra. Ififi-crores. Certainly, this represents an ambitioijw pro­ gramme, but the Committee feels that investment on this scale is the irreducible minimum necessary to make an impact on the worsening employment situation. Thougli the Conunittee has been constituted to i-ecomend measures which will make an immediate impact, after a careful analysis of the nature and magnitude of unemployment, it has cornfe to tlife conclusion that ad hoc measures and make-work projects |will !iot solve the problem. Thei’iefore, the Committee felt that oaly projects which will lead to capital formation, increase in producti­ vity and introduction of new technology, besides creation of employ- nuent, should be recommended. As far f{R employment is concerned, the agricuhtural sector in the State has reached the saturation point. Nwertheless, there Is seme scope for employing more labour in agriculture by wuy of expending the infrastructure, land reclamation, plant protection, agricultural research and extension. These programme incorporate the broad approach of the Committee, viz., reconciling the twin otajeetives oi creating employment and stepping up the rate of capital formation and economic development. While recognizing the importance of agricultural and allied activities in i^’oviding employment, the Committee strongly believes that the long-iun solution to the problem lies in industrialisation. 31110 This is brought into bold relief when we examine the past record of industrial development here. Local entrepreneurship has been shy or non-existe!it. Outside entrepreneurs have studiously avoid­ ed Kerala. Kerala’s share of Central projects has been only iiominal. As against thfese, the State Government’s inveatmer,t in the field of industry was only of marginal significance, since there was heavy and irresistible pressure from other sectors, e^e- cially education, public health and other social services, on the State’s limited resources. Given the above constrauits, the Com mittee is led to the inescapable conclusion that the State must devote a much larger- proportion of its resources to industries. Thus, unlike in the State’s five year plans, industry is accorded a high«r priority in the present proposals. Out of the total outlay of Rs. 186 crores proposed here, industries would account ter Rs. 81 crores . Further, out of Rs. 30 crores to be raised by th(' State Government from withhi the State, Rs. 18 crores are com mitted to industry. By the same token, the Committee felt thal the State Government must assume the pivotal role in sparking the process of industrialisation of this region. The report lias unequi vocally stai( d that the State Government should provide the entre­ preneurship. Owing to a constellation of economic, political, social and psychological circumstances, the functions of innovation, financing and managemet devolve on the shoulders of the State* Government. The road to industrialisation is strewn with seemingly insuperable diflSculties, but the inescapable role of thn Government here is that of path-breaker. The industrial structure of Kerala is dominated by traditionBl industries, most of which are on the decline. The Committee has therefore given in a high priority to their rehabilitation. However, a fresh beginning has to be made in the process of industrialisation by starting modern industries. The dearth of project reports on feasible industries is a major handicap standing in the way ol availing institutional finance now available in largfe amounts on liberal terms. Therefore, the Committee has selected for imme­ diate implementation a number of units in small, medium and large industry, for which project reports are readily available and recommended the initiation of immediate steps by the Government for the preparation of project reports. The broad approach to the question of industrialisation, larger allocation to industries and higher degree of State participation, does represent a significant depailure from the traditional approach in Kerala. The guidelines of policy in the limited context of em­ ployment can be dovetailed with the possible strategy for the fifth five year plan of the State. The Committee also felt the urgent need to give special tr-eat ment to the employment problems of certain groups and areas hi the State which are apt to be denied the fruits of over-all economic development. In view of their peculiar social and economic handi­ caps, the Committee has proposed certain measur-es for the benefit of special groups like Harijans, unemp2oj;ed eii^ ieers and techni­ cians jiii-llie, one hand and depret^SefT areas like Malabar, Kuttanad, nfcr, on the othe^r Another avenue of additional employment consists of moderniz­ ing the fishing industry. Kerala's unique endowment in respect of fisheries is widely acknowledged. But we have as yet touchec’. only the fringe of this immense potentiality, A more systematic and determined effort |n fishery development than hitherto attempt­ ed is called tor. Construction of fishing harbours, building up of storage and nrocessing facilities, deveU)ping a net work of transport and dlstiibutum chanm^ls and improving the living contMti<mR of the fisher-folk are contemplated here. The financial implications of the proposed outlay of Hs. 186 crores are also examined, especially its allocation among the State Government, the Central Government, financial institutions and the private sector. The basic philosophy underlying this report is that in accelerating development and generating greater employ­ ment opportunities, the people of K?rala must lift themselves up by Iheir own bootstraiMi, so to say. However, the aUocation pattern of the total outlay, viz., Rs. 30 crorfs to be provided by the State Government, Rs. 30 crores by the Central Govennnent, Rs. 102 croied by financial institutions and Rs. 24 crores by the private sector would give a difl’erent impression. The rationale of this pattern may be examined. In the first place, the financial resources of the Slate Government are extremely limited and sizeable revenue gaps have ehown up in recent budgets. The scope for increased taxation is limited. For, under the existing Constitution the StateF. are left with very few avenues of taxation, Kerala is one of the m ^ t heavily taxed States in the Iiidian Unions Nfitnrallj^r The St^e Government have to lean heavily on the Central Government for tackling this problem.