Topic 1 : On unemployment in Indian States
Context
A recent report released by the International Labour Organization (ILO) and the Institute for Human Development (IHD) revealed that two out of every three unemployed individuals was a young graduate, highlighting the need for urgent policy intervention.
An analysis of unemployment
- This analysis looks at unemployment in the major States of India — excluding the Union Territories —among individuals aged 15 and above as measured by the Usual Principal and Subsidiary Status (UPSS), utilising data from the Periodic Labour Force Survey (PLFS) of 2022-23.
- Goa’s unemployment rate —more than three times the national average (3.17%) — is the highest.
- Interestingly, 4 of the top 5 States — Goa, Kerala, Haryana and Punjab — are comparatively richer states.
- The rich States of western India — Maharashtra and Gujarat — experience unemployment rates far less than the national average.
- All northern States — Jammu and Kashmir, Punjab, Haryana, Uttarakhand and Himachal Pradesh — have unemployment rates higher than the national average, as do all southern States with the exception of Karnataka.
- Out of the 27 States considered, 12 States have unemployment rates less than the national average.
- Low rates in larger States — 3% in Maharashtra, 2.4% in Uttar Pradesh and 1.6% in Madhya Pradesh — bring down the national average.
- But this presents a conundrum: barring Maharashtra and Gujarat, much of the States with unemployment rates lower than the national average also have per capita incomes lesser than the national average.
The determinants of unemployment
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- Figure 2 depicts the relationship between unemployment rates and the share of the labour force in self-employment.
- The trend line drawn through the data is downward-sloping, indicating that there exists a negative relationship between the two; in States where a large proportion of the labour force is engaged in self-employment, the unemployment rate is low.
- Since a bulk of the self-employment in India is of the informal variety, States with a large proportion of informal work would find it easy to absorb a large number of job-seekers.
- Yet it is unclear whether this relationship is cause or effect.
- A large proportion of informal self-employment is accounted for by agriculture and the rural economy.
- Figure 3 outlines the relationship between the urban share of the labour force and the unemployment rate.
- There is a clear positive relation, indicating an increase in unemployment rates in highly urbanised States.
- This explains the high degree of unemployment in States like Goa and Kerala — both highly urbanised — and low unemployment in States like U.P., Jharkhand and Madhya Pradesh.
- Urbanised States have smaller agrarian and agrarian-dependent sectors and hence have a relatively smaller source of informal jobs available.
- While informal sectors do exist — and thrive — in urban settings, the scope for the absorption of job-seekers is limited as compared to rural agriculture, which often acts as a ‘reserve’ absorbing surplus labour.
On education and employment
- Much of the discussion in the wake of the release of the ILO-IHD report has centred on the link between education and unemployment.
- There is a clear positive relationship. Kerala, for instance, has a highly educated labour force — 30% of the labour force are graduates — and faces high unemployment.
- Gujarat and Maharashtra have a relatively lower share of graduates in their labour force — roughly 14% and 20% respectively — and hence have lower unemployment in spite of being richer and urbanised.
- There might be several reasons for this outcome. Perhaps graduates do not possess the requisite skills required for the growing modern sector. This necessitates a focus on teaching infrastructure and standards.
- Another possible explanation is linked to aspirations. Graduates seek high-wage jobs in line with their skills, and not informal jobs.
- These are not the only factors driving unemployment. State policy also plays a key role. But this analysis highlights the links between structural transformation and unemployment.
Way forward
Growing developing economies experience a reduction in the role of agriculture, and an increase in urbanisation and educational attainment. As India develops, these factors would add an upward pressure to the unemployment rate. It is imperative that policy concentrates on the question of employment generation to counter these tendencies.
Topic 2 : Katchatheevu demands thinking outside the box
Context
It would be unwise to attempt to create a Berlin Wall in the Palk Strait. India and Sri Lanka are like Siamese twins. What afflicts one will affect the other.
The issues
- There are two interrelated issues that should be kept in mind.
- First, the unilateral scrapping of a bilateral agreement will have profound consequences not only on India-Sri Lanka relations but also with several of India’s other neighbouring countries.
- Bilateral agreements have a sanctity of their own and cannot be scrapped based on the whims and fancies of every party in power.
- At the same time, the Centre should be urged to take immediate steps to ensure the livelihood of fishermen on both sides of the Palk Strait.
Introduction of trawling
- In the 1960s and 1970s, India faced a severe financial crisis. Indira Gandhi gave several incentives for ventures that earned foreign exchange.
- At that time prawns were a great delicacy in Japan and the European countries.
- As a result, bottom trawlers were introduced in the Palk Bay.
- Tamil fishermen from Sri Lanka were employed by trawler owners and with their guidance, Indian fishermen began venturing deep into Sri Lankan waters.
- India’s foreign exchange earnings went up, but most of it was due to prawns that were caught in Sri Lankan waters.
- The use of bottom trawlers did incalculable harm to the sea bed. The trawlers swept away everything from the sea bed, resulting in no fish being available on the Indian side of the Palk Bay.
- Indian fishermen have to enter Sri Lankan waters to fish. And Sri Lankan fishermen began to complain that Indian trawlers would also destroy their sea bed. What is more, bottom trawlers are banned in Sri Lanka.
Suggestions
- Two interrelated points must be highlighted. Even if India were to get back the island of Katchatheevu, the problems faced by Indian fishermen will continue.
- And, if the Sri Lankan government were to file a case in the International Court of Justice — as the Philippines did against China a few years ago — India’s image in the comity of nations would take a nose dive.
- Every challenge provides an opportunity. The problems in the Palk Bay can be solved only if we start thinking outside the box.
- The Palk Bay is not a barrier but a bridge between India and Sri Lanka.
- We must convert the Palk Bay from being a contested territory to one that is a common heritage.
- The first essential prerequisite is for the Government of India to ban all fishing equipment which are banned in Sri Lanka.
- And then, we should work to ensure that fishermen can equitably enjoy the rich marine wealth.
- There can be a formula: Sri Lankan fishermen can fish in the Palk Bay for three days, while Indian fishermen can fish on the other three days. One day can be a holiday.
- Let us encourage the Tamil fishermen of both countries to meet, form cooperative societies, and venture into deep-sea fishing. The trawlers can be modified into vessels that can assist the mother ship.
Conclusion
Such joint ventures will also help repair the damage Indian fishermen have caused to the livelihood of their Tamil counterparts. It is only bold initiatives such as these that can lead to a win-win situation.