A recent finding of a decline in the number of unemployed in Kerala seems to assert the growing power of the private sector to generate new job opportunities in the State.

K.G. Kumar

For very long, Kerala has been struggling with the problem of unemployment, which has been exacerbated by the tardy progress of the State’s tryst with industrialisation. The serious nature of joblessness in the State has been amply described in last year’s Economic Review, the annual snapshot of the State’s economy brought out by the Kerala State Planning Board.

It says: “If we can put it in this way, the problem of unemployment is the single largest problem of the economy today. Kerala’s unemployment problem is not only about the serious problem of educated unemployment but also a substantial portion of this problem is simple unemployment of unskilled workers. This is the highest in the country and on the rise, too.”

At the bottom

Kerala is the worst among all States and Union Territories in India (except Lakshadweep and Tripura), according to the National Sample Survey (NSS) 61st -round large sample survey conducted during 2004-05.

Notwithstanding the fact that large numbers of the State’s population have migrated to West Asia and elsewhere for jobs, the rate of unemployment in Kerala remains way above the all-India average, notes the Review.

As on 30th September 2006, there were close to 40 lakh registered job seekers in the Live Register of Employment Exchanges in Kerala. This constituted about 46 per cent of the State’s population in the age group of 19-29. Of the total number registered, 58 per cent are females. There are few illiterates among Kerala’s unemployed, while the largest number of job seekers boasted academic qualification up to the matriculation level.

Silver lining

But now, amidst these depressing clouds of statistics, there seems to be some glimmer of a silver lining. Or at least some scope for a partial sigh of relief.

A study by K.C. Zacharia and S. Irudaya Rajan, two economists at the Centre for Development Studies (CDS), Thiruvananthapuram, unemployment in Kerala has dropped from 19.1 per cent in 2003 to 9.4 per cent in 2007.

The number of unemployed persons went down by 124,000 in this period, while the number of employed persons in the State increased by 560,000.

More significantly, the growth in employment has occurred only in the private sector. The number of jobs in the private sector doubled in this period, and there was also a 24 per cent rise in the self-employed workers.

To understand the significance of this fact, here is what the Economic Review has to observe: “The worsening unemployment situation is obviously related to the inability of the economy of the State to generate any fresh employment during the last decade or so, particularly after the advent of liberalisation in the country. While this phenomenon of “jobless growth” is observable in all the States in the country, the situation Kerala appears to be particularly distressing in this regard. The growth rate in employment during the period 1993-94 to 1999-2000 in Kerala was a meagre 0.07 per cent per annum.”

Kerala’s organised public and private sector together employ 11.46 lakh persons, which constitute 4.3 per cent of the total employees in the organised sector in India. The total employment in Kerala’s organised sector, which had been increasing marginally since 1996, started declining from 2000 onwards.

Of the total of 6.10 lakh employed in the public sector as of December 2005, 0.77 lakh were Central Government employees, 2.79 lakh State Government employees, 2.29 lakh quasi-government employees and 0.25 lakh were local government employees.

So if Zacharia and Rajan are right about the growth in the number of those employed in the private sector, it means that some kind of fundamental shift seems to be happening in Kerala’s industrial composition. The economists also reported a modest but consistent acceleration in the remittances from abroad received by Kerala during the last four years.

The State received Rs 24,500 crore as external remittance in 2006-’07. This forms 20 per cent of Kerala’s Net State Domestic Product (NSDP). Remittances have not kept pace with the growth of NSDP – in 2003 remittances were 22 per cent of the GDP while it was about 25 cent earlier.

Zacharia and Rajan say that migration from Kerala appeared to be entering a mature phase. The proportion of Kerala households reporting a Non-Resident Keralite (NRK) among them has remained the same in 2007 as in 2003, which is 25.8 per cent. There is also a decline in the number of Keralites migrating to other States within the country in this period.

According to Zacharia and Rajan, the demographic transition, manifested in the decline of the proportion of the people in the age group 15-24, could be one of the reasons for the decline in the out-migration rate from the State.

Apparently, the peak of the El Dorado rush to the Gulf countries appears to be over. Also, the money that the NRKs are sending back home now appear to be going less into non-productive ventures like real estate and house construction. Remittances are now being invested in employment-generating projects.

Further, the growth in the information technology sector – with software parks coming up in the capital and Kochi – seems to have added to the potential avenues for employment for the State’s job seekers.

While it may still be too early to pronounce a paradigm shift in Kerala’s approach to employment generation, the growing power of the private sector seems to be entrenching itself in the State.

The writer can be contacted at kgkumar@gmail.com

(This article was published in the Business Line print edition dated October 8, 2007)
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