COMBATING GLOBAL FINANCIAL MELTDOWN NCEUS for Rs 58,000 cr bailout for the poor http://www.financialexpress. com/news/nceus-for-rs-58-000- cr-bailout-for-the-poor/ 400134/0 ASHOK B SHARMA Posted: 2008-12-18 21:31:43+05:30 IST Updated: Dec 18, 2008 at 2131 hrs IST New Delhi, Dec 18 : The National Commission for Enterprises in the Unorganised Sector (NCEUS), with a view to insulate the country's poor from the adverse impact of the global financial crisis, has suggested a Rs 58,000 crore (Rs 580,000 million) stimulus package for the informal economy. The package is only for short and medium-term measures designed to create over 57 million additional jobs in five years, it said. The panel headed by Arjun Sengupta also suggested 10 specific areas for implementation of the package. "The NCEUS members, alongwith its chairman met the Prime Minister, Manmohan Singh and urged him to immediately implement the proposals in the remaining three month's of the current fiscal and in the 12 months of the coming fiscal year," said the panel's member-secretary, VK Malhotra. He said that Rs 58,000 crore (Rs 580,000 million) would not be burden on the exchequer as it was less than 2% of the country's GDP. "The impact of the global financial crisis is already being felt in the country and the poor are worst affected. In the first half of the year the unorganised workers were pressed hard due to high commodity prices and after the global financial crisis they are hit by loss of job," he said According to NCEUS about 77% of the workers in the unorganized sector live on less than Rs 20 a day. Out of the Rs 58,000 crore (Rs 580,000 million) package the panel suggested Rs 5,000 crore (Rs 50,000 million) special programme for small and marginal farmers, setting up of a Rs 500 crore (Rs 5,000 million) National Fund for Unorganised Sector, Rs 2,000 crore (Rs 20,000 million) programme for employment assurance through skilled development, Rs 14,500 crore (Rs 145,000 million) for a new scheme for generating employment for the urban poor, Rs 30,000 crore (Rs 300,000 million) for a comprehensive scheme for national social security and additional Rs 5,000 crore (Rs 50,000 million) for the government's ongoing self-employment schemes. The panel called for creating new jobs through government-funded low-cost housing for urban slum dwellers, expansion of minimum social security programme for informal workers, increase in investment in rural infrastructure and basic urban facilities, stepping up of land and water management programmes, lifting the ceiling on mandated 100-day employment per household under the National Rural Employment Guarantee Scheme, enhanced investment in human resources development. According to NCEUS, informal sector consists of all unincorporated private enterprises owned by individuals or households engaged in the sale and production of goods and services operated on a proprietary or partnership basis and with less than 10 workers in total. There are an estimated 58 million enterprises in the non-agriculture unorganized sector employing less than 10 workers. Of these 94% have an investment in plant and machinery up to Rs 5 lakh (Rs 500,000) and another 4% have investment ranging between Rs 5 lakh to Rs 25 lakh (Rs 2,500,000). These enterprises contribute 31% to the GDP. The panel called for increasing credit flow to small enterprises having investment below Rs 5 lakh from 2% to 5% and that to those having investment below Rs 25 lakh from 5% to 8%. Informal workers consists of those working in the informal sector or households, excluding regular workers with social security benefits provided by the employers and the workers in the formal sector without any employment and social security benefits provided by the employers. According to 2005 data 47% of the workforce in the formal sector were having informal jobs without any social security. Out of the total workforce of 475 million in 2004-05, 420 million worked in the informal economy – 6% in the formal sector and 86% in the informal sector and thus informal workforce total to 92%. About 34% of the informal sector workers in 2005 were females and about 48% of the self-employed women were unpaid family workers as against 17% male. A marginal farmer is defined as one having land holding below 2.5 acre land and a small farmer is defined as one having land holding up to 5 acre. Scheduled castes and tribes constitute a large section of the workforce in the informal sector. About 64% of the workforce is in agriculture. Among agriculture workers, 74.6 million (29.5%) are marginal farmers and 39.9 million (15.8%) are small farmers. Small and marginal farmers contribute 60% of the output. The NCEUS has said that the growth in the GDP need not necessarily lead to employment generation. Specific employment generation strategies need to be incorporated in the development planning process. The conventional approach followed by the Planning Commission generally does not make any distinction between informal and formal sectors. It also does not consciously factor in the planning process the educational and social profiles of the persons seeking employment, their specific work capabilities and state wise variations in the size and composition of labour force and existing employment opportunities. The NCEUS had earlier submitted seven reports since 2006. Its proposals for social security made in 2006 has recently been passed by both the houses of the Parliament. Its proposal for setting up of a national fund for the unorganized sector is also recommended by the inter-ministerial group. --------------------------------- |
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