Creating Twenty Five Lakh Jobs in India
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Creating Twenty Five Lakh Jobs in India
Here, we present a plan or scheme to create twenty five lakh permanent jobs in India. Let us name this scheme as “TFLJ Scheme” here TFLJ stands for Twenty Five Lakh Jobs. This plan consists of the following basic steps:
1. All government employees and pensioners (state governments as well as central government) would be paid 10 percent part of their salary in terms of goods.
2. All private sector employees working in organizations having the turnover of One Thousand Crore Rupees or more would be paid 10 pecent part of their salary in terms of goods.
3. These goods would be supplied by registered retail shops run or authorised by KVIC, i.e., Khadi and Village Industries Commission (www.kvic.org.in/ or Handloom Commission (http://handlooms.nic.in or by OSDs of central and state governments. Indian craftsmen in rural area can produce good number of useful items and many of them are not covered by KVIC or Handloom commission. It is essential that all these items need to be covered under this scheme so that no craftsman should be left out of this scheme.
4. Government of India would pass the necessary laws so that actions stated in steps 1, 2, and 3 may be carried out without any hindrance.
5. The employees and pensioners drawing the salary of Ten Thousand Rupees or less per month would be exempted from this scheme.
6. The total annual salary of all the employees and pensioners -– government as well as private – to be covered under this scheme is approximately Ten Lakh Crore Rupees. Actually, it is certainly more than Ten Lakh Crore Rupees. Alone, salaries of governemnt empolyees are about 10.18 Lakh Crore Rupees. See http://www.dnaindia.com/india/report-8-of-gdp-is-spent-on-govt-salaries-2570599 for details. But to be on safer side, we are using only modest figures.
7. Ten percent of Ten Lakh Crore Rupees is One Lakh Crore Rupees. Thus this scheme will create an additional market of One Lakh Crore Rupees for goods produced by rural and cottage industries under the guidance of KVIC.
8. Goods produced in rural and cottage industries worth Four Lakh Rupees create one full time job. This, however, varies from goods to goods but we are considering an average case. The precise details can be worked out later.
9. Thus goods worth One Lakh Crore Rupees would create the jobs as calculated below:
number of jobs = one lakh crore / four lakh = 25 lakh jobs
Thus this scheme creates about 25 lakhs job. This is, however, easier said than done. In order to create the goods worth One Lakh Crore Rupees we have to create manufacturing facility and trained workforce. Fortunately, in case of rural and cottage industries the investment is not very large and government together with public sector and private sector banks can arrange for the money needed to create the additional manufacturing facility. As far as rural and cottage industries are concerned, trained work force is available through out the country. This trained work force can be used to create an additional trained work force.
Economists, business experts and managing experts can put their opinions on the feasibility of this scheme.
How to Begin?
The very first question related to this scheme is how to begin? Well, we can begin using these three guidelines:
Guideline 1: Appeal to government employees and private sector employees to voluntarily surrender their at least 1% of salary and upto 10% of salary in return of goods. Many will come ahead, as we have witnessed it in surrender of Gas Subsidy where thousands of registered gas users have voluntarily surrendered their subsidy in the interest of nation.
Guideline 2: Start from top and them move to bottom. To begin with, cover only top segment of government and then move downward in a phased manner. In a first phase, we should cover only President of India, Prime Minister of India, Members of Cabinet, All Members of Parliament, Judges of Supreme Court, Senior IAS officers, Secretaries, Presidents and CEOs of mega sized companies. In a second phase we should include only senior Class 1 officers (and officers superior to them) and their counter parts in private companies. In such a phased manner we can move to the bottom of government bureaucracy and private companies workforce.
Guideline 3: Start with 1% and then move to 10% in a phased manner. To begin with, only 1% part of the salary would be paid in terms of goods. In second phase, we insists on only 2% part of the salary to be paid in terms of good. ..... Finally, in tenth phase, we ensure that 10% part of the salary to be paid in terms of good. In such a phased manner, we can move from 1% to 10% part of salary to be paid in terms of good.
Which Items to be Included in this Scheme?
The purpose of this scheme is to create jobs and therefore, it is advisable to include as many items as possible which are made without using machines. We suggest the following items:
1. Handloom cloth. Cloth woven on handloom by a traditional weaver (जुलाहा). These may include, plain cloth, saree, dhoti, curtains, bedsheets, chadars, towels, etc.
2. Pots. Pots made by traditional potter (कुम्हार).
3. Footwears. Footwears made by traditional cobbler (मोची).
4. Tools of iron: Tools and other items of iron made by traditional ironsmith (लुहार).
5. Items of copper: Kitchen utensils and other items made by traditional coppersmith (ठठेरा).
6. Furniture: Furniture made by traditional carpenter (बढई).
7. Garments: Garments made by traditional tailor (दर्जी).
8. Bamboo items: Items made from bamboo such as mats, baskets, ladder, etc. by traditional Buruds.
9. Handbags and purses: Handbags and purses made from leather and rexin with minimal use of machines.
10. Soft toys: Soft toys made with minimal use of machines.
11. Stationary items: Stationary items – such as paper envelopes, office gum, candles, etc, -- made with minimal use of machines.
12. More items may be included in this scheme. However, it must be ensure that the items are made (manufactured) without using machines or with the minimal use of machines. If machine made items are included in this scheme (or enter this scheme by backdoor) then very purpose of this scheme will be defeated.
Frequently Asked Questions:
Question 1: There are already countless schemes floated by Central Government of India and good number of them are failed. Is there necessity of one more scheme?
Answer: Because this scheme is directly creating the employment opportunities we need this scheme and Central Government should implement it as early as possible.
Question 2: What is overall impact of this scheme on Indian economy?
Answer: This scheme, when fully implemented, will enforce the cash inflow of one lakh crore rupees (one trillion rupees) every year to rural india. This cash in rural india will create demand for many products which are manufactured in urban area. For example, a weaver or a carpenter working in a village, after making some money through this scheme, may wish to purchase a mobile or a television or a bicycle or a motor cycle and all these items are manufactured in urban area. Thus most of the cash (one lakh crore rupees) will return back to urban area as most of the manufacturing industry is in urban area. Consequently there will be growth in manufacturing sector and more jobs will be created in manufacturing sector and eventually, more jobs will be created in urban India. Thus whole Indian economy will be accelerated. The beneficiary of this scheme is not only rural India but whole India. Ultimately, this scheme will have a significant positive impact on the growth rate of India.
Question 3: According to “free market economy” concept, buyers should not be forced to buy a particular type of products. Doesn’t your scheme goes against the sacred notion of “free market economy”?
Answer: Free market economy (also called laissez-faire economy) is an outdated concept. Free market concept ruled the economies of the world from 1750s to 1930s. Laissez faire is the french term. Its literal meaning is “to leave alone” or “to allow to do.” It believes in the principle that economies and businesses function best when there is no interference by the government. In other words, free market economy believes in the principle that free market is a self controlled machine that automatically responds to any external threats that have potential to destabilize the market. For example, suppose, following some reason, there is shortage of breads in the market. Then shortage of breads results in hike in prices of breads and manufacturing the breads becomes more profitable than before. For the want of more profit, manufacturers increase the production of breads, this increased production kills the shortage of breads, and this is how free market deals with the shortage of any commodity. Ditto same argument can be made when, instead of shortage, there is surplus supply of breads. Now this surplus supply will result in drop of prices of breads, bread manufacturing becomes less profitable business, manufacturers decrease the production of breads, and this decreased production kills the abundance (surplus) of breads in the market.
However, great depression of 1930s showed the hollowness of the free market economy concept. Since 1930s, (except communist countries Russia and China), economies of the world have been following the Keynsian model of Economics. Economist John Maynard Keynes published a classic book “A Treatise on Money” in 1930 which can be considered as a basic book on Keynsian economics. The corner stone of Keynsian economy is that government intervention is necessary in economy particulary during the crisis. The behaviour of free markets is not always in the benefit of society.
The thirty second President of USA, Franklin D. Roosevelt or FDR (who was President of USA from 1933 to his death in 1945) was admirer of Keynes and J. S. Mill. Having a strong faith in the Keynsian model of economy he (i.e., FDR) proposed the New Deal. This highly successful New Deal pulled out not only USA, but the whole world, out of the Great Depression of 1930s. The basic idea was to stimulate the economy by creating jobs. To create jobs, he made few organizations. The organization "Civilian Conservation Corps" took men off the streets and paid them to plant forests and drain swamps. The organization "Public Works Administration" employed men to build highways and public buildings. Creating jobs was important because it put money in the hands of the consumer, particularly, needy consumer. This directly affected the supply and demand. The more money they had the more they could spend. This started a chain reaction and brought the economy of USA back to the normal position before depression.
Let us hope, TFLJ Scheme would be also a New Deal for Indian economy that will attack unemployment in India at its root. An important point to note is that in order to augment the demand there must be money in the hands of needy consumers. In India Central Government has showered the govenment employees with money in Sixth and Sevent Pay commission but this money has failed to augment the demand in the consumer goods sector because these government employees (except those which are at the bottom-most rung) are not the needy consumers. They were already earning enough money to purchase everything of consumer goods they needed. Now with bloated salaries they are purchasing luxury cars, gold, flats, plots, etc. The large population of cars has resulted in more pollution and more petroleum consumption. More petroleum consumption has resulted in worsening the BOP (Balance of Payment) situation. Purchasing of gold simply locks the money in gold. The Indian people’s love for gold is the subject of a 1000-page treatise. V P Nandakumar, Executive Chairman of Manappuram Finance, India's first listed gold load company, said somewhere, "India has about 22,000 tonnes of private gold held by individuals and temples. Much of this is locked up in safes and vaults as a dead investment. If we can put the vast reserves of gold to use, it would boost the economy." Notice that price of 22,000 tonnes of gold is approximately whopping Seventy Lakh Crore Rupees. Purchasing of multiple flats and multiple plots by rich government employees has resulted in sky rocketing of prices of plots and flats and making them beyound the reach of a common man in India.
On the contrary, more money in the hands of craftsmen in rural India generates more demand in the consumer goods sector that is a good tonic for Indian economy. This tonic will accelerate the Indian economy and will generate the jobs throughout India. While offering Sixth and Seventh Pay Commissions to government employees, if Prime Ministers of India were expecting rise in demand in consumer goods sector then I must say unhappily that they had not done their homework properly. Because, in past, a similar experience in USA already confirmed that more money in the hands of rich simply doesn’t generate demand in the consumer goods sector. In 1981, Ronald Reagon, the then President of USA, significantly reduced the maximum tax rate, which affected the highest income earners (rich people in USA) and lowered the top marginal tax rate from 70% to 50%; again in 1986, he further reduced the tax rate to 28%. He did it hoping that the more money in the hands of people would generate more demand in consumer goods sector but these rich people simply hoarded that money in their lockers or in banks; they simply refused to go to markets for buying.
I think this, rather long, answer is sufficient to pacify the annoyed lovers of the free market economy. Before finishing I would like to make a remark. As told above, Keynes was the first to predict that the behaviour of free markets is not always in the benefit of society. However, it is interesting to note that much before Keynes, Saint and Poet Kabir (1440-1518) wrote a doha, given below, that points out the limitations of free market economy;
Goras bikai gali gali, Madira baith bikay. गोरस बिकै गली गली, मदिरा बैठ बिकाय.
Meaning of this doha is as follows: “If you want to sale milk (i.e., goras) then you shall have to sale it by taking it to the doors of the customers. On the contrary, if you want to sale the liquor (i.e., madira) then just sit at a suitable place and customers would make a beeline before you to purchase the liquor.” Actually, it is in the benefit of society to drink milk but society preferes liquor to milk. It is therefore duty of govenment to intervene in the market to encourage the people to purchase the milk and discourage the people from purchasing the liquor (by putting a tax on it).
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