WHAT WERE THE ASSUMPTIONS

BEHIND EMBRACING REFORMS?

LIBERALISATION, PRIVATISATION AND GLOBALISATION

(LPG) AND SUBSEQUENT REFORM PROCESSES EMBEDDING
ELEMENTS OF THE SAME WERE EXPECTED TOLEAD TO:

• ENHANCEMENT OF COMPETITIVENESS OF INDIAN INDUSTRY

• GROWTH IN FOREIGN DIRECT INVESTMENT (FDI) IN LINE
WITH OUR DEVELOPMENTAL CONCERNS

• ACTUALISATION OF PRODUCTION PROCESSES THAT WOULD

TRIGGER A BOOM IN EXPORTS

• A HIGHER SAVINGS AND INVESTMENT RATE

• SUBSTANTIAL INCREASE IN THE RATE OF GROWTH OF OUTPUT
AND EMPLOYMENT

• IMPROVEMENT IN THE QUALITY OF LIFE INCLUDING THAT OF

THE POOREST THROUGH EXPANSION OF GROSS DOMESTIC
PRODUCT (GDP)
• IN ALL LPG WAS EXPECTED TO STRENGTHEN ‘ECONOMIC’

FUNDAMENTALS (E.G. FISCAL DEFICIT, ETC.), THEREBY REDUCE

POVERTY AND HELP ‘INDIA’ WITHSTAND COMPETITIVE
PRESSURES IN A GLOBALISING WORLD WHEREIN STATE WOULD
ONLY ACT AS A ‘FACILITATOR’

WHAT ARE THE MAJOR FLAWS WITH

THESE ASSUMPTIONS?

Focus on the Global South – India Programme 1

• ASSUMPTIONS OBSSESSED WITH ‘ECONOMIC’ FUNDAMENTALS
RATHER THAN UNDERSTANDING ‘POLITICAL ECONOMY’
FUNDAMENTALS

• ASSUMPTIONS DID NOT REALISE THE IMPORTANCE FOR STATE

TO NOT BE A MERE ‘FACILITATOR’ DURING
OPERATIONALISATION OF LPG PROCESSES

• ASSUMPTIONS TOOK FOR GRANTED THAT EXPORT INTENSIVE

COMPETITIVE PRODUCTION IS THE BEST WAY FORWARD AND DID
NOT PAY ATTENTION TO HOW SUCH A STRATEGY WOULD IMPACT
SSIS, THE LARGEST INDUSTRIAL SOURCE OF EMPLOYMENT
• ASSUMPTIONS HAVE NOT BEEN BASED BY GIVING DUE THOUGHT
TO DEVELOPMENTAL IMPACTS OF STRATEGIES THAT WOULD BE
ADOPTED IN ORDER TO SUSTAIN COMPETITIVE GLOBALISATION
AT THE END OF THE DECADE, E.G. LAYOFFS, MERGERS ETC.

• ASSUMPTIONS HAVE NOT PAID ATTENTION TO HOW EXCESSIVE

THRUST ON REDUCTION OF FISCAL DEFICIT HAS ITS
DEVELOPMENTAL IMPACTS E.G. REDUCTION IN DEVELOPMENTAL
BUDGETS, EMPLOYEMENT, ETC.

• HENCE NO ATTENTION PAID TO HOW THIS MODEL OF GROWTH

WOULD IMPACT WELFARE OF MARGINALISED SECTIONS

• NO ATTENTION TO CENTRE-STATE RELATIONS

MAJOR THRUST AREAS OF THE
REFORM BUDGETS SINCE 1991

• STRUCTURAL ADJUSTMENT PROGRAMME AND ADJUSTMENT

PROGRAMME– WASHINGTON CONSENSUS PRESCRIPTION

Focus on the Global South – India Programme 2

• BROAD PHILOSOPHY – REDUCTION IN FISCAL DEFICIT AND
REDUCING THE RISK OF BALANCE OF PAYMENTS PROBLEMS BY
FOCUSING ON EXPORT INTENSIVE PRODUCTION AND
COMPETITIVENESS WOULD LEAD TO POVERTY REDUCTION

• PROCESSES ADOPTED TO ACHIEVE THE TARGETS VIS-À-VIS

ABOVE MENTIONED VARIABLES: SUPPORTING LPG AND
INSTITUTIONALISATION OF THE SAME AT NATIONAL AND
INTERNATIONAL PLATFORMS

• ALL THE THREE COMPONENTS INTERDEPENDENT AS WELL AS

MUTUALLY REINFORCING

• MAIN ELEMENTS OF LIBERALISATION – DEVALUATION, TARIFF

REDUCTION, CREATING ENABLING CLIMATE FOR SMOOTH ENTRY
OF FDI AND INDUSTRIAL DELICENSING

• MAIN ELEMENTS OF PRIVATISATION – ENCOURAGING PRIVATE

SECTOR PARTICIPATION IN DELICENSED SECTORS AND IN
GOVERNMENT ENTITIES THROUGH DISINVESTMENT ROUTE

• MAIN ELEMENTS OF GLOBALISATION – REDUCING RESTRICTIONS

ON EXPORTS, IMPORTS AND INVESTMENT INSTRUMENTS OF ALL
KINDS

WHAT HAVE WE LANDED WITH BY

FOLLOWING PRESCRIPTIONS BASED
ON WRONG ASSUMPTIONS

• GDP GROWTH HAS IMPROVED MARGINALLY FROM AN AVERAGE

OF 6% IN THE SECOND HALF OF EIGHTIES TO 6.5% DURING
THE SECOND HALF OF NINETIES

• CONFUSING SIGNALS IN THE AREA OF POVERTY REDUCTION

Focus on the Global South – India Programme 3

• CONTRIBUTION OF AGRICULTURE TO GDP HAS REDUCED TO
25% BUT EVEN BY THE END OF THE NINETIES IT EMPLOYS
AROUND 58% OF THE POPULATION, WHICH REFLECTS UPON THE
INEQUITUOUS DISTRIBUTION OF NATIONAL INCOME

• COMFORTABLE BALANCE OF PAYMENTS POSITION

• SHORT-TERM DEBT TO GDP RATIO HAS COME DOWN
SUBSTANTIALLY

• NO SIGNIFICANT INCREASE IN INVESTMENT RATE AS WELL AS

THE SAVINGS RATE OR THE EFFICIENCY WITH WHICH CAPITAL IS
USED

• POLITICISATION OF INFRASTRUCTURE (PHYSICAL AND SOCIAL)

DEVELOPMENT HAS LED TO ‘POLICY-CONFUSION’,
DEPRIORITISATION AND HAS EVEN COMPELLED PEOPLE TO BUY
INFRASTRUCTURE SERVICES AT ABSURD PRICES, E.G. POWER

• POLITICISATION OF SUBSIDY REDUCTION

• STATE WITHDRAWAL UNDER THE GARB OF FISCAL BELT
TIGHTENING HAS RESULTED IN EXPOSING UNSKILLED AND
CAPITALESS INDIVIDUALS TO RISK WITHOUT ANY SAFETY NETS

• LOW REVENUE GENERATION COUPLED WITH HIGH REVENUE

EXPENSES AND INTEREST PAYMENT ON BURGEONING DEBTS HAVE
CALLED FOR CUTS IN THE CAPITAL EXPENDITURE

• GROWTH IN THE SERVICES SECTORS HAS IMPROVED, WITH

MANUFACTURING SECTOR PERFORMING NO BETTER AND
AGRICULTURE DOING WORSE

• REAL INVESTMENT IN INDUSTRY THAT HAD RISEN FAST UNTIL

1995-96 HAS SINCE THEN PETERED OUT
• PUBLIC INVESTMENT IN AGRICULTURE REDUCED SUBSTANTIALLY

Focus on the Global South – India Programme 4

• TWO MAJOR STOCK MARKET SCAMS RESULTING IN EROSION OF
WEALTH AND INVESTMENTS

• A PROGRAMME OF PUBLIC SECTOR DISINVESTMENT HAS BEEN

ADOPTED THAT ONLY LOOKS TOWARDS GARNERING RESOURCES
TO BRIDGE GAPS IN THE FISCAL DEFICIT TO GDP RATIO AND
THEREFORE RESULTS IN UNDERVALUATION OF ASSETS

• ROBBING THE CAPACITY OF THE INFORMAL SECTOR TO ACT AS

A CUSHION FOR ABSORBING UNEMPLOYED AND UNDEREMPLOYED
INDIVIDUALS, THANKS TO GROWING INFLUX OF CHEAP IMPORTS
AND PRESSURES TO BE COMPETITIVE

• ACCORDING TO A MEMBER OF A BJP THINKTANK, “SEVEN

LAKH SMALL UNITS HAVE SHUT, 7000 LARGE AND SMALL SCALE
INDUSTRIAL UNITS HAVE CLOSED AND AROUND 10 MILLION
PEOPLE HAVE LOST JOBS ONLY IN THE LAST FIVE YEARS”,
THANKS TO THE VARIOUS COMPONENTS OF TRADE AND
INVESTMENT LIBERALISATION

• NINETIES HAVE EXPERIENCED GROWING STRAIN BETWEEN

CENTRE AND THE STATES ON THE SHARING OF FINANCES FROM
THE CENTRAL KITTY AND OTHERWISE

• INDEBTEDNESS OF STATES IS ON THE RISE

• DISPARATE GROWTH ACROSS REGIONS AND SECTORS,
PARTICULARLY BETWEEN AGRICULTURE AND NON-AGRICULTURE

• AMONG THE STATES ONLY GUJARAT, KARNATAKA, KERALA,

MAHARASHTRA, TAMIL NADU AND WEST BENGAL RECORDED
HIGHER GROWTH OF PER CAPITA STATE DOMESTIC PRODUCT
THAN THE NATIONAL AVERAGE DURING NINETIES

• REGIONAL INCOME GAPS HAVE WIDENED – THE RATION OF PER

CAPITA INCOME IN MAHARASHTRA, THE RICHEST STATE, TO

Focus on the Global South – India Programme 5

 THAT OFBIHAR, THE POOREST, WHICH HAD FLUCTUATED
BETWEEN 2 AND 2.5 IN THE EIGHTIES, SHOT UP IN THE NINETIES
TO REACH 3.8 BY THE END OF THE DECADE

• NINETIES HAVE SEEN A NEGLIGIBLE OR A NEGATIVE GROWTH IN

PER CAPITA AGRICULTURAL PRODUCTION IN ANDHRA PRADESH,
ASSAM, BIHAR, GUJARAT, HARYANA, JAMMU & KASHMIR,
MADHYA PRADESH, ORISSA AND UTTAR PRADESH WHERE
60% OF THE PEOPLE LIVE
• RURAL NON-AGRICULTURAL EMPLOYMENT HAS DECLINED

• FEMALE ILLITERACY IS STILL AN ABYSMAL 56% AND AVERAGE

LIFE EXPECTANCY HAS IMPROVED SLIGHTLY TO 63 YEARS

• ‘SOCIAL RENEWAL’ COULD NOT BECOME TH CENTRE STAGE OF

INDIAN POLICY MAKING DURING THE NINETIES
• INDEBTEDNESS AT AN INDIVIDUAL LEVEL AMONGST
MARGINALISED SOCIETIES (BOTH AGRARIAN AND INDUSTRIAL) IS
ASSUMING NEW DIMENSIONS AND NEW PROPORTIONS

Focus on the Global South – India Programme 6

 EXAMPLE OF HOW SOCIAL SECTORS
SUFFER…

CENTRAL PLAN OUTLAY BY HEADS OF

DEVELOPMENT

(RS. CRORE)
2000-01 2000-01
SOCIAL SERVICES
(B.E.) (R.E.)
GENERAL EDUCATION 4949.20 4433.06

TECHNICAL EDUCATION 490.00 496.18

MEDICAL & PUBLIC HEALTH 1399.00 1276.85

FAMILY WELFARE 3520.00 3200.00

HOUSING 3968.90 3869.73

WELFARE OF SC/ST AND OTHER
1232.78 997.74
BACKWARD CLASSES
LABOUR AND EMPLOYMENT 121.79 96.19

SOCIAL SECURITY AND WELFARE 2329.97 2231.85

NUTRITION 2.90 2.90

Focus on the Global South – India Programme 7

OTHER SOCIAL SERVICES 1.20 1.20
NOT EVERYBODY CAN LOSE …
SOMEBODY SHOULD HAVE BENEFITED

• LOWER INCOME TAX RATES COUPLED WITH OPENING UP OF

DOMESTIC MARKETS FOR FOREIGN GOODS HAS PROVIDED THE
UPPER MIDDLE/MIDDLE CLASS AND RICH MASSES WITH A
GREATER CHOICE TO SPEND THEIR DISPOSABLE INCOME

• FIFTH PAY COMMISSION ARREARS AND SALARY PACKAGES

HAVE ALSO ADDED A WHOPPING RS. 10,000 CRORES IN THE
HANDS OF THE PEOPLE WHO ENJOYED THE PACKAGE

• THIS HUGE SUM ALSO ADDED SUBSTANTIALLY TO THE ‘VALUE

ADDED’ IN THE SERVICE SECTOR THEREBY INCREASING ITS
GROWTH RATE SINCE 1996.

• INTERNATIONAL BOOM IN THE IT AND THE FINANCIAL SECTORS

ALLOWED HIGHER END SKILLED LABOUR TO ENJOY HEFTY
SALARIES AND ALSO THE WEALTH EFFECT DUE TO STOCK OPTION
SCHEMES ETC.

• OVERALL ONE FINDS THAT THE UPPER MIDDLE/ MIDDLE CLASS,

CAPITAL-RICH AND HIGHER END SKILLED LABOUR HAVE BEEN
ABLE TO GARNER A MORE THAN SIZEABLE SHARE OF INCOME
THAT HAS BEEN GENERATED FROM LIBERALISING THE ECONOMY

• LPG PROVIDED POLITICAL PARTIES AND ITS REPRESENTATIVES,

BUREAUCRATS ET AL AN AVENUE TO EXERT THEIR POWER AND
EXTRACT ‘FEES’

Focus on the Global South – India Programme 8

 FIGURES SAY IT ALL…

AVERAGE ANNUAL GROWTH

RATES (%)
SECTORS/GDP
1981-82 1992-93 1992-93 1997-98
TO TO TO TO

1990-91 2000-01 1996-97 2000-01

AGRICULTURE 3.6 3.3 4.7 1.6

INDUSTRY 7.1 6.5 7.6 5.2

SERVICES 6.7 8.2 7.6 9.0

GDP 5.6 6.4 6.7 6.0

Focus on the Global South – India Programme 9

 SPECIAL FOCUS ON EMPLOYMENT-
WHAT DID THE MANIFESTOES
PROMISE ON EMPLOYMENT

BJP MANIFESTOS
• CREATION OF 10 CRORE JOBS IN 10 YEARS
• EMPHASIS ON RURAL UNITS, HOUSING, SSI UNITS,
INFRASTRUCTURE, WOMEN’S EMPOWERMENT AND PANCHAYAT
INSTITUTIONS

• REDESIGNING OF JAWAHAR ROJGAR YOJANA FOR BETTER

TARGETTING

CONGRESS MANIFESTOS
• CREATION OF ONE CRORE JOBS PER YEAR
• REVIEW OF LABOUR LAWS AND PRODUCTIVITY
• REVAMPING OF JAWAHAR ROJGAR YOJANA

UNITED FRONT MANIFESTOS

• IMPLEMENTATION OF RIGHT TO EMPLOYMENT
• STRENGTHENING LEGISLATION IN THE FAVOUR OF LABOUR IN
UNORGANISED SECTOR

• IMPLEMENTATION OF FOOD FOR WORK PROGRAMMES

Focus on the Global South – India Programme 10

 THE CURRENT EMPLOYMENT
SITUATION

• INDIA’S LABOUR FORCE IS GROWING AT THE RATE OF 2.5%

ANNUALLY, BUT EMPLOYMENT IS GROWING AT ONLY 2.3%

• THUS THE COUNTRY IS FACED WITH THE CHALLENGE OF NOT

ONLY NEW ENTRANTS (ESTIMATED AT 7 MILLION PER YEAR) BUT
ALSO CLEARING THE BACKLOG

• 60% OF INDIA’S WORKFORCE IS SELF-EMPLOYED, MANY OF

WHOM REMAIN VERY POOR

• NEARLY 30% ARE CASUAL WORKERS (I.E. THEY WORK ONLY

WHEN THEY ARE ABLE TO GET JOBS AND REMAIN UNPAID FOR
THE REST OF THE DAYS)

• ONLY 10% ARE REGULAR EMPLOYEES OF WHICH TWO FIFTHS

ARE EMPLOYED BY THE PUBLIC SECTOR

• MORE THAN 90% OF THE LABOUR FORCE IS EMPLOYED IN THE

‘UNORGANISED SECTOR’, I.E. SECTORS WHICH DO NOT PROVIDE
SOCIAL SECURITY AND OTHER BENEFITS OF EMPLOYMENT, E.G.
CONTRACT AS WELL AS SUB-CONTRACT LABOUR AND
MIGRATORY AGRICULTURAL LABOUR

• OVER 70% OF THE LABOUR FORCE IN THE UNORGANISED +

ORGANISED SECTOR IS ILLITERATE

• THE 9 PLAN PROJECTS A DECLINE IN THE POPULATION

TH

GROWTH RATE TO 1.59% P.A. FROM 2% P.A. IN THE LAST

THREE DECADES

• HOWEVER IT EXPECTS THE GROWTH RATE OF LABOUR FORCE

TO REACH A PEAK OF 2.54% P.A. OVER THIS PERIOD

Focus on the Global South – India Programme 11

• THIS IS BECAUSE OF THE CHANGE IN THE AGE STRUCTURE, WITH
THE HIGHEST GROWTH OCCURRING IN THE 15-19 YEARS AGE
GROUP IN THE 9 TH
PLAN PERIOD

• THE ADDITION TO LABOUR FORCE DURING THE PLAN PERIOD IS

ESTIMATED TO BE 53 MILLION ON THE ‘USUAL STATUS’
CONCEPT

• ONLY IF THE ECONOMY GROWS AT 8% P.A. DURING THE 9 TH

PLAN WOULD IT BE ABLE TO ABSORB THIS LABOUR FORCE

• GIVEN THE GROWTH RATE OF AROUND 6% P.A. FOR THE FIRST

HALF OF THE PLANNING PERIOD (I.E. 1997-2000) COUPLED
WITH A POSSIBLE DECLERATION OF THE SAME TO AROUND
5.7% IN THE NEXT TWO YEARS IT SEEMS TO BE IMPOSSIBLE TO
ACHIEVE THE TARGETS SET IN THE 9 PLAN
TH

SOME INTERESTING FIGURES ON

EMPLOYMENT IN THE ORGANISED
SECTOR IN THIS DECADE

Focus on the Global South – India Programme 12

 PRIVATE TOTAL ORGANISED
YEAR PUBLIC SECTOR
SECTOR SECTOR

1991 1.52 1.24 1.44

1992 0.80 2.21 1.21
1993 0.60 0.06 0.44
1994 0.62 0.01 0.73
1995 0.11 1.63 0.55
1996 (-) 0.19 5.62 1.51
1997 0.67 2.04 1.09
1998 (-) 0.09 1.72 0.46
1999 0.00 0.11 0.04

AVERAGE OF PERCENTAGE CHANGE

IN REAL WAGES FOR UNSKILLED
AGRICULTURAL LABOUR IN INDIA
AND SELECTED STATES
Focus on the Global South – India Programme 13
 1981-91 1991-99
(PRE-REFORM) (POST REFORM)
ANDHRA PRADESH 5.43 0.12
ASSAM 5.09 -1.93
BIHAR 5.25 0.09
GUJARAT 2.86 5.45
KARNATAKA 3.04 3.34
KERALA 2.59 8.06
MADHYA PRADESH 6.51 1.78
MAHARASHTRA 7.60 1.64
ORISSA 5.29 0.79
PUNJAB 4.10 -0.13
RAJASTHAN 4.97 1.56
TAMIL NADU 2.46 6.07
UTTAR PRADESH 4.95 3.18
WEST BENGAL 6.59 1.29
ALL INDIA 4.68 2.04

SOME IMPORTANT FINDINGS VIS-À-VIS

EMPLOYMENT AND WAGES BASED ON
55TH ROUND OF NATIONAL SAMPLE
SURVEY

Focus on the Global South – India Programme 14

• COMPARISON BASED ON DATA COLLECTED DURING 1993-94
AND 1999-2000

• WHILE THE POPULATION IS PROJECTED TO HAVE GROWN AT A

LITTLE OVER 1.75% P.A. BETWEEN 1994 AND 2000, OVER
THE SAME PERIOD, THE TOTAL (RURAL + URBAN AND MALES +
FEMALES) WORKFORCE HAS GROWN BY JUST 0.81% P.A.

• THE WIDELY ACCEPTED MEASURE OF OPEN UNEMPLOYMENT

INDICATES A WORSENING OF THE UNEMPLOYMENT SITUATION
OVER FOUR POPULATION SEGMENTS

• THE INCREASE IN THE DAILY-STATUS UNEMPLOYMENT RATE IS

THE STEEPEST FOR RURAL MALES, FOLLOWED BY RURAL
FEMALES

• FOR URBAN MALES, THE DAILY-STATUS EMPLOYMENT RATE HAS

INCREASED IN A VERY MODEST WAY BUT THIS MODEST INCREASE
IS TO BE SEEN IN THE CONTEXT OF THE RISE IN THE SHARE OF
CASUAL LABOUR AND A DECLINE IN THE SHARE OF SELF-
EMPLOYED RURAL MALE WORKERS ON THE USUAL STATUS

• THE RISE IN THE PROPORTION WHO HAD SOUGHT ADDITIONAL

WORK IS THE HIGHEST FOR CASUAL LABOURERS IN EACH OF THE
FOUR SEGMENTS, AND AMONG THE CASUAL LABOURERS IT IS THE
HIGHEST FOR RURAL MALES, FOLLOWED BY RURAL FEMALES,
URBAN MALES AND URBAN FEMALES

• CLEAR EVIDENCE OF INCREASE IN SELF-PERCEIVED

UNDEREMPLOYMENT

• IN RURAL INDIA THE AVERAGE DAILY WAGE EARNINGS OF

ADULT, MALE, CASUAL LABOURERS FINDING EMPLOYMENT IN
PUBLIC WORKS HAVE GROWN IN REAL TERMS BY OVER 3.8%

Focus on the Global South – India Programme 15

 P.A. WHEREAS FOR FEMALES IT HAS GROWN AT A LITTLE ABOVE
5% P.A.
• THE RATE OF GROWTH OF REAL AVERAGE DAILY WAGE
EARNINGS OF RURAL MALE CASUAL LABOURERS EMPLOYED IN
NON-AGRICULTURAL ACTIVITIES IS ONLY MARGINALLY LOWER
AT 3.70% P.A.
• IN CASE OF AGRICULTURE THE FIGURE IS 2.8% P.A. FOR THE
SIMILAR CATEGORY

WHICH INDUSTRY IS CREATING MORE

EMPLOYMENT THAN THE OTHERS ?
PER 1000 INDUSTRIAL DISTRIBUTION OF
WORKFORCE
1993-94 1999-2000
INDUSTRY
R U T R U T

AGRICULTURE, FORESTRY AND 784 123 639 761 88 598

Focus on the Global South – India Programme 16

 FISHERY
MINING & QUARRYING 6 12 7 5 8 6

MANUFACTURING 70 236 107 74 227 111

ELECTRICITY, GAS & WATER 2 10 4 1 7 3
CONSTRUCTION 24 63 32 33 79 44
TRADE, HOTELS &
43 194 76 51 269 104
RESTAURANTS
TRANSPORT, STORAGE &
COMMUNICATION AND 14 79 29 21 87 37
BUSINESS SERVICES
FINANCE, INSURANCE, REAL
3 34 10 4 41 13
ESTATE & BUSINESS SERVICES
COMMUNITY, SOCIAL &
54 248 97 49 195 84
PERSONAL SERVICES
WHAT DOES THE ‘TASK FORCE ON
EMPLOYMENT OPPORTUNITIES’ SAY…

• ORGANISED SECTOR EMPLOYMENT SLOWED DOWN FROM A

GROWTH OF 1.59% P.A. DURING 1980S TO 0.72% BETWEEN
1990-99
• THIS DECELERATION HAS BEEN ENTIRELY DUE TO THE SLOWING
DOWN IN EMPLOYMENT IN THE PUBLIC SECTOR FROM A GROWTH
RATE OF2.22% P.A. BETWEEN 1980 TO 1990 TO A MEAGRE
0.38% DURING THE 1990S

Focus on the Global South – India Programme 17

• ON THE OTHER HAND, THE ORGANISED PRIVATE SECTOR, WHICH
GREW BY ONLY 0.16% BETWEEN 1980 AND 1990,
EXPERIENCED ACCELERATION IN THE 1990S AND GREW BY
1.53%
• PUBLIC SECTOR EMPLOYMENT IN THE ORGANISED SECTOR IS
UNLIKELY TO ACCELERATE IN THE FUTURE

• SELF-EMPLOYMENT DECLINED FROM 58.9% IN 1977-78 TO

52.9% IN 1999-2000 (PRIMARILY IN RURAL AREAS)
• THE FALL IN SELF-EMPLOYMENT IN RURAL AREAS REFLECTS
THE DISPLACEMENT OF MARGINAL CULTIVATORS AND THEIR
CONVERSION INTO AGRICULTURAL LABOUR

• THE TASK FORCE ALSO ACKOWLEDGES THE FACT THAT SHARE

OF CASUAL LABOUR HAS INCREASED FROM 29.7% OF RURAL
EMPLOYMENT IN 1977-98 TO 37.3% IN 1999-2000

• THE TASK FORCE OPINES THAT SELF-EMPLOYMENT NEEDS TO

BE PROMOTED THROUGH A SUPPORTIVE REGULATORY
FRAMEWORK, SUPPORT FROM OTHER AREAS LIKE BANKING AND
BY ENSURING THAT THERE IS ADEQUATE GROWTH OF
EMPLOYMENT OPPPORTUNITIES IN THIS AREA

• THE REPORT ALSO NOTES THAT GIVEN THE LEVEL OF RISK

INVOLVED IN SELF-EMPLOYMENT, LOWEST INCOME GROUPS
WOULD CONTINUE TO DEPEND HEAVILY UPON THE AVAILABILITY
OF REGULAR WAGE EMPLOYMENT

• THE TASK FORCE OPINES THAT LABOUR LAWS SHOULD BE MADE

MORE FLEXIBLE AS IT WOULD ENCOURAGE GREATER
DEPENDENCE UPON REGULAR EMPLOYMENT AND IMPROVE THE
QUALITY OF EMPLOYMENT FOR LABOUR AS A WHOLE

Focus on the Global South – India Programme 18

 WHAT ABOUT POVERTY?

ESTIMATES OF POVERTY (%)

YEAR ALL INDIA RURAL URBAN

1973-74 54.9 56.4 49.0
1977-78 51.3 53.1 45.2
1983 44.5 45.7 40.8
1987-88 38.9 39.1 38.2
1993-94 36.0 37.3 32.4
1999-2000
30 DAY RECALL 26.1 27.09 23.6
7 DAY RECALL 23.3 24.0 21.6

Focus on the Global South – India Programme 19

• THIS SUDDEN DECLINE OF 10% IS BEING ATTRIBUTED TO THE
CHANGE IN MANNER AND METHOD OF DATA COLLECTION THAT
WAS ADOPTED DURING THE 55TH
ROUND BY THE NATIONAL
SAMPLE SURVEY ORGANISATION

HOW HAVE THE GOVERNMENTS

REACTED TO THESE ISSUES

• MORE OR LESS ALL GOVERNMENTS, BOTH AT THE CENTRE AND

IN THE STATES, SINCE 1991 HAVE MUTELY ACCEPTED THAT
THE DIRECTION AND MAGNITUDE OF REFORMS IS IRREVERSIBLE

• THE PACE AND QUALITY OF REFORMS HAVE VARIED WITH THE

NATURE OF COALITIONS THAT HAVE COME TO POWER BOTH AT
THE CENTRE AS WELL AS THE STATE
• EVEN THOUGH ALLGOVERNMENTS HAVE EXPRESSED
APPREHENSIONS ABOUT ACCELERATION OF ‘JOBLESS GROWTH’
NONE HAVE BEEN ABLE TO REVERSE THE TREND, THANKS TO
POLITICAL INSTABILITY, AND THE COMMITMENT OF THESE
GOVERNMENTS TO THE NATURE OF REFORMS

• REDUCTION OF FISCAL DEFICIT IN SPITE OF ITS

DEVELOPMENTAL IMPLICATIONS HAS BEEN ACCEPTED AS A
SACROSANCT STATEMENT BY MOSTLY ALL GOVERNMENTS AT
THE CENTRE

Focus on the Global South – India Programme 20

• REACTIONS TO ISSUES PERTAINING TO FDI, PUBLIC SECTOR
DISINVESTMENT ET AL HAVE VARIED ACROSS GOVERNMENTS BUT
THE DIRECTION OF THINKING HAS REMAINED MORE OR LESS THE
SAME

• GOVERNMENTS HAVE ALSO NOT CHALLENGED THE DIRECTION

OF INSTITUTIONALISING REFORMS, ESPECIALLY IN THE AREA OF
TRADE AND FINANCIAL LIBERALISATION

• IN EVERY COALITION GOVERNMENT AT THE CENTRE, THERE

HAS BEEN ATLEAST ONE PARTY WHICH HAS SHOWN KEEN
INTEREST IN PUSHING THE COUNTRY INTO SO CALLED ‘SECOND
GENERATION REFORMS’ WITHOUT ANALYSING THE
SOCIOECONOMIC IMPACTS OF REFORMS TILL DATE

• GIVEN THE GROWING STRAIN BETWEEN CENTRE AND THE

STATES, SOME OF THE STATE GOVERNMENTS, TO PROVE THEIR
ECONOMIC SOVEREIGNTY, HAVE GONE OVERBOARD TO PUSH
REFORMS IN ORDER TO SEEK EXTERNAL FINANCES

Focus on the Global South – India Programme 21

 WHAT DO WE CONCLUDE?

• DEVELOPMENTAL IMPACT OF REFORMS IS GETTING

INCREASINGLY CONCENTRATED

• REFORMS ARE INCREASINGLY CATERING TO THE POLITICAL

ECONOMY OF THE RICH, UPPER-MIDDLE AND MIDDLE CLASSES

• REFORMS HAVE KICKSTARTED A MARGINALISATION PROCESS,

BUT WITH A DIFFERENT DIMENSION

• INTERESTINGLY THE MIDDLE CLASS AT LARGE HAS NOT

UNDERSTOOD THE LONG TERM POLITICAL AS WELL AS SOCIAL
CONSEQUENCES OF THE CURRENTLY ONGOING REFORM PROCESS

• WE ARE IN A VERY CONFUSING SITUATION WHEREIN OUR MICRO

EXPERIENCES AND MACRO DATA THAT IS PRESENTED ON THE
SOCIOECONOMIC CONSEQUENCES OF REFORMS ARE COMPLETELY
AT CROSSROADS

• CONVINCING GOVERNMENTS OF VARYING IDEOLOGIES ON HOW

REFORMS AND ITS INSTUTIONALISATION ARE NOT WORKING FOR
THE MARGINALISED IS GETTING INCREASINGLY DIFFICULT

• PEOPLE ARE GETTING MORE AND MORE PUZZLED ABOUT

ALTERNATIVES WITH THE CONFLICTING SET OF INFORMATION
THAT IS BEING PRESENTED TO THEM VIS-À-VIS THE IMPACT OF
REFORMS
Dear members,
I am doing thesis on e-service quality, trying to extract and confirm dimensions of
e-servcie quality. I have found 8 factors of e-servcie quality. These factors

Focus on the Global South – India Programme 22

contain 3 to 6 items. Now the problem is to validate my finding using regression.
Many reseaches I know are suggesting to take summed scores of each factor as
independent variables for regression with overall e-servcie quality as dependant
variable. Still other researchers are in view that factor scores should be taken.
Some others are recommending the average scores of each factor. The research
papers published in the field have taken mostly the summed scores and factor
scores are taken by few in case of multicollinearity problems.
Can anyone guide me which method should I use?
Anand Agrawal

Focus on the Global South – India Programme 23