Economic Reform and Employment

Economic Reform and Employment

The new economic reforms have been emphasing new power projects both in the public and the private sectors. Besides causing environmental problems, these projects have been displacing people from their traditional livelihood systems. By encouraging multinationals to enter food-processing industries, the reform process by the sheer competition from these business giants has led to labour displacement. The entry of big business in agriculture has also led to displacement of labour displacement. The entry of big business in agriculture has also led to displacement of labour engaged in the marketing of agricultural produce. The case of fisherman is glaring and has resulted in massive protests from fishermen who were faced with a threat to unemployment as a consequence of competition from mechanized boats. Consequently, there is a good deal of evidence to corroborate the view that the process of economic reform has generated far greater backwash effects in terms of labour displacement, than in generating spread effects in terms of enlarging new employment opportunities. The net effect of these trends is the deterioration in the quality of employment opportunities. The net effect of these trends is the deterioration in the quality of employment and this is witnessed in the growing increase in the number of casual labourers – the most unprotected form of Indian labour. Casualisation of a labour is witnessed even in industry as a result of the growing phenomena of lockouts and closures. G. Parthasarthy reviewing the impact of structural adjustment on employment concludes: “Given this short period experience, what the medium-term has in store for the Indian poor is anybody’s guess. It is essentially dependent upon the rate and composition of growth and its effects on employment. With past experience as a guide, we may achieve a high growth rate, the benefits of which may flow to the affluent and middle class. The poor may not gain because jobs are not found to grow with incomes. This type of scenario could call for effective safety nets for unorganized sectors in the form of right to work at a minimum subsidized wage and guarantee against unemployment through unemployment insurance.” (Parthasarthy G, Social Security and Structural Adjustment, the Indian Journal of Labour Economics, Vol. 39, No. 1, Jan-March 1996).