alain Lipietz, an economist and a leading light in Les Verts, the French Green Party, has just finished writing a book which I am keen to read. It deals with green perspectives on the unemployment problem which today plagues a number of west European nations.
With the us doing relatively better on the employment front, this has become a matter of some embarrassment for the west Europeans, who have created a far more inflexible job system. And they know that with growing global competition and their desire to develop the European Monetary Union, they will have to reduce their heavy budgetary deficits and therefore, the large state expenditure on social security, which includes payments of subsistence allowance to the unemployed. This is the well-known and much debated system of 'welfare'.
Among the options that Lipietz is looking at is the creation of jobs in the community sector. Recently, both the leading political parties in uk came together to propose a new employment programme. A 'right to work' bill was jointly co-sponsored, and the British Prime Minister commissioned a consultancy firm to work out the costs of the proposed scheme called 'workfare', as distinct from 'welfare'.
The Labour Party, in its recently published Road to the Manifesto document, pledges that if it came to power, it would offer every young person -- unemployed for more than six months -- a subsidised job in the private sector, a non-profit voluntary-sector employer, an educational institution or a govern ment-financed 'environment task force'.
I am sure the British are not aware of this but this is precisely the concept that was first pioneered by V S Page, a Gandhian social worker from Maharashtra, which ultimately led to the employment guarantee scheme ( egs ) of Maharashtra. The egs was the only government scheme across the developing world which legally guaranteed work to all citizens for a 'survival wage'.
Page had realised that in India, the demand for work amongst rural poor increased during periods of drought when employment in the agricultural sector went down dramatically, forcing them to migrat, seeking city-based jobs and become impoverised furthers.
The Government of India decided to emulate the egs on a national scale, but without the legally guaranteed 'right to work' because of the high cost -- about Rs 15,000 crore in the mid-1980s. V P Singh's Janata Dal ( jd ) government, however, promised in 1990 to enact a constitutional amendment to guarantee the right. I had worked closely with L C Jain, then a Planning Commission member, to help prepare the Cabinet note on the 'right to work' programme.
But with the Gulf War intervening and the ensuing fiscal crisis, V P Singh did not evince any further interest in it. Moreover, he had decided to bet his political future on the issue of job reservations for backwards, in the form of the Mandal commission recommendations.
The new jd government has -- true to the opportunistic ideological state of our political parties -- forgotten all that. But apart from the concept of right to work, there is another similarity between the British proposal and the egs experience, and that is in terms of mobilising labour for environmental purposes. In the initial phases most of the work that was generated in egs was in making roads. But soon there were few roads to build and people began to be put to work related to environmental regeneration efforts like afforestation and soil and water conservation.
These schemes had, thus, created a massive environmental task force. Many rural activists and thinkers even began to argue that if this policy was combined with village-level natural resource planning and rights of rural communities over their natural resources, the schemes could revive the natural capital to a point that they would remain not just anti-poverty programmes -- as they were called -- but actually programmes to end poverty in India, as the work of Anna Hazare in Ralegan Siddhi village has amply shown.
But what is saddest in India is that unemployment is not even a top issue of public and political concern today. The government does not even have a think tank to identify public policies to deal with this problem which is bound to grow as population increases.
There is no dearth of ideas. Apart from the obvious relevance of Page's scheme, I have often wondered whether the Indian taxation system can be used to create jobs. Today, because of job inflexibility, most companies prefer labour substitution. This is why employment in the organised sector has not increased substantially.
Let us suppose the government were to identify certain levels of capital investment or total outturn per job created; companies achieving lower levels of this indicator would get higher tax rebates. This would thus be essentially a tax on machines and push the economy towards greater labour-intensity rather than capital-intensity. Its impact on employment could be substantial. The elite would, of course, have to pay more for their products, which would mean internalisation of some social costs by them. Naturally, this would have to be accompanied with greater job flexibility. I am not saying that this proposal is the best course of action. But I am convinced that as we move towards greater industrialisation and liberalisation, such issues must be publicly debated and policies developed accordingly.
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