[Ip-health] COMBATING GLOBAL FINANCIAL CRISIS - NCEUS for Rs 58,000 cr bailout for the poor

[Indian Society For Sustainable Agriculture]

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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-t=
he-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 Unorga=
nised Sector (NCEUS), with a view to insulate the country's poor from the a=
dverse impact of the global financial crisis, has suggested a Rs 58,000 cro=
re (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 i=
mplementation of the package.

  "The NCEUS members, alongwith its chairman met the Prime Minister, Manmoh=
an Singh and urged him to immediately implement the proposals in the remain=
ing 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 c=
ountry and the poor are worst affected. In the first half of the year the u=
norganised 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 liv=
e on less than Rs 20 a day.

  Out of the Rs 58,000 crore (Rs 580,000 million) package the panel suggest=
ed Rs 5,000 crore (Rs 50,000 million) special programme for small and margi=
nal 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 em=
ployment 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 g=
overnment'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 prog=
ramme for informal workers, increase in investment in rural infrastructure =
and basic urban facilities, stepping up of land and water management progra=
mmes, lifting the ceiling on mandated 100-day employment per household unde=
r the National Rural Employment Guarantee Scheme, enhanced investment in hu=
man resources development.

  According to NCEUS, informal sector consists of all unincorporated privat=
e enterprises owned by individuals or households engaged in the sale and pr=
oduction of goods and services operated on a proprietary or partnership bas=
is and with less than 10 workers in total.

  There are an estimated 58 million enterprises in the non-agriculture unor=
ganized sector employing less than 10 workers. Of these 94% have an investm=
ent 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 e=
nterprises contribute 31% to the GDP.

  The panel called for increasing credit flow to small enterprises having i=
nvestment 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 hous=
eholds, 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 hav=
ing informal jobs without any social security. Out of the total workforce o=
f 475 million in 2004-05, 420 million worked in the informal economy =E2=80=
=93 6% in the formal sector and 86% in the informal sector and thus informa=
l workforce total to 92%.

  About 34% of the informal sector workers in 2005 were females and about 4=
8% of the self-employed women were unpaid family workers as against 17% mal=
e.

  A marginal farmer is defined as one having land holding below 2.5 acre la=
nd and a small farmer is defined as one having land holding up to 5 acre. S=
cheduled castes and tribes constitute a large section of the workforce in t=
he informal sector. About 64% of the workforce is in agriculture. Among agr=
iculture workers, 74.6 million (29.5%) are marginal farmers and 39.9 millio=
n (15.8%) are small farmers. Small and marginal farmers contribute 60% of t=
he output.

  The NCEUS has said that the growth in the GDP need not necessarily lead t=
o employment generation. Specific employment generation strategies need to =
be incorporated in the development planning process. The conventional appro=
ach followed by the Planning Commission generally does not make any distinc=
tion between informal and formal sectors. It also does not consciously fact=
or in the planning process the educational and social profiles of the perso=
ns seeking employment, their specific work capabilities and state wise vari=
ations in the size and composition of labour force and existing employment =
opportunities.

  The NCEUS had earlier submitted seven reports since 2006. Its proposals f=
or 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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