I think it is a matter of common sense that in a moving car all the tyres move with an equal speed. If we divide our economic sectors into Agricultural, Industrial and Services, however it is obvious that all the three sectors cannot grow at an uniform speed. Thus for instance the Services Sector in India is growing at the faster pace, the Industrial Sector at a medium pace and the Agricultural Sector at the lowest pace at the moment. As a matter of fact, in the fiscal of 2002-03 there was a drop of about 13% in agricultural production, but nevertheless the GDP grew at 4.4% largely on the basis of a 7.1% growth in the Services Sector and 5.5% growth in the Industrial Sector.

It would appear that the present strategy is to allow the Services Sectors to grow on its own. It is also expected explicitly or implicitly that it is the Services Sectors, which would generate most of the jobs. There is no doubt that the Housing and Construction Sectors are expanding at a good pace and is also creating a large number of jobs. The IT Sector is also growing at a good pace. The Industrial Sector however, despite a growth is not creating new jobs. Indeed, the growth in employment in the Industrial Sector may even be negative if one subtracts the number of people separated through VRS from the number of new entrants. The Agricultural Sector, it is well known, is by far too labour intensive and need to be mechanized if a higher growth is to be achieved.

The question, therefore, is, can the Service Sector grow at a sufficiently fast pace to absorb those who are presently unemployed and also the future additions to the labour force. Also, the type of employment and the remuneration paid by this sector need to be taken into account. It is obvious that employment in the Service Sector cannot be of a permanent nature. Also, the nature of employment in this sector will have to be highly mobile. The wages by and large are not such as may induce the workers to be mobile. For instance, a Construction company will employ a large number of people through sub-contractors from the locality in which it is operating. These, people cannot be permanently employed. Nor it likely that they will move to another part of the country if the construction workers were to get next job there.

A sense of gloom, uncertainty, even of despair seems to have gripped the population. What is needed is to identify a particular sector or sectors of the economy, which can grow fast enough to absorb the millions of unemployed and give them a sense of purpose and help them to find some manner in their life.

In most of the countries abroad, bulk of the employment is provided by the Small Sector of the industry. However, unfortunately in India although the number of SSIs run into lakhs, they have not been able to provide either sustainable or meaningful employment.

It has often been argued that it is the rigidity of the Labour Laws, which inhibit employment. Industrialists and Economists are even harping on the need for a reform Labour Laws, which will make it easy for employers to adjust their work force according to their needs. Indeed in the budget for 2002-03 the then Finance Minster has announced certain charges like doing away with the need for prior permission to close down an establishment or retrench the employees coupled with increasing the compensation to 45 days wages per year of services as against the present 15 days. This however has not happened. However, despite this provision of prior permission for closure and the fact that no such permission has ever been granted by any Government, thousands of establishments lie closed.

There is no denial that the problems are acute, that structural reforms are necessary.

Nevertheless, if liberalization is to move forward and if it is believed that economic progress cannot be achieved without liberalization than the structural requirements necessary will have to be made. The requirements are to have an unemployment insurance scheme coupled with sufficiently flexible employment norms.

The country is already facing a demand depression. No sector of the economy can grow without sustainable development and development can be sustained only when the purchasing power of the people as a whole increases. The rich may grow richer, but the poor must also be less poor. This can happen only when meaningful employment grows. This perhaps is the greatest need of the hour, which the Government, the Employers and the employees must realize and act in concert to provide some solution.