Employment reforms may speed up poverty eradication

MUMBAI: At least 16 crore Indians can be pulled out of poverty in next twenty years with the help of targeted labour market reforms. These reforms need to be focused on workforce transition from farm to non-farm, rural to urban, unorganized to organized and subsistent self-employment to decent wage employment.

These are the key takeaways from the India Labour Report 2008 released by Bangalore based Teamlease, a leading staffing company in the country. ���20 years of economic reforms show that growth is a necessary but not sufficient condition for poverty reduction. Poverty eradication needs changing the profile of India's workforce by moving out of roles with low incomes and low productivity,��� mentions the report.

The report highlights three strategies to bring in labour reforms. The first is to establish efficient labour supply channels to meet demand by converting employment exchanges into career forums that offer not only jobs but career counselling and certifications after assessment of candidate���s skill sets. The second strategy is to enhance the employability or the chances of a candidate to be employed by initiating national skill programs.

The third strategy is to facilitate the supply of skilled labour by undertaking education reforms. This can be achieved by decentralization, autonomy and governance reforms for institutions across the country. If these strategies are implemented, the country can reach the 5% poverty rate at least 20 years earlier, claims the report.

The report also highlights that India will emerge with one of the biggest pools of working-age people in next 15 years. ���By 2026, total population will increase by 37 crore people and 83% of the increase will occur in the age group of 15-59 years. This can be referred to as India���s demographic dividend,��� says the report.

Given that the share of working class in total population would decline for most developed countries, India would be in a position to leverage its labour cost advantage through emigration, temporary labour exports and outsourcing.

By ET Intelligence Group