3rd Five Year Plan
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Introduction || Planning Commission
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Chapter 10:

Analysis of The Problem

Employment has been a major objective of planning in India; it was so in the first two Plans and has assumed a special urgency in the Third. Full utilisation of the available manpower resources can be achieved after a considerable period of development. However, expansion of employment opportunities commensurate with the' increase in the labour force over the Plan period is conceived as one of the principal aims of the Third Plan. In view of the numbers involved, provision of adequate employment opportunities is among the most difficult tasks to be accomplished during the next five years.

2. In the rural areas, both unemployment and under-employment exist side by side; the distinction between them is by no means sharp. In the villages, unemployment ordinarily takes the form of under-employment. In many parts of the country, during the busy agricultural seasons, shortages of labour are frequently reported, but over the greater part of the year, a large proportion of agricultural labour and others engaged in allied activities are without continuous employment. The consequent drift of workers from villages to towns only serves to shift the focus of attention from rural areas to the urban. Though recent surveys show a somewhat higher rate of unemployment in the towns, this itself is a reflection of the lack of adequate work opportunities in rural areas. Urban and rural unemployment in fact constitute an indivisible problem.

In the urban areas, employment is linked with fluctuations in the state of business, transport and industry. Any change in conditions is reflected in an increase or decrease in employment figures. While this is generally true, towns—large and small—share with villages a measure of distress caused by under-employment.

3. The existing data are inadequate for building up a sufficiently detailed picture of the state of employment for the country as a whole and in its regional, urban and rural aspects. But statistics apart, there is a general belief, which is strengthened by the limited number of employment opportunities reported to the employment exchanges and the pressure of employment seekers on them, that in terms of unemployment the economy suffered significant deterioration in the last five years. The high rate of growth of population, as reflected by the limited 1961 Census data, now available, would indicate that the problem is one of increasing complexity. This has been broadly confirmed by the findings of the Second Agricultural Labour Enquiry, the National Sample Survey and the studies undertaken by the Programme Evaluation Organisation. This., however, is not a complete statement. Development programmes have provided additional employment opportunities to a significant extent; but these are not being created fast enough to absorb the numbers who enter the labour force each year. If any further deterioration in the employment situation is to be avoided, the goal of planning must be to absorb in gainful employment in each five-year period at least the equivalent of new entrants to the labour force.

4. It is not easy to measure unemployment in an under-developed country. There is a tendency, specially among the self-employed, to share work between members of the family or the group. Where the available work opportunities are spread too thinly even to provide tolerable means of livelihood, a part of the population migrates in search of paid employment. It is in relation to this section of the population that the term "unemployed" can be used with some exactness. For the rest, one can only speak of under-employment for varying periods. An important factor in planning for larger employment within the present occupational structure is that, for lack of employment opportunities, a considerable proportion of self-employed persons have to function below capacity and do much less work than in fact they are willing to. Statistics about under-employment depend very much on how the term is defined. At the present stage of development, it is difficult to determine the volume of under-employment with reference to 'norms' of hours per day to be worked by individuals or other similar criteria. It is more meaningful to judge the amount of under-employment by the extent of additional work an individual may be willing to take up. This is the concept which has been adopted in the more recent rounds of the National Sample Survey.

5. The limited data at present available may be considered in relation to the following aspects of the employment problem; (a) numbers unemployed at the end of the Second Plan, (b) addition to the labour force during the Third Plan, and (c) assessment of additional employment likely to be secured through the implementation of the Plan as formulated. It is also necessary to take into account such measures as would help to step up the employment effect of development schemes with a significant labour component, such as construction and small industries. Even if the full employment potential of the Plan is achieved, it will be necessary to think of special employment programmes to cover the residual employment gap.

6. In the course of the Second Plan the additional employment opportunities created amounted to about 8 million, of which about 6.5 million were outside agriculture. The backlog of unemployment at the end of the Second Plan is reckoned at 9 million. This estimate is admittedly rough. It takes account of the estimate of unemployment as. at the beginning of the Second Plan (5.3 million), the larger increase in labour force during the Second Plan period than had been visualised earlier (1.7 million), and the estimated shortfall in the employment target . originally proposed for the Second Plan (about 2 million). In addition, under-employment in the sense of those who have some work but are willing to take up additional work cannot be precisely estimated, but is believed to be of the order of 15—18 million.

7. Increase in the labour force during a given period is calculated with reference to the proportion of men and women in the age group 15—59 years who are estimated as being gainfully employed or seeking employment. In the Draft Outline of the Third Plan, the increase in labour force had been worked out at 15 million, and it was pointed out that, if deterioration in the employment situation was to be avoided, additional employment opportunities of this order would have to be found during the Third Plan. Information for the 1961 Census regarding the age composition of the population and changes in the extent of participation in the labour force by men and women is not yet available and, at this stage, certain general as-. sumptions on these aspects have to be made on the basis of the latest reports of the National Sample Survey. On such estimates as are at present possible, it appears that during the Third Plan the addition to the labour force may he of the order of 17 million, about a third of the increase being in the urban areas. When fuller data become available, it will be necessary to work out the increase in the labour force in relation to different States, so that each State may endeavour to realise the employment potential of programmes and projects under the Plan and consider the extent to which these could be supplemented by other measures. In a growing economy, mobility of labour, specially among skilled workers, is of great importance and should be encouraged and facilitated. However, in relation to the numbers involved, the effects of such mobility as can be achieved in the next few years will be necessarily limited and will not affect the total size of the task to be undertaken in each State or region.

8. The employment objectives of the Third Plan need to be viewed in the perspective of a longer period. Increase in the labour force over the next 15 years may be of the order of 70 million. This consists roughly of about 17 million in the Third Plan, about 23 million in the Fourth and about 30 million in the Fifth Plan. The experience of the first two Plans has shown that a larger proportion of the employment opportunities generated during the period have gone to the non-agricultural sector. On the assumption that this trend will continue in future and also that about two-thirds of the increase in the labour force over the next 15 years is absorbed outside agriculture, it should be possible to reduce the proportion of the working force dependent on agriculture to around 60 per cent by 1976.

9. There are inherent difficulties in estimating the employment potential of the vast range of projects and programmes which form part of a plan of development stretching over a period of five years. In each sector of the Plan two major assumptions have to be made. The first is that through appropriate economic and other policies, production and employment will not be allowed to fall below the existing levels. Secondly, the various development programmes for which the Plan provides will be undertaken with the necessary efficiency and economy and continuity of output would be assured. In some fields, as in agriculture and trade, it is specially difficult to estimate the likely additional employment. Increase in agricultural production, to which the Plan devotes a fair share of resources, will lead primarily to reduction in under-employment, although there will also be a measure of net increase in employment opportunities. In less developed countries, the numbers, engaged in trade are large, in relation to the work they are required to handle, so that the effect of expansion in the trading sector is more to reduce under-employment than to provide additional work opportunities to new entrants.

10. In industry, increase in investment and capacity does not lead to a proportionate growth of employment because new processes, specially in large-scale manufacture, have generally to be based on high productivity techniques. The choice of techniques becomes, thus, a matter of crucial importance for employment policy. In certain branches of industry, it is essential to adopt the scale and methods of production which will yield the largest economies. This has to be balanced by a deliberate effort in other fields to employ techniques which will be more labour-intensive and will save on capital resources, specially foreign exchange. Labour intensive methods have even wider application in the field of construction in which, given the necessary organisation and advance planning, it is possible to use manpower to a greater extent than has been common in recent years. 'What techniques should be adopted have to be determined not only according to the types of activities to be carried out, but also by the economic and social characteristics of the regions in which they are undertaken. In areas in which there is considerable pressure of population, special care must be taken to follow methods which, consistent with the overall objectives, make the maximum use of the available manpower resources.

11. In estimating the employment effects of the Plan, it is usual to distinguish two phases of employment—the construction phase and the continuing phase. Employment on construction, though temporary, postulates a certain order of investment even for maintaining it at a given level. Increase in construction employment can, therefore, be estimated with reference to the increase in investment over the previous Plan period. Since investment in construction is divided broadly between the labour component on the one hand, and machines, materials and services on the other, for working out the additional employment, the former has to be calculated with some precision.

12. In estimating continuing employment in fields such as agriculture, irrigation, industry, transport, social services, trade, etc., a variety of criteria have to be followed. For instance, development of agriculture, afforestation and irrigation facilities may in part reduce underemployment and in part provide full-time employment to new entrants. It is by no means easy to ascertain the relative share of the benefits to the under-employed and to new entrants. Programmes of development like soil conservation, afforestation, land reclamation, flood control, settlement on land and the utilisation of irrigation facilities will provide means for employing new entrants to the labour force in addition to giving greater employment to those who are already at work. For this purpose certain norms have been adopted on the basis of experience accumulated over the last ten years.

13. In estimating additional employment in industries, depending upon then- character, employment may have to be related either to the investment or to increase in levels of production after allowing for rise in productivity in some cases ; in others, reliance has to be placed on project reports and on information supplied to the Licensing Committee. In road transport, the criterion may be furnished by different indicators of increase in the volume of passenger and goods traffic. In the field of social services a variety of tests have to be adopted, depending upon the level at which the Plan intends to provide these services to the community. For instance, in health services, the requirements of different types of personnel were assessed in relation to the population served. In education, the pupil-teacher ratio was used as the criterion.

14. Apart from the direct employment flowing from different development programmes, account has also to be taken of indirect employment in such fields as trade, commerce and transport. In the Second Plan, indirect employment was reckoned at 52 per cent of the additional employment which could be attributed to development programmes under the Plan, both in the public and the private sectors. On the basis of recent studies it would be reasonable to assume for the Third Plan, indirect employment benefits at 56 per cent of the additional employment attributable to development programmes in the Plan. Finally, certain checks have to be applied to estimates of additional employment worked out for different sectors. Gradually, fuller data for such overall appraisal are becoming available. These include the results of special surveys and investigations, project studies, employment market information gathered by the National Employment Service, and analysis of information provided in applications submitted for industrial licences. Estimation of employment in relation to a plan of development involves a number of assumptions, which have to be continuously tested. In the nature of things, therefore, there can be no finality in estimates of employment which might be worked out in relation to a plan of development. Experience of the last ten years shows that there is need for continuous examination and improvement of methods and for assessment of the actual performance in relation to initial estimates of employment and investment. To facilitate this, a detailed statement of the assumptions made in calculating the additional employment potential of the Third Plan is given in Appendix C.

15. Following the methods of estimation explained above, it is reckoned that the Third Plan may provide additional non-agricultural employment of the order of 10.5 million and additional employment in agriculture of about 3.5 million. The additional non-agricultural employment is distributed broadly as follows:

Additional non-agricultural employment
(in lakhs)

sector additional employment in the Third Plan
1 construction* 23-00
2 irrigation and power 1 -00
3 railways 1 -40
4 other transport and communications 8-80
5 industries and minerals 7-50
6 small industries 9-00
7 forestry, fisheries and allied services 7-20
8 education 5-90
9 health 1 -40
10 other social services " 0-80
11 government service 1-50
  total (1 to 11) 67-50
12 'others' including trade and commerce at 56 per cent of total
(1 to 11)
  Grand total 105 -30

16. Besides additional employment outside agriculture and in agriculture described above, there will also be significant relief to underemployment, but it is difficult to indicate its extent in quantitative terms. In agriculture, only about a fourth of new employment potentialities have been taken account of for estimating additional employment and the remaining are expected to provide relief to under-employed persons. In village and small-scale industries, only full-time jobs have been accounted for in the table above. While the economy seeks to absorb as many workers as possible into non-agricultural occupations, during the Third Plan it is expected that there will be a net addition to the total number of workers engaged in agriculture. A large part of the increase in the labour force will take place in families who are at present dependent on agriculture. If employment opportunities do not develop sufficiently in the non-agricultural sectors, under-employment in agriculture will be further intensified, leading to lowering of living standards in a section of the community upon whom the growth in population has already borne harshly. It should also be stated that in the nature of things, estimates of additional employment arising from the Plan are subject to a considerable degree of uncertainty. If some of the assumptions made are not borne out by later experience, or if the various programmes and projects are not implemented in a sufficiently effective and continuous manner, the additional employment estimated above may not be fully realised.

17. If, in consequence of Plan programmes, employment opportunities are available for about 14 million persons, leaving aside the backlog of unemployment, even for providing work for the new entrants to the labour force, there is need to find additional employment opportunities for 3 million persons. This is considered to be an essential objective in the Third Plan.

At this stage it must be emphasised that although the validity of quantitative estimates is affected by the inadequacy and complexity of employment data, experience in the First'and Second Plans show that employment targets could not be achieved in full because of shortfalls in performance in various sectors of the Plan. Every attempt has, therefore, to be made to avoid the recurrence of such a situation.

It is proposed that the problem should be approached along three main directions. Firstly, within the framework of the Plan, efforts should be made to ensure that the employment effects are spread out more widely and evenly than in the past. Secondly, a fairly large programme of rural industrialisation should be undertaken with special emphasis on programmes of rural electrification, development of rural industrial estates, promotion of village industries, and effective re-deployment of manpower. Even though, in the first instance, the introduction of new production techniques may result in a decrease in employment, it is expected that rhere will be significant long-term benefits in revitalising the rural economy. Thirdly, in addition to other measures for increasing employment through small industries, it is proposed to organise a rural works programme, which will provide work for an average of say, 100 days in the year for about 2.5 million persons and, if possible, more. These programmes, and specially the proposal for rural works, will assist the general mass of the population and will also provide increased opportunities for the educated unemployed. The latter have, however, certain special problems of their own, which are briefly discussed in a later section of this chapter.

*Since construction accounts for a large portion of the measureable employment, its break-up under different developmental sectors may be useful :

agriculture and community development 6-10
irrigation and, power 4-90
industries and minerals, including cottage and small industries 4-60
transport and communications, including railways 3-40
social services 3-50
miscellaneous 0-50
tolal 23-00

Employment And Plan Implementation

18. From studies which have been undertaken, there is reason to believe that there are several ways in which it might be possible to secure larger gains in employment from the development programmes which are undertaken than has been the experience in recent years. It is common to analyse the problem of unemployment in terms of the country as a whole or in relation to large territories such as States. Sufficient attention has not been given to the possibilities of making a larger impact on the employment problem at the district and block levels. Every district has development programmes relating to agriculture, irrigation, power, village and small industries, communications and social services. These programmes are intended to raise the level of economic activity of the district and to increase production generally. Besides the direct employment they provide, many of the programmes are intended to stimulate individual farmers, artisans and small entrepreneurs and cooperatives to extend their activities and, in the process, provide additional employment. If full advantage is taken of these programmes and they are carefully adapted to the local needs, it should be possible to realise greater employment benefits at the district and local level. The unemployment problem in each State should, therefore, be broken down by districts, and at each level— village, block or district—as much of it as possible should be tackled. Such an analysis of local employment problems would enable the authorities to focus attention on and to raise resources for dealing with specific employment aspects, e.g. unemployed artisans and agricultural labourers, educated unemployed, etc. Since the problems in different areas are necessarily different, the employment approach at the area level will have to be worked out with a certain measure of flexibility to suit local conditions and resources.

19. The severity of employment problems makes it necessary to re-examine the scope that exists in individual construction projects for the increasing utilisation of manual labour. In the usual course, machinery is utilised in construction in cases where mechanisation would lead to considerable economies in terms of reducing costs and in shortening the construction period. It is necessary to emphasise on all project authorities that where mechanisation does not lead to significant economies preference must be given to labour—intensive methods of construction. These considerations should be kept firmly in mind at the time of preparing project reports and, wherever machinery is chosen in preference to men, convincing reasons should be given for such a choice. In fact, it is recommended that a standing committee of senior officers should be appointed to examine all such decisions from the employment angle.

20. In areas with heavy pressure of population, where even a large programme of development, such as must be undertaken still leaves a residue of unemployed, substantial numbers of persons should be imparted suitable skills and given opportunities of work in areas where these skills are not locally available in sufficient measures. It is proposed to undertake a few pilot schemes on these lines with a view to evolving the necessary techniques and organisation.

21. Although much has been done in recent years to promote village and small industries, a larger employment potential in this field still remains to be secured. In village and small industries, it is not enough to relate employment benefits to the new developments which are proposed to be -undertaken. Much the greater part of the increase in employment has to be secured by realising the full potential of the existing small enterprises. For small-scale units of the modern variety, frequently the limiting factor is not the demand for the products as their ability to produce the quantities needed. This is specially true of industries requiring raw materials such as iron and steel, non-ferrous metals, yarn, chemicals including dyes, and others. In some cases, the lack of processing and other facilities may be a handicap. Almost everywhere, artisans and small entrepreneurs are not able to secure the credit facilities needed and do not have dependable facilities' for the marketing of goods. Special efforts should, therefore, be made to enable small units (whether run by cooperatives of artisans or by individual entrepreneurs) to attain their maximum production potential.

22. Rural industrialisation and rural electrification are, in fact, connected programmes and are of the greatest importance for the expansion of stable employment opportunities in rural areas. It is necessary to develop centres or nuclei of industrial development in each area and link these with one another through improved transport and other facilities. These centres might be in small towns or in centrally situated villages which are able to attract skills and enterprise and to which power and other facilities could be more readily provided. The Third Plan provides for a large programme of rural electrification. For rural electrification to make the necessary contribution to the growth of production and employment, there is need in each district for forward planning, both in the supply of power and for its utilisation. It is essential that the programme for agricultural and industrial development should be co-ordinated with the supply of power. Greater concentration of activity at selected points would bring about improvements in the load factor.

IV. Utilisation of Rural Manpower

23. The proposal to undertake a comprehensive programme of rural works during the Third Plan, to which a reference has been made earlier, is significant not merely for creating the additional employment opportunities which are required, but even more as an important means for harnessing the large manpower resources available in rural areas for the rapid economic development of the country. During the Third Plan, agricultural production has to increase twice as fast as it did over the past decade. This calls for intensive and concentrated effort involving the participation of millions of families in programmes of agricultural development. For many years the greatest scope for utilising manpower resources in rural areas will lie in programmes of agricultural development, road development projects, village housing and provision of rural amenities. A lasting solution of the problem of under-employment will require not only the universal adoption of scientific agriculture but also the diversification and strengthening of the rural economic structure. Programmes for developing village and small industries, linking up the economy of villages with the growing urban centres, setting up processing industries on a co-operative basis, and carrying new industries into rural areas form part of the Third Plan and have to be further intensified. These programmes will be aided by the spread of rural electrification. While the rural economy is being thus built up, there is need for comprehensive works programmes in all rural areas, and more especially in those in which there is heavy pressure of population on land and considerable unemployment and under-employment.

24. Works programme envisaged for rural areas comprises five categories of works :

  1. Works projects included in the plans of States and local bodies which involve the use of unskilled and semi-skilled labour;
  2. Works undertaken by the community or by the beneficiaries in accordance with the obligations .laid down by law;
  3. Development works towards which local people contribute labour while some measure of assistance is given by Government;
  4. Schemes to enable village communities to build up remunerative assets ; and
  5. Supplementary works programmes to be organised in areas in which there is high incidence of unemployment.

Schemes under categories II, III and IV mentioned above are intended to be undertaken as a vital feature in the normal plans of development in rural areas. They are intended to ensure fuller utilisation of the man-power, and will also provide some, though necessarily limited, wage-employment. Wage-employment on a large scale has to be found in the main through "works falling within categories I and V. Works in these two categories are in fact identical in nature, the main consideration being that category V will include supplementary schemes over and above those in category I. Thus, for the additional programme of rural works envisaged in the Third Plan, two main groups of schemes involving considerable use of unskilled and semi-skilled labour will have to be undertaken namely (a) local works at the block and village level and (b) larger works requiring technical supervision and planning by departments.

25. For local works as well as for the larger schemes it is essential that there should be clearly worked out programmes in each development block. The block plan will include all the works to be undertaken by different agencies through the block organisation such as programmes included in the schematic budget under the community development scheme, and those falling within the general plans of the States under agriculture, animal husbandry and cooperation, programmes for large and medium irrigation projects, road development etc. In turn, the block plan must be split into village plans and, in this form it should be made widely known in the area. For projects like irrigation, soil conservation, road development etc. to provide the maximum employment to the people in each area, it is necessary that they should be carried out in close cooperation with the local block organisation. Since unemployment and under-employment are specially acute during the slack agricultural seasons, to the extent possible, works programmes should be planned for execution during these periods. In all cases of works to be undertaken in villages, wages should be paid at the village rates.

26. Following broadly the lines mentioned above, a scheme of pilot projects for works programmes for utilsing rural manpower has been recently introduced, and 34 pilot projects have been so far taken in hand. The scheme of pilot projects provides for certain supplementary works programmes to be undertaken in addition to agriculture, irrigation, road development and other programmes included in the State plans and the community development programmes. As a rough measure, a provision of Rs. 2 lakhs was suggested for each project for the period ending March, 1962. The pilot projects which have been begun include schemes for irrigation, afforestation, soil conservation, drainage, land reclamation and improvement of communications. The object of this series of pilot projects is to furnish experience in organising works programmes which will make some impact on the problem of unemployment and underemployment,

27. On the basis of the initial experience gained in the pilot projects, it is hoped to extend the programme on a mass scale to other areas, specially to those with heavy pressure of population and chronic under-employment. Tentatively, it is envisaged that employment through the works programmes should be found for about 100,000 persons in the first year, about 400,000 to 500,000 persons in the second year, about a million in the third year, rising to about 2.5 million in the I'ast year of the Plan. Limited financial provision for the early phases of the programme has been made in the Third Plan. It is reckoned that the programme as a whole might entail a total outlay of the order of Rs. 150 crores over the Plan period. As the programme develops, it might be possible to consider ways of paying wages in part in the form of foodgrains. It is proposed that the necessary construction organisations and the labour cooperatives needed, should be built up, specially at the block level. These organisations can carry stocks of tools, obtain contracts, secure the necessary technical and administrative assistance, organise cadres of trained and skilled workers, and work in close cooperation with district authorities, panchayat samitis and others. Voluntary organisations should also be able to provide local leadership and undertake educational and cultural work. To carry out the rural works programmes on the scale suggested above, adequate organisations are to be built up mainly in the States and also, to the extent necessary at the Centre.

V. Educated Unemployed

28. The rapid pace of industrialisation during the last ten years has been accompanied by significant changes in the occupational structure of industrial employment. Industry now recruits persons who would formerly have been absorbed in 'white-collar' employment. Newer industries like iron and steel, chemicals', petroleum refining, general and electrical engineering, rubber tyres, aluminium, etc., are being developed relatively faster than older industries such as cotton textiles, jute and tea. The older industries, in turn, with an eye on meeting competition in the international market, have introduced schemes of rationalisation. Expansion programmes in industries, such as iron and steel, chemicals, etc., involve the application of ihe latest and most efficient production techniques and, consequently, require a more technically qualified group of operatives. Increasing mechanisation in coal mining also requires personnel of a higher calibre than the older type of recruits in that industry. These developments may be expected to lead to larger employment opportunities for the educated. In judging the future prospects for the educated, this changing nature of the industrial scene has to be constantly kept in mind, and also the fact that attitudes to manual work are also undergoing marked change. The educational system will have to be geared to meet the rapidly changing pattern of personnel requirements. Manpower studies have been undertaken in a number of selected fields and arrangements have been made to suitably expand the existing facilities for technical education and to open new institutions, where necessary. It is expected that adequate facilities for practical in-plant training will be available in the wake of the apprenticeship legislation, now under consideration. Programmes of vocational guidance have been developed during the last 5 years, as part of the National Employment Service.

29. With the "expansion of education at the secondary level, greater attention should be given to the absorption of educated persons into gainful employment. The problem of the educated unemployed may be considered in two parts—the backlog and the new entrants. The precise magnitude of the backlog is difficult to ascertain, but on the assumption that a constant proportion of the educated unemployed would have registered at employment exchanges, their total number might be estimated at nearly a million. The number of new entrants who have studied upto the school leaving standard or above, is estimated at about 3 million. Expansion in agriculture, industry and transport will provide a large and increasing demand for persons with skill and vocational or technical training. Reorganisation of the system of education and provision of facilities for technical and vocational education are, therefore, of paramount importance. In recent years, there has been a change in the attitude towards manual work on the part of educated persons, and programmes for orienting them to the requirements of the developing economy can be taken up on a larger scale than was hitherto feasible. A beginning in this direction was made during the Second Plan through the setting up of a number of orientation and training centres, and it is proposed to undertake a more broad-based programme during the Third Plan.

30. A significant proportion of educated persons registered as unemployed have had education ranging from the middle courses in schools to the first or second year at college. Young men belonging to this group cannot find adequate openings in urban areas unless they obtain technical training of some kind or other, and at best they can be absorbed to a limited extent and in relatively low paid occupations. In the immediate future, it is in rural areas and through rural programmes that large employment opportunities for the educated unemployed are likely to become available. Tlie rural works programme will itself make a large demand for persons with education, and it is proposed that as a preparatory step numbers of educated persons should be selected and put through short periods of training for specific jobs of work. The scope for regular and continuous employment within the rural economy will greatly increase with the development of co-operatives for credit, marketing and farming, growth of processing industries, development of scientific agriculture and the establishment of democratic institutions at the district, block and village level. It should also be possible to assist fairly large numbers of young persons with education to set up small industries at rural centres at which power can be made available. As far as possible, these industries should be organised on a co-operative basis, so that fhe necessary financial and technical guidance can be provided and the marketing of products organised. As the rural economy develops and the co-operative sector in it becomes larger, there will be increasing opportunity for employment at levels of income which are comparable in real terms with those available in the towns. Development along these lines has the additional advantage that rural areas will retain the services and the leadership of their own educated youth to a far greater extent than is now possible.

31. A brief reference may be made here to the need for re-deployment of skilled personnel from projects which have been completed or are nearing completion to those on which construction is to commence. It has been observed that irrigation and power projects as well as industrial projects have been obliged at times to retrench experienced labour when the construction programmes were not sufficiently dovetailed to take over labour from one project to another. During the Second Plan, the necessary machinery for this purpose has been created and has functioned satisfactorily. If work on similar projects is better phased and advance planning is undertaken, the size of the problem to be dealt with would be more manageable.

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