Billed as a landmark, the government’s employment and welfare programme is mostly a cocktail of existing schemes with some more doles thrown in. Many experts find the package skewed and skimpy.
After days of tensions within the coalition, when the government announced its much-vaunted Sher-e-Kashmir Employment and Welfare Programme for the Youth (SKEWPY), there was silence. The lull was broken, in Jammu, by chief minister’s right-hand man Devender Singh Rana who drove to his neighbourhood in Nagrota and told a local Self Help Group (SHG) that the policy was a landmark, historic and visionary. In Kashmir, it took a long time till Srinagar Mayor Salman Sagar issued front-page advertisements, paid from state coffers, in praise of the government’s first ‘major’ delivery.
Apart from proposing to generate around 5000 self-employment opportunities in tourism, poultry, dairy and other such sectors each, the SKEWPY offering unemployed a monthly allowance is a major attraction. Under the policy named Voluntary Service Allowance (VSA), all unemployed educated youth having educational qualification of matriculation and above will get a stipend for three years as long as they fall between 28 and 37 years of age and belong to families having an annual income (from all sources) not exceeding Rs 50,000 and/or having not more than 10 kanals of irrigated agriculture land or 20 kanals of un-irrigated land.
The VSA will not be available to spouses of employees, dismissed employees, persons convicted for any offence involving imprisonment for three months or more. Students, trainees, apprentices and the self-employed are also not eligible excepting those getting engaged in self-employment activities/initiatives to whom it will be extended for a year as sustenance support. The VSA will be disbursed by the DECC’s through banks using a biometric system. The beneficiaries will have to work for 12 hours a week on an assignment that DECC will decide. This may include working with Panchayats or urban local bodies.
The scheme is under fire for more than one reason. Many people dislike the idea of introducing VSA when no Indian state has introduced it. They link it to the idea of ‘buying peace’ in a conflict zone and inducing the urge to get a government job. “It is merely the pocket money,” says political scientist Gull M Wani. “By and large, most of this amount will go to the mobile companies or cigarette manufacturers,” adds Shakeel Ahmad, a keen Kashmir watcher.
Shakeel Qalander says VSA should have been linked to vocational training and the amount could have been made more honourable and paid during the period of training or waiting till absorbed by the industry or government. “What is the harm if the unemployed doctors are asked to work with the local hospital for a day and a B Ed to go to the school for a couple of days in lieu of the allowance,” he says insisting that the vagueness in the policy could make it exploitative by the politicians.
VSA is not open to all the unemployed. It is targeted at the poorest thus making it a social welfare scheme. Quite a few people in J&K will fall under this category if the planning commission assessments are taken into consideration. Central government agencies put the BPL percentage at slightly over four per cent but the state government sees it as 22 per cent. A recent study based on daily intake has made J&K the richest state in India where only 5 out of every 100 are officially poor.
Since quite a few people will fall under VAS, there are chances of the policy breeding corruption. Now, fake documents will be prepared at a premium by agents and officials to make youth eligible to pocket money.
“It is a western concept but if the government wants to get some work from the beneficiaries then the idea is to give an impression that they have some kind of employment. In that case, the rule of minimum wages has to be upheld,” says political commentator Sheikh Showkat Hussain. The scheme, he believes, looks like the regimentalization that was a hallmark of communist societies in which the beneficiaries could be asked to be the audience for a politician as well. Adds Wani: “It seems to be barely a short term measure. The government will have to come up with a proper policy.”
The SKEWPY that many believe is not only skewed but also skimpy, is a grand cocktail of a number of existing programmes, mostly funded by the central government and some new initiatives.
The major decision that Finance Minister Abdul Rahim Rather had announced in his mid-year budget speech of upgrading the district employment exchanges into full-fledged centres for counselling is part of the SKEWPY.
Now in all 22 districts, each District Employment and Counselling Centres (DECC) will operate from 2240 square feet premises and their prevailing number of 18 staffers will go up “to suit to the requirements of a modern, business-like, dynamic organization”. The centres will be linked with all the recruiting and skill development agencies and would have all the basic information about all the jobs that the market seeks besides a library, kiosks, auditorium and other facilities. Registrations would take place online and over the years a credible data bank would emerge. DECCs would dovetail the efforts with Reserve Bank of India (RBI) planned Credit Counselling Centres as well. Right now the state government has data about 447653 unemployed but does not know how many of them are employed in the private or public sector.
The policy has also reorganized the employment department that will now work under Employment Facilitating Agency that in turn will have a governing board with the chief secretary at its top. By and large, it will be policy formulating coterie that will govern the conduct of DECCs besides overseeing the implementation of various institutions.
“It is good that government is trying to be a facilitator and they have already upgraded the employment exchanges,” says Sanjay Puri, a trade chieftain in Jammu. “Let the government decontrol its regulations and controls, and push growth in the economy rather than helping the government to grow big. It will automatically throw up jobs.”
SKEMPY is aiming at getting some kind of livelihood for around half a million people. But direct government employments would be around 100 thousand in the remaining five years of the ruling coalition. J&K is one of the few Indian states that have a narrow resource base but high establishment costs – around 40 per cent of the total yearly spending goes as salaries, wages and pensions.
Right now the state government has 385,265 employees on its rolls including just under one lakh cops. Officials say the target of absorbing one lakh people in the next five years is not impossible. Of the 20,601 non-gazetted vacancies, 9188 are already filled up. Against 4240 gazetted vacancies 705 have been appointed and against 6871 class-IV (lowest level) jobs 1845 are already filled up. Out of 44,234 Rehbar-e-Taleem’s, the government has already regularized 24,581.
But how will the government manage to absorb such a huge number. “On an average 4500 employees retire a year and around 6500 new creations,” a senior officer said. “Since we require absorbing 20,000 people a year, it is possible as there is a lot of expansion in the pipeline in health and education sectors. It is possible and practicable.” The police is expanding quite fast. It has already crossed one lakh if the special police officers, and village defence committee members are taken into account. Strengthening police force is part of the already initiated process of thinning down the deployments of the army and various paramilitaries.
For most of the livelihoods that the SKEWPY intends to help people create for themselves fall under various self employments initiatives. It is on this front that the policy has unintelligently tried to repackage the existing programmes and sell it afresh. Industrial Training Institutes (ITIs) are supposed to be in the forefront of massive skill imparting initiatives.
The policy wants the ITI network to train 8000 youth every year in addition to what it is already doing.
The ITIs are also supposed to play its part in skill development of 200,000 youth in next five years along with state run Entrepreneurship Development Institute (EDI), an existing chain of handicraft and handloom development centres, and the yet to be set up Rural Self Employment Training Institutes. Director Technical Education M Shafi Rather told Kashmir Life that there are 49 ITI’s and 14 polytechnics and 18 more polytechnics are being set up. “We will do it, quite easily,” he said.
But insiders tell a different story. “The 18 polytechnics that are to be set up have nothing to with the package,” a senior officer in the Technical Education department said. “It might sound politically correct but the fact is the politics is delaying their implementation. For vote bank considerations, every politician wants to take a polytechnic home and we have been asked to identify land at three places for each new polytechnic. Had the department been permitted to approve the most feasible site, some of these new institutions might have already come up.”
“Ninety per cent of the pass-outs from polytechnics do find jobs within and outside Kashmir mostly in automobile and construction sectors. Some of them fly abroad and make a decent living,” the senior technical education officer said. The total pass-outs from six state-run and eight privately owned polytechnics is around 2500 and increasing their capacity would entail good investments on a war footing. The new 18 ITIs (the central government is releasing Rs 12.30 crore for each), would add up to 180 seats each.
The dark horses of technical training in India, (49 in J&K) ITI’s offer a varied set of trades, many of which have lost appeal among youth.
Off late, the central government involved industry under public-private partnership (PPP) by making an industry chieftain head of the institute management committee. The aim was to impart training to the youth in trades that the industry required. Twenty-one ITIs in the state are headed by an industrialist and are called “centres of excellence”. Such ITIs are eligible to receive special funds for upgrade and these 21 centres have so far received Rs 67.50 crore.
“It is a good scheme and the flexibility that the policy offers to seek direct funds will really help these institutions,” says Afaq A Qadri, an industrialist who heads one such ITI. “But the problem is that bureaucracy and the institutional (ITI) management think that their authority and power is eroded so they create problems,” Qadri said that most of the ITI’s look like ghost houses with most of them lacking even bathrooms and toilets.
Anil Suri, an industrialist from Jammu has been on the central advisory board of technical education. “The policy is good but its implementation has not been so successful,” Suri says. “The syllabus needs changes as per industry requirement and then we need a larger programme to train the trainers.”
He says there has been no follow up as the board has not met for the last 18 months.
The government might have only one female in the council of ministers but the policy is not unfair to women. The policy envisages creating 5000 Self Help Groups involving as many as 50,000 women in the next five years and the training would be imparted by the Women Development Corporation (WDC).
Set up in 1991, the WDC started functioning in 1994. It raises loans from National Minority Development & Finance Corporation (NMDFC), National Backward Classes Finance & Development Corporation (NBCFDC), National Handicapped Finance and Development Corporation (NHFDC) to fund various livelihood ventures of women. “We have created certain model clusters and we have received orders for supplying jute bags by Shri Mata Vaishno Devi Shrine Board (SMVDSB) and more recently by the Shri Amarnathji Shrine Board (SASB),” says Managing Director Ms Naheed Soz.
Despite the turmoil, the progress has not been so bad. By now its authorized share capital is paid to the tune of five crore rupees and has recently been hiked to Rs 10 crore. “I do not have the exact idea but I believe the corporation has so far disbursed Rs 29 crores among 70000 entrepreneurs,” says Ms Soz. “Most of this loan money, around Rs 27 crores have come from NMDFC alone.” Earlier, the loans were mostly in default but now, say in last quarter, we are recovering around 90-95 per cent. “We have filed court cases in as many as 500 defaults and their guarantors (usually government employees) besides issuing no demand certificates (NDCs) in 305 cases,” said one of her aides at the corporation.
With full speed, the WDC is trying to do its best. It has disbursed over 20 crore rupees among 4054 persons since 2004.
Now, this corporation is tasked to produce 10,000 female entrepreneurs in one year. It might be possible after it has enough of resources and skilled and managerial manpower. Right now it has 22 staffers, of which, management says “six need not be counted”. For recovering the default it hires and fires ‘recovery agents’ that take home Rs 1500 a month.
The focus of the policy is on the Entrepreneurship Development Institute, a society registered in 1997 that started working in 2004 with an avowed objective of developing entrepreneurship and entrepreneurial culture through a varied set of activities. Its slogan of offering training, help in the registration of units and managing funding for it and finally guiding in forwarding linkages with the market helped it to acquire an impressive profile. Though supposed to work in diverse fields, it chose to start with its initiatives in commercial floriculture, medicinal and aromatic plants and information technology.
Despite birth pangs and a few setbacks, EDI’s take-off has not been bad. To its credit is establishing as many as 1292 units besides training 4130 potential entrepreneurs of other agencies for 97 programmes in the last six years. “From amongst the people we trained, hardly 200 have started their ventures with the main problem being a capital requirement,” says EDI director Dr M I Parray.
Now SKEWPY wants EDI to help in upgrading the skills of a major portion of 200 thousand youth besides creating 5000 enterprises with everyone having not less than 10 members – a total of 50,000 youth in the next five years. EDI right now has 56 positions in all streams against which only 34 are filled up.
But the EDI is not in news for its potential to train a huge army of entrepreneurs. It is the Rs 50 crores Entrepreneurship Development Fund that the SKEWPY is entrusting to it that will go up to Rs 100 crores next fiscal. Prospective entrepreneurs under the scheme would get non-refundable seed capital equivalent to 35 per cent of the project cost up to a maximum of Rs 300 thousand for undergraduates and half a million rupees for post-graduates and Rs 750 thousand for technically qualified persons such as engineers, doctors and computer science & technology graduates. For group initiatives, the ‘seed money’ will go up.
EDI had already signed an agreement with the J&K Bank to fund its initiatives. Now the government will sign a fresh agreement making J&K Bank the debt syndicator. It will not seek any collateral for a loan up to five lakh rupees and the interest would be at 9 percent.
Industry leaders like Shakeel Qalander are unhappy with the seed money proposition.
“This will not only induce the subsidy culture that was the hallmark of the 1970’s and 1980’s but will force a destabilization on the entire industry,” Qalander says. “On one hand you have an entrepreneur who has raised debts on market rates and invested his own resources and to compete him you are creating an entrepreneur with government money – where is the level playing field especially when the industry in Kashmir has survived 1800 days of curfews that nobody is interested to talk about in the government and thousands of units have turned sick and there is no penny to revive them.”
He believes the officials and the unscrupulous elements will use this fund to hurt the industry. “The best option is to convert the seed money into a venture capital that the beneficiary will have to return in easy installments once he or she stands up.”
Helping revive the sick units on pure market lending, he says, would offer livelihood to more people than the SKEWPY envisages. “The fact of the matter is that some units that we helped revive are facing problems as the government has more authoritative and exploitative regulators than industry promoters,” he insisted.
Largesse has never helped any industrial activity. The better way is to assimilate these concessions and make it part of the existing state-sponsored schemes not yielding desired results. State’s own J&K Self Employment Scheme (JKSES) would have been the best way out, the industry believes.
SKEWPY does talk about sponsored schemes and aims at re-designing some of them to cover about 30,000 youth every year for the next five years. Easier said than done. Right now, there are five sponsored schemes – four funded by the central government and one by the state government. All these schemes are being sent by various industry promotion agencies to banks for sponsorship. All have in-built subsidy mechanisms.
In last eight years starting 2001-02, the data accessed by Kashmir Life, revealed that the banks had set the target to sponsor 2,21,986 projects under Prime Minister’s Rozgar Yojna (now Prime Minister’s Employment Guarantee Programme), SGSY, SJSRY, JKSES, SC/ST/OBC and KVIC that would require disbursement of a whopping sum of Rs 1902 crores. The reality is that banks actually funded only 95,886 proposals involving Rs 804 crores.
That reflects the conduct of the system’s different tiers especially those involving the industry promotion. “Banks are flush with funds and right now there is the problem of off-take,” a senior executive in a nationalized bank said. “But sponsored schemes are a segment that most of the banks are reluctant to fund because more than half of it goes in default.”
A middle rung official in the lead bank said the cases come to them after a prolonged period of processing. “By that time the entrepreneur has invested substantial sum and raised local loans to manage himself. Once the disbursement comes, the cuts and the repayment of loans makes the project unviable,” he said. “In most of the cases, the loan amount is far less than the project requires.” He said the state government may not be able to alter the size of the loan in schemes of the central government but it has the easiest option to review and reorganize the JKSES. To cut the red tape, the banks had many times sought a direct role in identifying the prospective entrepreneur (most of them have funded the EDI as part of this programme) and some help in recovering the loans but the bureaucracy’s decision not to share its authority with the bankers has led to fall in sponsoring the cases. Banks wanting a direct role in identifying the cases is to avoid the political and bureaucratic interferences in identifying the right person for the right job.
The larger issue for the government is to manage resources for funding the SKEWPY. The policy says that it would require Rs 250 crores on VAS and additional Rs 50 crores for Entrepreneur Development Fund. But Finance Minister Abdul Rahim Rather told recently that the historic decision would require Rs 300 to 400 crore annually. Wherefrom will the government manage the huge amount is a million-dollar question. The general impression is that the government will go to the centre seeking help but chief minister Omar Abdullah has not ruled out the possibility of levying a tax.
“It is just a beginning,” Chief Minister Omar Abdullah told reporters after he made the policy public at Jammu. “It is open to suggestions and modifications that suit the youth.” It is this sentence that offers his government a saving grace. Let the process of upgrading the basic draft begin so that it becomes a cocktail of good politics and policymaking.