Where Have All The Jobs Gone?

Unionists have attributed militancy and unrest to the massive unemployment in J&K. Creating more jobs continues to be the thrust area in the government and the public sector. Kashmir Life examines the jobs market in a peaceful 2011.

Police recruitmnet rallyRegistration by the apparently unemployed at the re-designated District Employment and Counseling Centers operating across J&K is the policy maker’s final reference to a surging unemployment in the state. As certain incentives were linked to the registrations, numbers surged quickly from 300 thousands to over half a million in almost a year. Unemployment is a reality in Kashmir that has limitation of resources, weather conditions and absence of vibrant private and public sector.

Routinely, authorities and political parties have been linking unemployment with the rise of militancy. More recently when Kashmir remained in turmoil for three consecutive summers, unemployment was again projected as an issue. There are a number of policies and programs that are aimed at alleviating the status of people and to offer them opportunities to earn better. But a salaried job continues to be the major attraction for the young and jobless.

J&K government continues to be the major employer in the state. But over the years, it has appointed nearly half a million people that has become a major money guzzler for the public kitty. See how it is bleeding the state government?

For the current fiscal, J&K would be spending Rs 31212 crores, more than 8.63 percent than 2010-11 and a whopping 73 percent of it is the revenue expenditure leaving barely 27 percent for the development. While the wage bill of the state employees would devour Rs 15916 crores, pensions would require another Rs 2651 crores and red PSUs would require grant in aid of Rs 727 crores that eventually gets consumed as salary.

But governments’ can not stop appointing people because ten thousand employees retire from services every year and new schemes are introduced that require additional manpower. It continues to stay as the model employer.

So how many people wee appointed by the government this year? Highly placed government sources informed Kashmir Life that the Public Service Commission that takes care of all the gazetted services has actually made a total of 1462 selections in 2011, so far. As it has conducted most of the interviews that were assigned to it, the PSC chairman is not inclined to have more members to the commission. He sees the services if existing members are currently under-utilized.

State Subordinate Board that recruits non-gazetted cadres to the state government remained too busy for the last few years. “We have made a lot of selections but lists in number of cases have actually gone into litigation so the final tally will be available a bit later,” a senior functionary of the SSB told Kashmir Life. But the government sources revealed that the Board has made 1920 selections so far.

Since the class IV jobs are being managed by the departmental heads directly, no credible figure is available. A senior officer in the General Administration Department said the government hired 3530 persons as class IV in the state since 2009.

Security Agencies
The security apparatus in the state is emerging as a major employer because the situation always triggers a demand. J&K Police, despite being an appendage of the government is a major recruiter. This summer it even opted for on spot recruitments in Srinagar city, a practice that was traditionally reserved for the remote belts and appointed lot many youngsters. By the middle of December, the police said the Police Recruitment Board had already appointed 6644 people across the state. “We may add another 300 within the last few days Of the year,” a senior officer said.

But police is not the only agency that recruits youth. Central paramilitary forces like CRPF, BSF, SSB, ITBP and even the army are now recruiting residents of J&K. To some of them, it is just a contribution to the crisis management.

Banking Sector
Over the years, the banks operating across the state are emerging as vital opportunity providers for jobs seekers as well as as entrepreneurs. J&K Bank, the leader in the sector finally decided to have a new flock to man it’s expansions.  “Initially the idea was to take around 800 but then we re-assessed our requirement in wake of our expansion plans so we increased the requirement to well over 1500,” a senior official of the bank said. “Financial inclusion, new branch network and routine expansion in branches may create new opportunities in coming days.”

But J&K Bank’s employment drive is usually adding to the problems of other contemporaries. Youngsters leave their organizations and join the bank and it happened this year as well. Grameen Bank that had appointed 48 officers and 159 clerks this summer had some of these new faces actually deserting it. The bank had to open the waiting list of its last recruitment drive to fill these positions as soon as possible.

This year the HDFC Bank took a lot of new young men and women on it’s rolls as it started implementing it’s expansion plans.  “This year we have already taken 350 youth, mostly management grads, on rolls as we opened ten new he’s,” Zubair Iqbal, now vice president of the HDFC Bank in-charge of upgraded J&K cluster now called circle, said. “We are opening ten more branches each in January and Mach so many more people will join us.”

Nationalized banks did not offer any job in the state. This is despite the massive shortage of manpower they are facing for last many years. In certain cases, they are reinforcing their operations by getting part of the migrant staff back to Srinagar and paving way for them by pushing the existing staff to the periphery. Private sector Axis Bank is understood to have created around 20 jobs in the state this year.

Insurance Sector
One of the fastest growing sectors across India, insurance is offering one of the best options for the youth to have two jobs because in most of the cases agents do another full time job as well. Along side the big brother of insurance, the Life Insurance Corporation of India, there are around 14 other players in the private sector and almost every one of them is doing well.

Besides, the four major non-life insurers that central government owns, there are a number of private sector players. By and large, most of them were content with the staff position but the recruit by banks did create lot many vacancies forcing an appetite for new faces. The exact status of the market conditions would be available at the end of the financial year.

However, data available with Kashmir Life suggest that in 2009-10, all the insurance companies put together had managed 312365 policies with a cumulative premium of Rs 592.89 crores of which Rs 322.80 crores were taken by LIC alone for 208416 policies. In the private sector it was the MetLife that is the leader. The entire sector was managed by a staff of 20986 individuals. Interestingly, LIC despite being the leader had only 7154 officials and agents. Authorities may require interventions at some level to make the LIC engage more people.

A number of companies did offload part of the staff at the peak of 2010 unrest. Once the situation normalized, part of that staff actually was taken back by the market and in certain cases fresh recruitments were made. Tourism offered a major opportunity this year because influx was too huge. The shrine at Vaishno Devi shrine already has crossed the psychological barrier of one crores pilgrims.

Ladakh has already been visited by more than eighty thousand high spending tourists creating a situation that eighty percent of Leh economy is now driven by the tourism. Kashmir got more than 13 lakh tourists in addition to 638 thousands pilgrims to the Amarnath shrine.

“There might not have a huge increase in salaries jobs but we genuinely believe the sector made lot of money,” Director Tourism Farooq Ahmad Shah said. “By an average every houseboat offers a minimum of two jobs and in hotels there was a surge in requirement of workers.” Shah said the people hawking handicrafts are fully revived and part of the business that had shifted bases outside Kashmir felt encouraged to return back.

At the peak of 2010 unrest, a central government committee came out with the policy envisaging identifying the school drop outs, train them in the fields they are interested in and deploy them in the private sector with adequate follow up. The Rs 235 crores Skill, Empowerment and Employment (SEE) scheme, now renamed Hiamayat (support) has already trained and deployed 1059 boys and girls from across J&K.

The scheme aimed at creating 100 thousand jobs in five years engages project implement agencies (PIA) who get Rs 23000 per head for identifying, training and finally placing a candidate in the market. So far, two PIAs are working across J&K. ILFS Skill School and Don Basco Technology Institute J&K have signed contracts for creating 23000 and 15000 livelihood jobs, respectively. The first major batch was given the job letters on December 18 at a huge function in the University of Kashmir with Rural Development Minister Jairam Ramesh in chair.

In its eight training centers, IL&FS has so far trained 652 candidates. By now, it has placed 435 candidates with various retail companies, 365 outside the state. Those deployed outside the state include 50 females. While 46% of them have gone to Chandigarh in the BPO sector, 30% were taken by the CCD. Don Bosco has trained 758 candidates – 322 from Jammu and 436 from Kashmir – and 509 have already got their job letters. Only 157 of them have been placed outside J&K as local market in Kashmir adjusted 247 of these skilled youth. Interestingly, 358 of them are Hindu, 14 are Sikhs and the rest are Muslims. The two PIAs placed the trained young boys and girls in hospitality sector, BPOs, and retail.

Jairam said the pace of trainings and placements will go up as new PIAs will join. His ministry is negotiating with six to eight new companies and he hopes they would be able to start their work by January. Dr Reddy’s Foundation, Techno Pak and Hero Mind Man are the new probable entrants. The scheme has another ingredient in which the well read lot will be taken care of by major companies who would fly them out, train them and place with them. This part of the scheme will take care of 40 thousand graduates and post-graduates from the Universities and various professional and technical institutions and has been named as Udaan (the flight).

Self Employment
Given the limitations of public and private sector in holding a lot of population on its rolls, there has been an emphasis on self employment. While banks have been doing it for decades, the red-tapism at official levels and small ticket size has rarely helped trigger the change that it was aimed at. Even banks are reluctant in sponsoring these schemes because of massive default and inability to hit the target. In the first half of the year ending September 2011, the entire banking sector has barely dispensed Rs 75.11 crores under SGSY, PMEGP, JKSES, SJSRY and SC/ST/OBC schemes operational in the state.

Seed Capital Fund Scheme
The failure at the banking levels forced government to draft the Seed Capital Fund Scheme under which State’s Entrepreneurship Development Institute (EDI) is identifying the youth and training them in different disciplines. They get DPRs of their projects from the EDI and the government offers non-refundable Seed Money of 35% of the project cost to the maximum limit of Rs 3 lacs for under graduate / graduate, Rs 5 lacs for post graduate and Rs 7.5 lacs for doctors, engineers, MBA’s . The remaining 65% of the project cost is provided by the J&K Bank as loan at 9% interest per annum and a moratorium of two years.

A lot of funds are available with the EDI but the pictures is not so rosy. Though bank is funding the project but there is reluctance because free money actually creates problems in new initiatives. Since the launch of the scheme, EDI has trained 2766 candidates, and drafted DPRs in 1392 enterprises for 1470 entrepreneurs that have gone to the bank. So far, 902 cases have been cleared by the all powerful steering committee. EDI has released seed capital to the tune of Rs 23.29 crores in case of 691 enterprises.

By now, there are only 615 enterprises involving 646 individuals in whose case the banks has released the funds and the EDI has released the seed money. They are supposed to be at various stages of implementation. By an average, says Director EDI Dr M I Parray, every single unit that we fund creates opportunities for five jobs. The scheme is expected to undergo a relook very soon.

Minority Funding Scheme
It is a corpus operated by the national minority development corporation. For the doubly BPL population (yearly income of Rs 40000 in rural and Rs 55000 in urban areas), the NMDFC offers term loans at six percent of simple interest. Under the scheme, the applicant can opt for any activity under the earth as long as it is within a fixed ceiling of fund requirement usually not more than five lakh rupees. Of the project cost, NMDFC funds 85% of the project cost, 10% comes from the state government and the remaining 5% is the contribution of the applicant.

“We have disbursed Rs 6.14 crores under this scheme to 280 individuals since April 2011 when we launched it,” Dr Parray who implements the program said. “There is huge demand and it might surprise you that there is not even zero default.” Women’s’ Development Corporation is also accessing the NMDFC funds for creating women enterprises and it is also doing well. However, the problem that EDI and WDC are apparently facing is that they are not getting the government guarantee that would have enabled them to access huge low cost NMDFC funds. The requirement for the guarantee could be between Rs 15 to Rs 30 crores in a year given the demand for the product at gross root level. At EDI, 300 cases are awaiting disbursement right now.


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