Employment growth reducing poverty in India: ILO

Wednesday, 08 December 2004, 20:30 IST
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NEW DELHI:Production growth is creating jobs and reducing poverty in India even as nearly 1.4 billion people, or half the world's workers, are trapped in grinding poverty, says a new International Labour Organisation (ILO) study. "The Indian experience can be taken as a good example of the fact that growth in productivity usually goes hand in hand with growth in employment as well as poverty reduction," states the ILO World Employment Report 2004-05 released here Wednesday. The service sector in India has seen impressive improvements in productivity and employment. The agricultural sector has witnessed the smallest improvement in productivity but greater employment growth than the industrial sector. The report points out that India's industrial sector had the highest improvement in productivity "but, as is often the case in this sector, at the cost of very little improvement in employment". Wages in the manufacturing sector have declined over the past two decades. "Overall, the shares of agricultural and industrial employment in total employment have been decreasing, whereas the share of service sector employment has risen," the report says. The report breaks new ground analysing the links between employment, productivity and poverty reduction. In 2003, productivity growth in South Asia was 37.9 percent higher than in 1993. "These trends indicate that besides East Asia no other region in the world has been as successful in terms of increasing productivity as South Asia." Whereas Pakistan, Bangladesh and Sri Lanka have managed to improve productivity only slightly since 1993, India has managed to increase the output produced per person employed by almost 40 percent within the same period. Only in the agriculture sector, India's productivity growth has been found lagging since 1990s compared to Pakistan and Sri Lanka, the report says. In South Asia, unemployment and employment-to-population ratios have not changed considerably over the past 10 years despite solid GDP growth rates of over five percent, it points out. Unemployment rates are just below five percent and employment-to-population ratios are 57 percent, the same level as 1993. "Focusing economic policies on creating decent and productive employment opportunities is vital for reducing global poverty as called for in the Millennium Development Goals (MDGs)," says the study. Only Southeast Asia, South Asia, the transition economies and the Middle East and North Africa are currently on track to meet the goal, feels ILO. "For the latter two regions, this is the result of the low levels of extreme working poverty," the report states. Globally, in 2003, while some 2.8 billion people were employed, more than ever before, "nearly 1.4 billion of them - the highest number ever - are living on less than the equivalent of $2 a day and some 550 million are living below the $1 a day poverty line," the report states. "The key to reducing the number of working poor is creating decent and productive employment opportunities and promoting a fairer globalisation as strategies for poverty reduction," says ILO Director-General Juan Somavia. "It is not only the absence of work that is the source of poverty, but the less productive nature of that work. Productivity growth, after all, is the engine of the economic growth that enables working men and women to earn enough to lift themselves out of poverty."
Source: IANS