The narrow lanes leading to the employment exchange in Ghaziabad have never been so busy, not even when there was employment to offer. While the new government in Uttar Pradesh doesn't have jobs to provide, its poll promise of an unemployment allowance of Rs 1,000 is helping long-ignored employment exchanges in the state rediscover their charm.
"I am not very short of money, but if you are getting Rs 1,000 sitting at home, why not?" says Mina, 40, waiting in queue to submit her application for unemployment allowance. In the long queue dominated by women, few are seeking employment. "Earlier, we were getting 50 applications a day, mostly from people seeking employment. Since the last week, there are 1,200-1,500 people registering with us daily. Almost all of them are coming for the unemployment allowance," says Athar Ali, district employment officer at Ghaziabad's employment exchange. "Very few register for employment, since there are no vacancies."
Fall from grace
The irony is an institution developed to provide employment has become a facilitator of unemployment, exemplifying the deteriorating role of employment exchanges in the country. However, the case of Uttar Pradesh is not unique. A look at the data on the status of employment exchanges across the country shows how these institutions have been ignored by successive governments. Between 2000 and 2009, when the country generated large number of employment opportunities, only 11 exchanges were added. In this scenario, a network of 969 employment exchanges is left untapped, even as industry complains of shortage of manpower to fuel growth. In 2009, there were 39.1 million candidates at employment exchanges.
Placements provided through employment exchanges also fell by 16 per cent in 2009. Employment exchanges gave placements to 261,000 candidates in 2009, compared to 304,000 candidates in 2008. A substantial portion of these jobs, however, came from Gujarat, which accounted for 154,000 placements. Gujarat, which had 41 employment exchanges in 2009, was followed by Maharashtra (24,000 placements) and Tamil Nadu (16,000).
However, if the placement record of the top three states - Gujarat, Maharashtra and Tamil Nadu - is analysed, it reveals 122 employment exchanges in these states accounted for 75 per cent of the total placements made in the country.
Established in 1945, employment exchanges were first used to resettle demobilised defence service personnel and discharged war workers in civil life, following the end of the World War II. After Independence, these exchanges began providing employment to displaced persons from Pakistan. The same year, however, the scope of employment exchanges was substantially increased, when their services were extended to cover unemployment services in all categories.
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At present, their primary objective is to provide settlement of job seekers through regular jobs or self-employment. Apart from providing jobs, they are also required to collect employment market information, and provide career counselling and vocational guidance to those who come seeking for jobs. Public sector establishments and private companies are mandated under the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, to notify with employment exchanges, if they are employing 25 or more workers.
A major blow to the future of employment exchanges came in 1996, when the Supreme Court ruled that public and private companies didn't have to approach employment exchanges if they ensured that the vacancies were well publicised. The directorate general of employment & training (DGET) of the ministry of labour and employment is frank in its admission. "Employment exchanges are left with only stray cases, that too at the lower levels of appointment. Therefore, in the placement side, the role of employment exchanges is definitely going to be not very significant," the DGET says on its website.
What job exchanges need?
In 2009, Bangalore-based staffing company TeamLease approached the Karnataka government with a proposal to set up an employment exchange on public-private partnership (PPP). TeamLease invested Rs 75 lakh to Rs 1 crore in infrastructure and in July 2010, the first PPP employment exchange was set up as the Karnataka Employment Centre (KEC), which ran pilot projects in two districts - Bijapur and Mangalore. In six months, TeamLease claimed they were able to place more than 400 candidates.
Unlike in government-run employment exchanges, TeamLease says it ensured the focus was shifted from 'just providing employment to employability'. So, anyone who wanted a job, could call the KEC call centre, where the candidate's basic abilities were assessed. On the basis of the candidate's education and skills, he was called for a more advanced one-hour assessment at the centre. He was then given feedback, based on his knowledge, skills, aptitude and behaviour. Based on the results of these tests, the candidate received a call within 72 hours with a suitable job option. All those whose skills were not found to be up-to-the-mark were given the option to register with the centre for skill improvement.
The Planning Commission's approach paper to the 12th five-year plan also recommended the promotion of public-private partnership in employment exchanges. The approach paper says in employment exchanges, "There is a need for removal of entry-barriers to private participation, while putting in place an effective regulatory framework for coordinating the network of private players, as also for monitoring, evaluating and analysing outcomes of various programmes."
Manish Sabharwal, chairman of TeamLease, says the government would make a big mistake, if it began ignoring employment exchanges.
"Instead of shutting them down, the government should reorganise them into career centres," Sabharwal says. According to Sabharwal, government-run employment exchanges should shift their focus from providing employment to building abilities of candidates on employability. "Employment exchanges should be focusing on five key aspects which they aren't doing now - assessment, counselling, training, apprenticeship and employment."
The Planning Commission's 12th five-year plan says the labour force in India is expected to increase by 32 per cent over the next 20 years. A major portion of this labour force can be tapped through the 969 employment exchanges in the country. If tapped successfully, these institutions have the potential of solving India's labour woes.