Stop doles, provide jobs instead

G.S. Vijay Kumar By G.S. Vijay Kumar, 4th May 2012 | Follow this author | RSS Feed
Posted in Wikinut>Writing>Columns & Opinions

The unemployment allowance, announced by the Samajwadi Party as per its election manifesto, is likely to cost around Rs. 1000 crores to the Uttar Pradesh State government but the intangible cost could be many times over in the long run.

Akhilesh, Stop doles, provide jobs instead

The unemployment allowance, announced by the Samajwadi Party as per its election manifesto, is likely to cost around Rs. 1000 crores to the Uttar Pradesh State government but the intangible cost could be many times over in the long run.
Now that the results to the Uttar Pradesh Assembly election have been declared and the state’s youngest Chief Minister Akhilesh Yadav sworn in, it is time for introspection.
Samajwadi Party, as part of the election manifesto, had promised an unemployment allowance of Rs 1000 per month to the state’s unemployed youths. As a result, the employment exchanges across the state of Uttar Pradesh suddenly seem to be brimming with life. People have started registering their names with the employment exchanges amidst long queues in order to get the benefit of the scheme. The scheme, if implemented, is likely to cost around Rs. 1000 crores to the state government but the intangible cost could be many times over in the long run.
Unemployment allowance, although may appeal to the youth, is a retrograde step in the long run as this will be a great deterrent to employment. Many of the unemployed youths will collect the allowance and not work at all. Why should anybody work when some basic amount is available for doing nothing? Such unemployment allowances significantly encourage unemployment by discouraging workers from finding and taking jobs. Besides, such free allowances will create a large group of youths who will do no work and take part in idle gossip and finally over a period of time become unemployable. The latter, as and when it happens, will lead to frustration among the youths and possibly contribute to social evils. Therefore, in effect, we are unintentionally and unknowingly creating liabilities for the future by opting for such populist measures.
Having announced the scheme in the manifesto, the government would like to fulfill its promise. However, Akhilesh should make it clear to the recipients that this allowance is purely a short term arrangement and not a long term one. They should be clearly told that this allowance will be available for a period of 6 months or so within which they will have to find employment. Alternatively, the government should provide jobs to the unemployed youths by setting up industries and increased investment in infrastructure.
Besides, disbursement of such allowance sets a dangerous precedent as more and more politicians will take recourse to such grandiose announcements. It may be good political manoeuvre but very bad economics. Instead of making such promises, it would be more prudent to create jobs for the people and invest in infrastructure building which will go a long way for the overall development of the state as well as its people on a longer term basis.
The new government should invest in infrastructure and provide necessary incentives and motivate industrialists to invest in the state. This will create jobs for the people of the state and automatically help in the growth of the state GDP.
It is unfortunate that many of our political leaders economise on thinking when it comes to adopting populist measures. They do not seem to spend enough time in understanding the merits and de-merits of a scheme, particularly in the long run, before implementing them. The whole country is aware of many such decisions taken by Ministers and top notch politicians purely to suit their short term requirements and appeal to their political constituency. Such decisions have hurt us immensely and would continue to hurt us in the future too.
Many countries across the globe have schemes for the unemployed. But numerous studies from economists, from either sides of the political divide, support the theory that “unemployment benefits actually discourage people from finding jobs”.
There is a famous Chinese proverb which says “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” Taking a cue from this, the government should create employment opportunities for its youths rather than providing such allowances.

G.S.Vijay Kumar is a senior corporate executive and a columnist.


Tags

Akhilesh Yadav, Chief Minister, Doles, Government, Mulayam Singh Yadav, Politics, Samajwadi Party, Unemployed Graduates, Unemployment, Unemployment Allowance, Uttar Pradesh

Meet the author

author avatar G.S. Vijay Kumar
I am a management graduate and have worked as a senior executive for 25 years in the corporate sector.I am a columnist and write on management, Economics and socio-economic topics.

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