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 Privatisation
 
Privatise employment exchanges
Business Standard, India Friday, June 25, 2010


The Government employment exchanges in India are a big failure when you compare it even to mid-run private placement agencies. Moreover, these exchanges spend huge amounts of money on placements.The state should go in for privatization of employment exchanges, writes Shyamal Majumdar in Business Standard.

Is there a case for privatising India’s employment exchanges? The answer should be obvious even though the government continues to be in a denial mode.

Take the Delhi Employment Exchange, one of the biggest exchanges in the country with a network of nine district exchanges and five zonal offices. But the success rate of the exchange is a low 0.5 per cent, compared to an average 15 per cent of even a mid-rung private placement agency.

It’s difficult to get data on expenditure of employment exchanges, or on what it costs the budget to get people jobs, but back-of-the-envelope calculations with the state budget suggest that it costs the Delhi government (and, therefore, citizens) Rs 2.28 lakh for a single placement.

... ... ...


Apart from the typical problems associated with the work ethics of government babus, the TeamLease report gives many reasons why India’s employment exchanges have proved to be defunct. The mandatory Employment Exchanges Act of 1959, applicable to public and private sector units (excluding agriculture) that employ more than 25 people, is not as compulsory as one may think. For the private sector, the mandatory requirement only applies below a threshold level of wages and these have not been revised for years. Whatever the law may say de jure, there is nothing mandatory about employment exchanges de facto.

...

So far, no state has had the courage to go in for privatisation of employment exchanges despite an Administrative Reforms Commission recommendation in 2002 that employment exchanges be downsized. However, the encouraging sign is that some states have experimented with allowing private placement agencies to get into the picture.

...

Predictably, the lead in this regard has been taken by the Gujarat government. A Gujarat government official says public-private partnerships are the best way forward as the state at one point had over 1.1 million registered job seekers with 42 employment exchanges. However, the exchanges could secure placements for only about 75,000 job seekers each year. The problem did not end there. Surveys found only 25 per cent of those who got employment were offered quality jobs while the rest had to be content with unskilled, low-paying jobs.

The state then thought of devising a system for efficient collection of the private sector’s job vacancy data and offer placement on those vacancies to the job seekers on the live register of the exchanges in a decentralised manner. That’s how the Rojgar Sahay Kendras were born as an additional facilitator between the employers and the job seekers, leading to decentralisation of placement services.

Going by the encouraging results of such initiatives, more states would do well to take the cue from Gujarat.

This article was published in the Business Standard on Friday, June 25, 2010. Please read the original article here.
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