People as Resource

The chapter 'People as Resource' is an effort to explain population as an asset for the economy rather than a liability. Population becomes human capital when there is investment made in the form of education, training and medical care. In fact, human capital is the stock of skill and productive knowledge embodied in them. 'People as Resource' is a way of referring to a country's working people in terms of their existing productive skills and abilities. Looking at the population from this productive aspect emphasises its ability to contribute to the creation of the Gross National Product. Like other resources population also is a resource — a 'human resource'. This is the positive side of a large population that is often overlooked when we look only at the negative side, considering only the problems of providing the population with food, education and access to health facilities. When the existing 'human resource' is further developed by becoming more educated and healthy, we call it 'human capital formation' that adds to the productive power of the country just like 'physical capital formation'. Investment in human capital (through education, training, medical care) yields a return just like investment in physical capital. This can be seen directly in the form of higher incomes earned because of higher productivity of the more educated or the better trained persons, as well as the higher productivity of healthier people. India's Green Revolution is a dramatic example of how the input of greater knowledge in the form of improved production technologies can rapidly increase the productivity of scarce land resources. India's IT revolution is a striking instance of how the importance of human capital has come to acquire a higher position than that of material, plant and machinery. Not only do the more educated and the healthier people gain through higher incomes, society also gains in other indirect ways because the advantages of a more educated or a healthier population spreads to those also who themselves were not directly educated or given health care. In fact, human capital is in one way superior to other resources like land and physical capital: human resource can make use of land and capital. Land and capital cannot become useful on its own! For many decades in India, a large population has been considered a liability rather than an asset. But a large population need not be a burden for the economy. It can be turned into a productive asset by investment in human capital (for example, by spending resources on education and health for all, training of industrial and agricultural workers in the use of modern technology, useful scientific researches and so on). The two following cases illustrate how people can try to become a more productive resource:

Like Vilas and Sakal, people have been engaged in various activities. We saw that Vilas sold fish and Sakal got a job in the firm. The various activities have been classified into three main sectors i.e., primary, secondary and tertiary. Primary sector includes agriculture, forestry, animal husbandry, fishing, poultry farming, mining and quarrying. Manufacturing is included in the secondary sector. Trade, transport, communication, banking, education, health, tourism, services, insurance, etc. are included in the tertiary sector. The activities in this sector result in the production of goods and services. These activities add value to the national income. These activities are called economic activities. Economic activities have two parts — market activities and non-market activities. Market activities involve remuneration to anyone who performs i.e., activity performed for pay or profit. These include production of goods or services, including government service. Non-market activities are the production for self-consumption.

These can be consumption and processing of primary product and own account production of fixed assets. Due to historical and cultural reasons there is a division of labour between men and women in the family. Women generally look after domestic chores and men work in the fields. Sakal's mother Sheela cooks food, cleans utensils, washes clothes, cleans the house and looks after her children. Sakal's father Buta cultivates the field, sells the produce in the market and earns money for the family. Sheela is not paid for the services delivered for upbringing of the family. Buta earns money, which he spends on rearing his family. Women are not paid for their service delivered in the family. The household work done by women is not recognised in the National Income. Geeta, mother of Vilas, earned an income by selling fish. Thus women are paid for their work when they enter the labour market. Their earning like that of their male counterpart is determined on the basis of education and skill.

Education helps individual to make better use of the economic opportunities available before him. Education and skill are the major determinants of the earning of any individual in the market. A majority of women have meagre education and low skill formation. Women are paid low compared to men. Most women work where job security is not there. Various activities relating to legal protection is meagre. Employment in this sector is characterised by irregular and low income. In this sector there is an absence of basic facilities like maternity leave, childcare and other social security systems. However, women with high education and skill formation are paid at par with the men. Among the organised sector, teaching and medicine attract them the most. Some women have entered administrative and other services including job, that need high levels of scientific and technological competence. Ask your sister or your classmate what she would like to take up as a career?

The quality of population depends upon the literacy rate, health of a person indicated by life expectancy and skill formation acquired by the people of the country. The quality of the poulation ultimately decides the growth rate of the country. Literate and healthy population are an asset.

Sakal's mother Sheela looked after the domestic chores, children and helped her husband Buta in the field. Sakal's brother, Jeetu, and sister, Seetu, spend their time playing and roaming. Can you call Sheela or Jeetu or Seetu unemployed? If not, why? Unemployment is said to exist when people who are willing to work at the going wages cannot find jobs. Sheela is not interested in working outside her domestic domain. Jeetu and Seetu are too small to be counted in the work force population. Neither Jeetu, Seetu or Sheela can be counted as unemployed. The workforce population includes people from 15 years to 59 years. Sakal's brother and sister do not fall within this age group so they cannot be called unemployed. Sakal's mother Sheela works for the family. She is not willing to work outside her domestic domain for payment. She too cannot be called unemployed. Sakal's grandparents (although not mentioned in the story) cannot be called unemployed.

In case of India we have unemployment in rural and urban areas. However, the nature of unemployment differs in rural and urban areas. In case of rural areas, there is seasonal and disguised unemployment. Urban areas have mostly educated unemployment.

Seasonal unemployment happens when people are not able to find jobs during some months of the year. People dependant upon agriculture usually face such kind of problem. There are certain busy seasons when sowing, harvesting, weeding and threshing is done. Certain months do not provide much work to the people dependant on agriculture.

In case of disguised unemployment people appear to be employed. They have agricultural plot where they find work. This usually happens among family members engaged in agricultural activity. The work requires the service of five people but engages eight people. Three people are extra. These three people also work in the same plot as the others. The contribution made by the three extra people does not add to the contribution made by the five people. If three people are removed the productivity of the field will not decline. The field requires the service of five people and the three extra people are disguised unemployed.

In case of urban areas educated unemployment has become a common phenomenon. Many youth with matriculation, graduation and post graduation degrees are not able to find job. A study showed that unemployment of graduate and post-graduate has increased faster than among matriculates. A paradoxical manpower situation is witnessed as surplus of manpower in certain categories coexist with shortage of manpower in others. There is unemployment among technically qualified person on one hand, while there is a dearth of technical skills required for economic growth.

Unemployment leads to wastage of manpower resource. People who are an asset for the economy turn into a liability. There is a feeling of hopelessness and despair among the youth. People do not have enough money to support their family. Inability of educated people who are willing to work to find gainful employment implies a great social waste. Unemployment tends to increase economic overload. The dependence of the unemployed on the working population increases. The quality of life of an individual as well as of society is adversely affected. When a family has to live on a bare subsistence level there is a general decline in its health status and rising withdrawal from the school system. Hence, unemployment has detrimental impact on the overall growth of an economy. Increase in unemployment is an indicator of a depressed economy. It also wastes the resource, which could have been gainfully employed. If people cannot be used as a resource they naturally appear as a liability to the economy.

In case of India, statistically, the unemployment rate is low. A large number of people represented with low income and productivity are counted as employed. They appear to work throughout the year but in terms of their potential and income, it is not adequate for them. The work that they are pursuing seems forced upon them. They may therefore want other work of their choice. Poor people cannot afford to sit idle. They tend to engage in any activity irrespective of its earning potential. Their earning keeps them on a bare subsistence level. Moreover, the employment structure is characterised by self-employment in the primary sector. The whole family contributes in the field even though not everybody is really needed. So there is disguised unemployment in the agriculture sector. But the entire family shares what has been produced. This concept of sharing of work in the field and the produce raised reduces the hardship of unemployment in the rural sector. But this does not reduce the poverty of the family, gradually surplus labour from every household tends to migrate from the village in search of jobs.

Let us discuss about the employment scenario in the three sectors mentioned earlier. Agriculture, is the most labour absorbing sector of the economy. In recent years, there has been a decline in the dependence of population on agriculture partly because of disguised unemployment discussed earlier. Some of the surplus labour in agriculture has moved to either the secondary or the tertiary sector. In the secondary sector, small scale manufacturing is the most labour absorbing. In case of the tertiary sector, various new services are now appearing like biotechnology, information technology and so on.

Let us read a story to know how people could become an asset for the economy of a village.

Story of a Village There was a village inhabited by several families. Each family produced enough to feed its members. Each family met its needs by the members making their own clothes and teaching their own children. One of the families decided to send one of its sons to an agriculture college. The boy got his admission in the nearby college of agriculture. After some time he became qualified in agro engineering and came back to the village. He proved to be so creative that he could design an improved type of plough, which increased the yield of wheat. Thus a new job of agro engineer was created and filled in the village. The family in the village sold the surplus in a nearby neighbouring village. They earned good profit, which they shared among themselves. Inspired by this success all the families after some time held a meeting in the village. They all wanted to have a better future for their children too. They requested the panchayat to open a school in the village. They assured the panchayat that they would all send their children to school. The panchayat, with the help of government, opened a school. A teacher was recruited from a nearby town. All the children of this village started going to school. After sometime one of the families gave training to his daughter in tailoring. She started stitching clothes for all the families of the village for everyone now wanted to buy and wear well-tailored clothes. Thus another new job, that of a tailor was created. This had another positive effect. The time of the farmers in going far for buying clothes was saved. As the farmers spent more time in the field, the yield of the farms went up. This was the beginning of prosperity. The farmers had more than what they could consume. Now they could sell what they produced to others who came to their village markets. Over time, this village, which formally had no job opportunities in the beginning, had many like teacher, tailor, agro engineer and many more. This was the story of a simple village where the rising level of human capital enabled it to evolve into a place rich with complex and modern economic activities.

You have seen how inputs like education and health helped in making people an asset for the economy. The chapter also discusses about the economic activities undertaken in the three sectors of the economy. We also study about the problem associated with unemployment. Finally the chapter ends with the story of a village which formally had no job but later had plenty.