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Unemployment levels in Kerala decline as services sector picks up

Unemployment levels in Kerala decline as services sector picks up
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First Published: Thu, Oct 04 2007. 01 05 AM IST

Manual labourers waiting for contractors to take them to work sites
Manual labourers waiting for contractors to take them to work sites
Updated: Thu, Oct 04 2007. 01 05 AM IST
Kochi: Jibin J. has just completed his postgraduate studies in chemistry at Kochi. He also has a job, having landed one with a Bangalore-based biotech firm that has expanded its operations to Kochi. Jibin did not want the company to be named because he isn’t sure he can talk to the media about his job. A few years ago, Jibin says, it was unimaginable that someone just out of college in Kerala would find a job—in Kerala.
Manual labourers waiting for contractors to take them to work sites
Jibin’s experience is not a flash in the pan in a state where the unemployment level has traditionally been high, largely because of a stronglabour movement (Kerala has been ruled either by theCongress or the Communist parties for the past 50 years; the current government is Communist). A study by two economists claims that asignificant number of jobs are being created in the state by the private sector and by local entrepreneurs.
According to K.C. Zacharia and S. Irudaya Rajan, both economists at the Centre for Development Studies (CDS) at Thiruvananthapuram, unemployment in Kerala has declined from 19.1% in 2002-03 to 9.4% in 2006-07.
In absolute terms, they add, the state has generated 560,000 new jobs in four years. During this period, Kerala was ruled by Congress-led (2001-06) and CPM-led governments (since mid-2006).
Comparable figures at the national level were not available. However, unemployment across the country rose to 3.06% in 2005-06 from 2.7% in 1999-2000, according to the economic survey.
A boom in services
Many of the jobs created by the private sector have been in services, says K.K. George, an economist who advises the Kerala Planning Board. Thiruvananthapuram and, to a lesser extent, Kochi have emerged popular destinations for IT companies wishing to set up development centres. And, George adds, direct sales agencies of banks and financial services firms have hired a large number of people. “These may not be high income jobs, but (they) have helped in raising income of the people,” he says.
The state has also witnessed a construction boom, and a growth in the number of small and medium enterprises.
Salaries have gone up too, says T.R. Rajagopal, director of Kochi-based human resource consulting firm ConserveSolutions. “On average, a graduate picked up immediately after his college education can now earn a monthly salary of Rs6,000-9,000, which was unthinkable a few years ago. With living standards going up, a minimum salary of Rs5,000 is needed for a decent quality of life. Given the atmosphere here, people from metros such as Kolkata, Bangalore and Mumbai are keen to work in Kerala. Chartered accountants who used to get a maximum of Rs8,000 four or five years ago, now are hired at Rs35,000- 45,000 in Kerala,” he adds.
In 2007, some one million jobs will be created in the organized sector, according to a study by staffing services firm MaFoi Management Consultants Ltd. Some of this will be in Kerala, according to E. Balaji, chief operating officer of the firm. “As far as Kerala is concerned, growth is seen mostly in the services sector, especially in personal finance, real estate, infrastructure, telecom, insurance and health care.”
Migration: in and out
Kerala is the first state in India to register 100% literacy. A highly educated workforce that couldn’t find jobs within the state began looking without for opportunities, especially towards West Asia. However, between 2002-03 and 2006-07, the proportion of households in the state with a non-resident Keralite member stayed the same, at around 25.8%, according to the study. And international migration registered only a marginal increase in the period, from 1.84 million to 1.94 million. The authors also claim that the number of people from Kerala migrating to other states has declined.
Zacharia says that unlike in the past, when the remittances the state used to receive would largely go into housing, much of the money now goes into investments or employment-generating ventures. In 2006-07, Kerala received Rs24,500 crore as remittances. This accounted for 20% of the state’s economy. The figure has been declining gradually, but consistently, from 25% in the early 2000s to 22% in 2002-03 to 20% in 2006-07.
Daily wage factor
Daily wages in Kerala have typically been higher than those in other states. Earlier, labourers from Tamil Nadu used to migrate to Kerala attracted by these wages. Some of them still do. “Most of the telephone companies engage us in digging work for laying cables. We have come from Tirunelveli, Tamil Nadu, with family and relatives, and have been working round the year. We get Rs200 per day, more than double of what we would have got in Tamil Nadu,” says Murugan, a manual labourer.
However, many of these workers now prefer to stay back in Tamil Nadu, according to Elamaram Kareem, industry minister of Kerala. Industrial activity in Tamil Nadu is on the rise, he says, and even some of the workers who had migrated to Kerala are now returning to the state. However, this has been offset by an influx of workers from Orissa, Bengal, and Bihar.
The situation is similar with workers from Karnataka, according to K. Moidu, president of the Wayanad Coffee Growers Association. With employment prospects in that state looking better, he adds, workers, who usually migrated to Wayanad every year during the coffee harvest season, are beginning to stay away.
The flow of daily wage industrial and agricultural labourers has no impact on the employment rates in Kerala because most of the state’s residents prefer white-collar jobs. Such jobs are usually a function of private investment, and industry minister Kareem claims the state attracted around Rs10,000 crore of this in 2006-07. That may not be much compared with states such as Karnataka and Tamil Nadu, he adds, but it is a start.
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First Published: Thu, Oct 04 2007. 01 05 AM IST